Foreign Exchange and Foreign Trade Act

Except in a case prescribed by Cabinet Order, when a resident or non-resident has made a payment from Japan to a foreign country, or has received a payment that was made from a foreign country to Japan, that resident or non-resident must report the substance of the payment being made and received, its timing, and any other information that Cabinet Order prescribes to the competent minister, pursuant to the provisions of Cabinet Order; and when a resident has made a payment to or received a payment from a non-resident in Japan or a foreign country, the resident must report the substance of the payment being made and received, its timing, and any other information that Cabinet Order prescribes to the competent minister, pursuant to the provisions of Cabinet Order.

If a payment as referred to in the preceding paragraph that is the subject of a report under that paragraph is made or received through a funds transfer transaction conducted by a bank or other prescribed financial institution or a funds transfer service provider, the report is to be made, pursuant to Cabinet Order, through the bank or other prescribed financial institution or the funds transfer service provider; provided, however, that if an electronic data processing system as prescribed in Article 6, paragraph (1) of the Act on the Promotion of Utilizing Information and Communications Technology in Administrative Procedures (Act No. 151 of 2002) is used to make a report pursuant to the provisions of that paragraph, it may be made without going through the bank or other prescribed financial institution or the funds transfer service provider.

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Except in cases prescribed by Cabinet Order, on each occasion on which a resident or non-resident becomes a party to a capital transaction as stated in one of the following items, either the resident or non-resident, as per the classification prescribed in the relevant item, must report the substance of the capital transaction, its timing, and any other information that Cabinet Order prescribes to the Minister of Finance, pursuant to Cabinet Order; provided, however, that this does not apply to a capital transaction as stated in item (vi) for which the provisions of Article 23, paragraph (1) require a notification to be filed:

a capital transaction stated in Article 20, item (i):the resident;

a capital transaction stated in Article 20, item (ii) (excluding one that falls within the category of capital transaction stated in item (vi)):the resident;

a capital transaction stated in Article 20, item (iii):the resident;

a capital transaction stated in Article 20, item (iv) that constitutes a transaction involving the accrual, alteration, or extinguishment of a claim for which a payment can be received in a foreign currency, based on a deposit contract, trust contract, money loan contract, obligation guarantee contract, or sales contract for a foreign means of payment or a claim, between a resident and another resident:the resident;

a capital transaction stated in Article 20, item (v) (excluding one that falls within the category of capital transaction stated in the following item):the resident;

any of the capital transactions stated in Article 20, items (ii), (v), and (xi) which involves outward direct investment (meaning the outward direct investment prescribed in Article 23, paragraph (2); the same applies in Article 70, paragraph (1)) by a resident: the resident;

a capital transaction stated in Article 20, item (vi) that constitutes a resident's issuance or public offering of securities in a foreign country or a resident's issuance or public offering of foreign currency securities in Japan:the resident;

a capital transaction stated in Article 20, item (vi) that constitutes a non-resident's issuance or public offering of securities in Japan:the non-resident;

a capital transaction stated in Article 20, item (vii):the non-resident;

a capital transaction stated in Article 20, item (viii):the resident;

a capital transaction stated in Article 20, item (ix):the resident;

a capital transaction stated in Article 20, item (x) that constitutes a non-resident's acquisition of real property located in Japan or any rights on it:the non-resident; or

a capital transaction stated in Article 20, item (xii) which is prescribed by Cabinet Order:the resident or non-resident prescribed by Cabinet Order.

Notwithstanding the provisions of paragraph (1), if a resident that is not a bank or other prescribed financial institution, that is not a financial instruments business operator, and that is not the filer of a notification (meaning a resident that is party to a capital transaction as stated in item (iv) or (xi) of that paragraph and that has filed a notification with the Minister of Finance indicating, pursuant to the provisions of Ministry of Finance Order, the wish to arrange things so that a report under that paragraph is not required from any person that becomes the other party to such capital transactions with the resident, and giving the resident's name, address, and other information that Ministry of Finance Order prescribes; hereinafter the same applies in this Article) becomes a party to a capital transaction stated in item (iv) or (xi) of that paragraph, and the other party to the capital transaction is a bank or other prescribed financial institution, a financial instruments business operator, or the filer of a notification, the resident is not required to make a report under that paragraph with regard to that capital transaction.

Notwithstanding the provisions of paragraph (1), beyond as prescribed in the preceding paragraph, if a resident has become a party to a capital transaction stated in paragraph (1), item (iii), (v), (x), or (xi), and the person acting as the intermediary, commission agent, or other agent for the capital transaction is a bank or other prescribed financial institution or a financial instruments business operator or an electronic payment instruments service provider, etc., the resident is not required to make a report under paragraph (1) with regard to that capital transaction.

