Foreign Exchange and Foreign Trade Act

Notwithstanding the provisions of paragraph (1) of the preceding Article, if a foreign investor (meaning a foreign investor as provided in Article 26, paragraph (1); excluding a foreign investor that has violated this Act, an Order based on this Act, or an administrative disposition based on either of these, or any other foreign investor prescribed by Cabinet Order as one for which there is a high need to carry out an examination under paragraph (3) of the preceding Article; hereinafter the same applies in this Article) seeks to conduct an inward direct investment or equivalent action (meaning an inward direct investment or equivalent action as provided in Article 26, paragraph (2); limited to an action as stated in items (i) through (iv) of that paragraph or and an action as stated in item (ix)(xi) of that paragraph (limited to those an action prescribed by Cabinet Order as equivalent to the actions stated in items (i) through (iv) of that paragraph); hereinafter the same applies in this Article and Article 29, paragraph (5)(7)) other than one prescribed by Cabinet Order as being highly likely to constitute an inward direct investment or an equivalent action that is a matter of national security or a similar concern, the foreign investor is not required to file the notification under paragraph (1) of the preceding Article. In such a case, the foreign investor must comply with the criteria that must be met in order for an inward direct investment or equivalent action not to constitute an inward direct investment or an equivalent action that is a matter of national security or a similar concern, which the Minister of Finance and the competent minister for the business establish.

Beyond what is provided for in the preceding two paragraphs, Cabinet Order prescribes the procedures for issuing recommendations under paragraph (3)and orders under these provisions, and provides for other necessary particulars in connection with these recommendations and orders.

Assets and rights that a partner of a specified partnership or similar organization acquires through an action that is comparable to the inward direct investments andinvestment or equivalent actionsaction that the specified partnership or similar organization undertakes are deemed to be acquired, owned, or held by the specified partnership or similar organization, and the provisions of the preceding paragraphs and Article 29, paragraph (5)(7) apply.

A person (including a corporation or any other organization) not constituting a foreign investor is deemed to be a foreign investor in connection with any action of the following actions, among the actions comparable to an inward direct investment or equivalent action which that person conducts on behalf of a foreign investornon-resident, etc. but not in the name of that foreign investornon-resident, etc., and the provisions of paragraphs (1) through (5) and Article 29, paragraph (5)(7) apply.:

an action conducted for the account of that non-resident, etc.;

an action conducted based on a contract or on the laws and regulations of a foreign country or anything similar (limited to an action prescribed by Cabinet Order, and excluding an action stated in the preceding item);

an action conducted by a person that has, with that non-resident, etc., a permanent economic relationship based on ownership of shares, a familial relationship, an employment relationship, or any other special relationship prescribed by Cabinet Order (limited to an action prescribed by Cabinet Order, and excluding an action stated in the preceding two items).

A foreign investor that has filed a notification under Article 27, paragraph (1) may, when seeking, during the prohibition period (or, where the prohibition period has been extended pursuant to paragraph (3) of that Article or shortened pursuant to the proviso to paragraph (2) or paragraph (4) of that Article, the prohibition period as extended or shortened), to make a modification relating to the matters stated in Article 27, paragraph (1), item (iv) in the notification, file the modification with the Minister of Finance and the competent minister for the business pursuant to the provisions of Cabinet Order.

If a notification under the preceding paragraph has been filed and the day on which the prohibition period (or, where the prohibition period has been extended pursuant to Article 27, paragraph (3) or shortened pursuant to the proviso to paragraph (2) or paragraph (4) of that Article, the prohibition period as extended or shortened) expires is before the final day in the 14-day period that starts on the date on which the notification under the preceding paragraph is received, then notwithstanding the provisions of paragraphs (2) through (4) of that Article, the prohibition period is the period until the final day in that 14-day period.

