Foreign Exchange and Foreign Trade Act

The purpose of this Act is to ensure that international transactions develop normally and that peace and security are maintained in Japan and the international community through the implementation of the minimum necessary controls and coordination for international transactions, under the basic principle of free engagement in foreign exchange, foreign trade, and other such international transactions; and in doing so, to help achieve balance of payments equilibrium and currency stability and also to contribute to the sound development of the Japanese economy.

This Act also applies to actions that the representative, agent, employee, or other such worker of a corporation whose principal office is in Japan takes in a foreign country concerning the corporation's assets or business. The same applies to actions that a person whose domicile is in Japan or the agent, employee, or other such worker of such a person takes in a foreign country concerning that person's assets or business.

In this Act and Orders based on this Act, the meanings of the terms stated in the following items are as prescribed in those items:

the term "Japan" means Honshu, Hokkaido, Shikoku, and Kyushu, and the islands associated with them that are prescribed by Ministry of Finance Order and Order of the Ministry of Economy, Trade and Industry;

the term "foreign country" means any area outside Japan;

the term "Japanese currency" means currency expressed in units of Japanese yen;

the term "foreign currency" means any currency other than Japanese currency;

the term "resident" means a natural person with a domicile or residence in Japan or a corporation whose principal office is in Japan. Regardless of whether a non-resident's branch office, local office, or other such office in Japan has the legal authority to represent that non-resident, that office is deemed to be a resident, even if the non-resident's principal office is located in a foreign country;

the term "non-resident" means a natural person or corporation other than a resident;

the term "means of payment" means any of the following:

banknotes, government notes, and coins;

checks (including traveler's checks), bills of exchange, postal money orders, and letters of credit;

the property value entered in a voucher, electronic device, or any other object (referred to as a "voucher or other such object" in Article 19, paragraph (1)) using electronic or magnetic means (meaning electronic means, magnetic means, or any other means that cannot be perceived with the human senses), which unspecified or a large number of persons can use among themselves for payment (limited to one prescribed by Cabinet Order as having a status of use that approximates a currency); and

what is prescribed by Cabinet Order as being equivalent to what is stated in (a) or (b);

the term "foreign means of payment" means a foreign currency or any other means of payment (excluding Japanese currency) that is denominated in a foreign currency or that can be used for payment in a foreign country, regardless of the currency unit;

the term "electronic payment instruments" means any of the following:

electronic payment instrument (meaning an electronic payment instrument as prescribed in Article 2, paragraph (5) of the Payment Services Act (Act No. 59 of 2009); the same applies in the right-hand column of row 1 of the table in Article 16-2, Article 17-4, paragraph (2) and Article 18-6, paragraph (2)); and

the term "precious metal" means gold bullion, gold alloy bullion, gold coins that are not in circulation, or any other object whose principal material is gold;

the term "security" means a public bond, corporate bond, share, equity interest, certificate granting rights related to a public bond or share, bond certificate, treasury bond, mortgage security, profit certificate, coupon, dividend certificate, renewal coupon, or any security or certificate prescribed by Cabinet Order as being similar to them, regardless of whether it has been materialized;

the term "foreign currency security" means a security for which a person can receive payment in a foreign country or a security that is denominated in a foreign currency;

the term "claim" means a time deposit, current deposit, special current deposit, deposit at notice, insurance policy, or current account balance, or a monetary claim not stated in any of the preceding items which arises from a loan, bid, or other source;

the term "goods" means movables other than precious metals, means of payment, and securities and any other certificates embodying claims; and

the term "assets" means assets including what is prescribed in items (vii), (ix) through (xi), and (xiii), and the preceding item.

If it is not clear whether a person is a resident or a non-resident, the Minister of Finance decides this.

The Minister of Finance is to set and issue public notice of the reference foreign exchange rates for Japanese currency and arbitrated foreign exchange rates of foreign currencies to Japanese currency.

Before setting a reference foreign exchange rate for Japanese currency pursuant to the provisions of the preceding paragraph, the Minister of Finance must obtain the approval of the Cabinet.

The Minister of Finance is to work towards stability in the foreign exchange rates of Japanese currency by taking necessary measures such as buying and selling foreign means of payment.

A payment in currency that is made or received in connection with a transaction or action to which this Act applies must be made or received in the currency designated by the Minister of Finance.

If there has been a rapid change in international economic conditions and the competent minister finds that there is an urgent need to do so, the competent minister, pursuant to the provisions of Cabinet Order, may order the suspension of transactions, actions, or the making or receiving of payments to which this Act applies, for a period prescribed by Cabinet Order.

A suspension that the competent minister orders pursuant to the provisions of the preceding paragraph is not to make it impossible to make a payment that had been authorized pursuant to this Act up until the time of the suspension, and any delay in making a payment due to such a suspension is to be limited to within the period prescribed by Cabinet Order.