Japan looks to enhance scrutiny of defence FDI

摘要

Japan is considering a move to further tighten regulations on foreign direct investment (FDI) in strategic-technology areas including defence. The potential move, which could be introduced within the next few months, is aimed at strengthening the protection of indigenous technologies. According to a government proposal, the new regulations would address loopholes in current FDI rules through which foreign investors can place technology-transfer demands on Japanese firms. Local news reports suggest that the proposal would enable the government to scrutinise any potential technology-transfer activity even after foreign firms have completed their investments. Countermeasures for non-compliance could include forcing foreign investors to sell off shares in Japanese companies.