Ministry of Economy, Trade and Industry
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Revision of Guideline to Prevent Bribery of Foreign Public Officials

The Ministry of Economy, Trade and Industry (METI) revised the Guideline to Prevent Bribery of Foreign Public Officials, which are the guideline regarding bribery of foreign public officials in international business transactions under the Unfair Competition Prevention Act, in order to support Japanese companies’ overseas business expansion. This revision clarifies legal interpretations regarding “to obtain or retain business or other improper advantage in the conduct of international business”. And it describes good practices on how Japanese companies as enterprise groups including their subsidiaries should strengthen their internal control systems for preparing, recording, and auditing internal company regulations against risky actions to prevent and combat foreign bribery.

1. Background

  • Cases in which Japanese companies face foreign public officials’ demands for bribes have been increasing, along with the expansion of Japanese companies’ overseas markets including the infrastructure sector (amounting to as much as over 150 trillion yen in 20121).
  • On the other hand, the exposure has rapidly increased worldwide, resulting in the exposure of bribery that has resulted in fines as high as 100 billion yen.
  • Under such circumstances, it has been pointed out that demands for the bribery from foreign public officials have a negative influence on even the fair overseas operating activities of Japanese companies, while quite a few overseas subsidiaries of Japanese companies haven’t taken effective measures against foreign bribery. In order to improve the situation and incorporate overseas market dynamism, Japanese companies need to appropriately decrease the risk of foreign bribery as enterprise groups and develop an environment that enables Japanese companies to conduct fair overseas operating activities. (As written in the Japan Revitalization Strategy revised in 2015, which was approved by the Cabinet on June 30, 20153)

2. Discussions at the Study Group on Prevention of Bribery of Foreign Public Officials

METI established the Study Group on Prevention of Bribery of Foreign Public Officials (chairperson: Prof. Atsushi Yamaguchi of Waseda Law School at Waseda University) and has held meetings since June 2015. (The Ministry of Justice, National Police Agency, Ministry of Foreign Affairs, Japan International Cooperation Agency (JICA), and other relevant organizations participated in the study group as observers.)

3. Highlights of the revision

(1) Clarification of legal interpretation

  • The interpretation of elements including the “purpose of obtaining or retaining improper business advantages” is clarified in order to avoid excessively shrinking operating activities and to prevent foreign bribery which uses social occasions as a shield to hide behind.
  • Demand for bribes from foreign public officials must be rejected as a rule even if Japanese companies face cases in which they would be forced or extorted to pay bribes in order to avoid being treated unreasonably and discriminately by the foreign public officials when for example, passing through customs.
  • If Japanese companies offer congratulatory small gifts, business entertainment, and travel expenses just for the sake of building relationships and a better understanding of their products, such behavior may not amount to bribery.

(2) Strengthened systems of Japanese companies (Good practices)

  • Japanese companies, which conduct overseas business operations under the Companies Act, Unfair Competition Prevention Act, and overseas laws and regulations, should organize and operate an internal control system, ethics and compliance (hereinafter collectively called “internal control system”) for the prevention of bribery of foreign public officials.
  • As for establishment and operation of the internal control systems, it is recommended that Japanese companies should organize and operate a focused internal control system taking a “risk-based approach,” or/and considering the risks associated with the target countries, business fields, and types of activities, while the corporate directors have considerable discretion regarding their own internal control systems.
  • In particular, the revision emphasizes the importance of subsidiaries and sub-subsidiaries, many of which have not completely managed their risks, and the necessity of support from parent companies.
  • It is recommended that Japanese companies prepare an internal review system to organize, record, and audit appropriate approval processes for risky operations such as hiring local agents, acquiring local companies, and conducting business entertainment.

(3) Other

  • It is articulated that in case Japanese companies are forced or extorted to pay bribes by foreign public officials, it is possible for the companies to consult “business support contact points” in Japanese embassies and consulates-general and to discuss it with the local government through the Japanese Embassy and other relevant organizations.

For details, see the Japanese language press release.

Release date

July 30, 2015

Division in Charge

Intellectual Property Policy Office, Economic and Industrial Policy Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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