Japanese White-Collar Crime Law

Corporate Governance and Director’s Duties

The Companies Act (CA) regulates the duties of corporate directors in Japan. Under Article 960, if a director or other corporate executive commits an act in breach of their duties and causes financial damage to the company for personal gain or at the expense of a third party, they may face:

Imprisonment of up to ten years
A fine of up to JPY10 million

The Penal Code prohibits:

Accepting bribes in connection with public officer duties
Soliciting or promising to accept bribes
Giving, offering, or promising to give bribes

Penalties for bribery-related offenses include:

Imprisonment with labor of up to three years
A fine of up to JPY2.5 million

Anti-Bribery Regulation

There is no statute that imposes criminal or administrative sanctions on failing to prevent bribery of employees or establish a compliance program.

Insider Dealing, Market Abuse, and Criminal Banking Law

Insider Trading

The Financial Instruments and Exchange Act (FIEA) prohibits corporate insiders from trading on non-public material facts related to their company’s business or other matters. Insider trading is punishable by:

Imprisonment of up to five years
A fine of up to JPY5 million

Tipping

Corporate insiders are prohibited from tipping non-public material facts to others, which carries the same penalty as insider trading.

Market Manipulation

The FIEA prohibits market manipulation, including:

Conducting series trades to mislead investors
Influencing market prices
Conspiring with others
Disseminating false information

Penalties for market manipulation include:

Imprisonment of up to five years
A fine of up to JPY5 million

Banking Crime

Fraudulent conduct by financial institutions against regulators or customers is punishable under the Banking Act or relevant regulations.

Tax Fraud

Tax evasion is punishable under laws prescribed for each type of tax, as well as back taxes and additional penalty tax.