A foreign investor that has filed a notification under Article 27, paragraph (1) must, when seeking, after the expiration of the prohibition period provided for in Article 29, paragraph (8), to make a change relating to the matters stated in Article 27, paragraph (1), item (iv) in the notification (where a notification of modification or change has been filed in accordance with a recommendation under Article 27, paragraph (5) (including as applied mutatis mutandis in the following paragraph), or based on an order under paragraph (10) of that Article (including as applied mutatis mutandis in the following paragraph), or pursuant to the provisions of paragraph (1) of the preceding Article (including as applied mutatis mutandis in the following paragraph), or pursuant to the provisions of this paragraph, the matters as modified or changed), file the change in advance with the Minister of Finance and the competent minister for the business pursuant to the provisions of Cabinet Order.

The provisions of Article 27, paragraphs (2) through (14) and the preceding Article apply mutatis mutandis to a notification of change under the preceding paragraph. In this case, the phrase "undertake the inward direct investment or equivalent action" in Article 27, paragraph (2) is deemed to be replaced with "undertake the change relating to the matters stated in item (iv) of the preceding paragraph"; the phrase "falls under one of the following" in Article 27, paragraph (3) is deemed to be replaced with "falls under, through the change relating to the matters stated in paragraph (1), item (iv) in the notification under Article 27-4, paragraph (1), one of the following"; the phrase "the inward direct investment or equivalent action to change the substance of the investment or action," in Article 27, paragraph (5) is deemed to be replaced with "the inward direct investment or equivalent action,"; the phrase "notification of modification concerning the matters stated in item (iv) of that paragraph in the notification in question" in Article 27, paragraph (5) is deemed to be replaced with "notification of modification of the change relating to the matters stated in paragraph (1), item (iv) in the notification under Article 27-4, paragraph (1)"; the phrase "to discontinue the investment or action" in Article 27, paragraph (5) is deemed to be replaced with "to discontinue the change relating to the matters stated in that item in the notification under paragraph (1) of that Article"; the phrase "recommend the change," in the proviso to Article 27, paragraph (5) is deemed to be replaced with "recommend"; the phrase "undertake the inward direct investment or equivalent action, or make" in Article 27, paragraph (8) is deemed to be replaced with "make", and the phrase "that is subject to the recommendation in accordance with the recommendation" in Article 27, paragraph (8) is deemed to be replaced with "that is subject to the recommendation, or discontinue the change relating to the matters stated in paragraph (1), item (iv), in accordance with the recommendation"; the phrase "the inward direct investment or equivalent action" in Article 27, paragraph (9) is deemed to be replaced with "the change relating to the matters stated in paragraph (1), item (iv)"; the phrase "order the person to change the substance of the inward direct investment or equivalent action," in Article 27, paragraph (10) is deemed to be replaced with "order the person", and the phrase "to discontinue the inward direct investment or equivalent action" in Article 27, paragraph (10) is deemed to be replaced with "to discontinue the change relating to the matters stated in paragraph (1), item (iv) in the notification under Article 27-4, paragraph (1)"; the phrase "may issue an order to change," in the proviso to Article 27, paragraph (10) is deemed to be replaced with "may issue an order"; the phrase "to change the substance of the inward direct investment or equivalent action or to make a modification of a measure relating to national security or a similar concern" in Article 27, paragraph (11) is deemed to be replaced with "to make a modification of a measure relating to national security or a similar concern"; the phrase "under these provisions, a change to the content of an inward direct investment or equivalent action," in Article 27, paragraph (12) is deemed to be replaced with "under these provisions,", and the phrase "the discontinuance of an inward direct investment or equivalent action" in Article 27, paragraph (12) is deemed to be replaced with "the discontinuance of the change relating to the matters stated in paragraph (1), item (iv) in the notification under Article 27-4, paragraph (1)"; and the phrase "relating to the matters stated in Article 27, paragraph (1), item (iv) in the notification" in paragraph (1) of the preceding Article is deemed to be replaced with "of the change relating to the matters stated in Article 27, paragraph (1), item (iv) in the notification of change under paragraph (1) of the following Article", and the phrase "file the modification" in paragraph (1) of the preceding Article is deemed to be replaced with "file the modification of that change"; in addition, Cabinet Order prescribes any other necessary technical replacement of terms.