Japan

Reviewed April 2015
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PUBLIC OFFICIALS
    Is there an offence of bribing public officials?
    • Under Articles 197, 197-2 to 197-5, and 198 of the Penal Code of Japan it is a criminal offence to give a bribe to a public official or for a public official to receive a bribe (bribery of domestic public officials). Public officials include Japanese government officials, local authority officials and other officials with public functions prescribed by law.

      In addition, it is a criminal offence to bribe a foreign public official under the Unfair Competition Prevention Act (UCPA).

    What is the relevant test for each offence?
    Can corporates and individuals commit the offence?
    • Domestic bribery

      In general terms, unless expressly stipulated by law, only individuals can be liable for criminal offences in Japan. Since the bribery section of the Penal Code does not contain provisions regarding corporate liability, corporates cannot be liable for bribing domestic public officials.

      There has been Parliamentary discussion about allowing corporates to be liable for this bribery offence; however there have been no further developments in this area.

      Foreign Bribery

      Corporates can be liable for the offence of bribing foreign public officials under UCPA.

    Does the offence have extra-territorial effect?
    • The offence, of giving or receiving a bribe from or to a domestic public official and of bribing foreign public officials, applies to any person who commits a crime in Japan, irrespective of their nationality (Article 1 of the Penal Code).

      The bribery offences have extra-territorial effect, provided certain conditions are met:

      Domestic bribery

      The offence of receiving a bribe outside of Japan by a Japanese public official is punishable under Article 4 of the Penal Code. However, the offence of giving a bribe, if committed outside Japan, is not within the scope of the extraterritorial application of the Penal Code.

      Foreign bribery

      Where the offence of giving a bribe to a foreign public official outside of Japan is committed by a Japanese national it is punishable under Article 21(6) of the UCPA.  If the offence was committed by a foreign national, even if ordinarily resident in Japan, the conduct would be excluded from the offence of foreign bribery unless it amounted to a conspiracy with Japanese offenders.

    Are there any exceptions or defences?
    • There are no statutory exceptions or defences.

    What are the penalties?
    • Domestic bribery

      The penalty for the basic offence of taking a bribe under Article 197-1 of the Penal Code is a maximum of five years’ imprisonment with forced labour. The penalty for the offence of giving a bribe under Article 198 is a maximum of 3 years’ imprisonment or a criminal fine of not more than 2.5m yen.

      Depending on aggravating factors, the maximum penalties for taking a bribe may be increased. For agreeing to act or not to act as a result of taking a bribe, the maximum penalty is seven years’ imprisonment. The most severe statutory penalty is for acting illegally or declining from acting as a result of taking a bribe (Article 197-3). The minimum penalty for this offence is five years’ imprisonment with forced labour and the maximum is twenty years’ imprisonment (Article 12).

      Foreign bribery

      The offence of bribing a foreign public official under the UCPA has a maximum penalty for individuals of up to 5m yen and/or up to five years’ imprisonment (Article 21(2)). Corporates can be fined up to 300m yen (Article 22(1)).

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    PRIVATE SECTOR
      Is there an offence for bribery within the private sector?
      • In Japan, there are no express provisions in law which make bribery an offence in the private sector.  The focus is on maintaining the prohibition of public sector bribery and the integrity of the Japanese public service.

        However, there are some offences which are used to prosecute in situations akin to private sector bribery cases. Examples include the following:

        • breach of trust (Penal Code Article 247)
        • breach of trust by a director, manager, auditor etc. (Company Act Article 960)
        • bribery received by or given to a director, manager, auditor etc. (Company Act
          Article 967), and
        • bribery in relation to the rights of shareholders (Company Act Article 970).
      What is the relevant test?
      • Breach of trust

        Under Article 247 of the Penal Code, a person is guilty of an offence if, while he is in charge of the affairs of another, he commits an act in breach of his legal duty and causes financial loss to another, for the purpose of promoting his own interest or the interests of a third party, or inflicting damage on another.

        Therefore, if a person in a private company receives a bribe, and as a result the company was induced to enter into a disadvantageous contract and suffered financial loss, it may constitute an offence of breach of trust.  

        Breach of trust by a director, manager, auditor etc

        Under Article 960 of the Company Act, a person shall be guilty of an offence if, for the purpose of promoting their own interest, the interests of a third party or inflicting damage on a limited liability company (limited by company shares), he commits an act in breach of his duties and/or causes financial damage to a limited liability company.

        A person for the purposes of this offence includes an incorporator, director, accounting advisor, company auditor, executive officer, manager or inspector.

        Bribery received by or given to a director, manager, auditor etc

        Under Article 967 of the Company Act, a person is guilty of an offence if an incorporator, director, accounting advisor, company auditor, executive officer, manager or inspector, accepts, solicits or promises to accept, or has given, offered or promised to give, financial benefits in connection with their duties, in response to an illegal request.

        Bribery in relation to the rights of shareholders

        Under Article 970 of the Company Act, a person is guilty of an offence if any directors or employees of a Stock Company give financial benefits on account of such Stock Company or its subsidiary in relation to the exercise of a right of a shareholder. Article 968 increases the maximum penalty, if the benefit is in response to a wrongful request.

      Can corporates and individuals commit the offence?
      Does the offence have extra territorial effect?
      • Any offence committed within Japanese territories falls within Japanese jurisdiction irrespective of the nationality of the person committing the offence (Article 1 of the Penal Code). This is the principle of jurisdictional scope applied unless specific provisions state otherwise. Laws only have extra-territorial effect where a special provision provides for this.

        Breach of trust (Article 247 Penal Code) has extra-territorial effect if the offence is committed by a Japanese national (Article 3 Penal Code).

        Articles 960, 967, 968 and 970 of the Company Act have extra-territorial effect irrespective of the nationality of the offender (Article 971 Company Act).

      Are there any exceptions or defences?
      • There are no statutory exceptions or defences.

      What are the penalties?
      • Breach of trust (Article 247 Penal Code): up to five years’ imprisonment with forced labour or a criminal fine of not more than 500,000 yen.

        Breach of trust by a director, manager, auditor, etc (Article 960 Company Act): up to 10 years’ imprisonment with forced labour and/or a criminal fine of not more than 10m yen.

        Bribery received by a director, manager, auditor, etc (Article 967 Company Act): up to 5 years’ imprisonment with forced labour or a criminal fine of not more than 5m yen.

        Giving a bribe to a director, manager, auditor, etc (Article 967 Company Act): up to 3 years’ imprisonment with forced labour or a criminal fine of not more than 3m yen.

        Bribery in relation to rights of shareholders (Article 970 Company Act): up to 3 years’ imprisonment with forced labour or a criminal fine of not more than 3m yen. If the benefit is in response to a wrongful request, the penalty may be increased to not more than 5 years’ imprisonment with forced labour or a criminal fine of not more than 5m yen (Article 968). However, in relation to both offences, the courts may impose both sanctions (imprisonment and fine) taking into consideration all of the circumstances (Article 970(3)).  

      This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.