Japan: International Law

Japan's Foreign Exchange and Foreign Trade Act amendments, promulgated in June 2026, introduce significant changes to foreign direct investment screening procedures. These modifications expand regulatory oversight to include indirect acquisitions, mandate reporting of risk mitigation measures, and grant authorities enhanced powers to address national security concerns even after transactions are completed.

Japan is undergoing its most significant transformation in defense policy since World War II, driven by a changing Asia-Pacific security environment, growing US pressure on allies, and the convergence of economic and national security. Under Prime Minister Sanae Takaichi, reforms are being translated into greater military capabilities and a more proactive security strategy. For businesses, this transformation presents significant opportunities across Japan's defense industrial base, though careful balancing

On Jan. 7, 2026, the Council on Customs, Tariff, Foreign Exchange and Other Transactions – an advisory body to Japan’s Ministry of Finance – published a report addressing key reforms to Japan’s...