Notwithstanding paragraph (1) or (2) as regards a bank or other prescribed financial institution, a financial instruments business operator, or an electronic payment instruments service provider, etc., and notwithstanding paragraph (1) as regards the filer of a notification, these persons may report in block, pursuant to Cabinet Order, the information that Ministry of Finance Order prescribes with regard to capital transactions to which they have been a party or for which they have acted as intermediary, commission agent, or other agent within a certain period of time. In such a case, pursuant to Cabinet Order, a person that has so reported must prepare and preserve books and documents in which the person has included the information that Ministry of Finance Order prescribes with regard to the capital transactions that are subject to the report.

If information in a notification as prescribed in paragraph (3) changes, the filer of the notification must file a notification with the Minister of Finance indicating this and detailing the information subject to the change without delay.

Ministry of Finance Order provides for the issuance of public notices in connection with notifications as referred to in paragraph (3), the inspection of the filers list, and other necessary particulars concerning the notifications referred to in that paragraph.

Except in cases prescribed by Cabinet Order, if a resident has become a party to one of the following specified capital transactions, the resident must report the substance of the specified capital transaction, its timing, and any other information that Cabinet Order prescribes to the Minister of Economy, Trade and Industry, pursuant to the provisions of Cabinet Order:

a specified capital transaction connected with a capital transaction stated in Article 20, item (ii); or

a specified capital transaction connected with a capital transaction stated in Article 20, item (xii), which is prescribed by Cabinet Order.

When a foreign investor has conducted an inward direct investment or equivalent action or a specified acquisition (limited to specified acquisition for which the provisions of Article 28, paragraph (1) require a notification to be filed; hereinafter the same applies in this Article), the foreign investor must report the substance of the inward direct investment or equivalent action or the specified acquisition, its timing, and any other information prescribed by Cabinet Order to the Minister of Finance and the competent minister for the business, pursuant to the provisions of Cabinet Order; provided, however, that this does not apply to an inward direct investment or equivalent action or a specified acquisition for which a notification has been made pursuant to the provisions of Article 27, paragraph (1) or Article 28, paragraph (1).

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 and equivalent actions or specified acquisitions that the specified partnership or similar organization conducts are deemed to be acquired, owned, or held by the specified partnership or similar organization, and the provisions of the preceding paragraph 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 of the following actions comparable to an inward direct investment or equivalent action or a specified acquisition which that person conducts on behalf of a non-resident, etc. but not in the name of that non-resident, etc., and the provisions of paragraph (1) apply.

that is carried out for the account of the non-resident, etc.;

that is carried out based on a contract, the laws and regulations of a foreign country, or anything similar to these (limited to those specified by Cabinet Order, and excluding those set out in the preceding item);

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

If a resident has entered into, renewed, or modified a technology introduction contract with a non-resident (inclusive of a non-resident's branch office or other such place of business in Japan), the resident must report the entry into, renewal, or modification of the technology introduction contract to the Minister of Finance and the competent minister for the business, pursuant to the provisions of Cabinet Order; provided, however, that this does not apply to the entry into, renewal, or modification of a technology introduction contract for which the provisions of Article 30, paragraph (1) require a notification to be filed.

The provisions of the preceding paragraph do not apply to the entry into, renewal, or modification of a technology introduction contract involving technology developed independently by a non-resident's branch office or other such place of business in Japan or any other case of the entry into, renewal, or modification of a technology introduction contract prescribed by Cabinet Order.

To the extent necessary for achieving the purpose of this Act, the Minister of Finance, pursuant to the provisions of Cabinet Order, may ask a person engaged in foreign exchange services (meaning engagement, in the course of trade, in foreign exchange transactions or any other transactions or actions prescribed by Cabinet Order as being closely related to Japan's balance of payments or the trends in Japan's foreign borrowing and lending) that is prescribed by Cabinet Order as a person engaged in those services on a considerable scale to report on the particulars of its foreign exchange services (excluding the particulars subject to reporting under Article 55-3).

Beyond as otherwise provided for in this Act, the competent minister, pursuant to the provisions of Cabinet Order and to the extent necessary for achieving the purpose of this Act, may ask a person that is undertaking or has undertaken a transaction, action, or the making or receipt of a payment to which this Act applies, or any related person, to report the substance of the transaction, the action, or the making or receipt of the payment as well as any other information related to the transaction, action, or making or receipt of the payment.

Pursuant to the provisions of Cabinet Order, the Minister of Finance must prepare statistics on foreign borrowing and lending and balance of payments and report them to the Cabinet periodically.

If the Minister of Finance finds it to be necessary to do so in order to prepare the statistics prescribed in the preceding paragraph, the minister may ask the relevant administrative organs and other such persons to submit materials, pursuant to the provisions of Cabinet Order.