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Specific offences and restrictions

Offences

What are the key corruption and bribery offences in your jurisdiction?

Public sector bribery offences

Bribery of Japanese public officials Under the Penal Code, it is an offence for:

  • any natural person to give, offer or promise a bribe to either a public official or third-party beneficiary in connection with the public official's duties;
  • any natural person to induce, conspire in respect of, aid and/or abet bribery; and
  • a public official to accept, solicit or promise to accept bribes, either for themselves or a third party, in connection with the public official's duties, whether directly or through a third party.

The Penal Code does not define the term ‘bribe’, although the courts have interpreted this to mean anything, whether tangible or intangible, that "fulfils a man's need, greed or desire". However, a benefit is not considered a bribe if it does not affect the public official's duties or if it is given and received according to normal social conventions, considering the value of the benefit and the intention behind it.

The Penal Code provides no defences to bribery offences and there is no de minimis value threshold under which the authorities will not prosecute for bribery.

Bribery of foreign public officials Under the Unfair Competition Prevention Act, both legal and natural persons are prohibited from giving, offering or promising any money or other benefit to a foreign public official, for the purpose of inducing them to act or not act with respect to their official duties or to use their official influence, in order to achieve an illicit business gain in the conduct of international commercial transactions.

As under the Penal Code, the Unfair Competition Prevention Act does not define the term ‘money or other benefit’, which is generally interpreted to mean ‘bribe’.

The Unfair Competition Prevention Act applies to Japanese citizens who attempt to bribe foreign public officials anywhere in the world, as well as attempted bribery of foreign officials on Japanese territory, regardless of the actor’s nationality.

National Public Servant Ethics Act and the National Public Servants Ethics Code The National Public Servants Ethics Code generally prohibits all public officials from undertaking the following activities with or in relation to interested parties:

  • receiving gifts;
  • borrowing money at significantly advantageous rates;
  • dining;
  • playing certain sports; and
  • travelling privately.

An ‘interested party’ is defined as a business entity or individual on behalf of such an entity, who:

  • is applying for a permit or (indirect) subsidy;
  • is due to undergo an audit or inspection;
  • is subject to administrative action;
  • has bid for a contract;
  • is engaged in giving administrative guidance; or
  • is a national agency that will receive a budget.

However, breaches of the National Public Servant Ethics Act and the National Public Servants Ethics Code will not result in criminal prosecution, but rather disciplinary action.

Private sector bribery offences

There is no general prohibition against bribery in the private sector. However, the Companies Act prohibits both active and passive bribery relating to directors or statutory auditors. Further, the Companies Act prohibits the provision or request of benefits in order to secure or prevent the exercise of shareholder rights in a certain manner.

In addition, the Financial Instruments and Exchange Act generally prohibits financial instruments and exchange business operators (FIEBOs), such as securities companies and banks from providing ‘property benefits’ to clients to make up for losses in securities or derivative transactions. The Cabinet Office Ordinance on Financial Instruments and Exchange Business further restricts FIEBOs and their officers and employees from providing a ‘special advantage’ to clients, while also restricting credit rating agencies from receiving, demanding or accepting offers of money or goods with a value exceeding Y3,000 from clients generally.

Hospitality restrictions

Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?

The National Public Servants Ethics Act and the National Public Servant Ethics Code provide rules on the types of gift, entertainment and travel that public officials may accept from interested parties.

Gifts

Under the Ethics Code, the general rule is that a public official may accept small, inexpensive gifts if they are distributed widely, such as at a party or as an advertisement or souvenir. The term ‘distributed widely’ is not defined; the emphasis is on the gift being something widely available, rather than bespoke. As regards foreign officials, the Ministry of Economy, Trade and Industry Guidelines on the Prevention of Bribery of Foreign Public Officials suggest that offering or giving small gifts for the express and sole purpose of building relationships or creating a better understanding of a company's products may reduce the risk or perception of bribery.

However, the Penal Code contains no de minimis thresholds for when a gift would be considered to be a bribe. Under the Ethics Code, public officials are generally prohibited from receiving a gift of money, goods or real estate from an interested party, regardless of value. A public official is also prohibited from receiving a loan from an interested party, other than a loan from a financial institution at normal interest rates.

Entertainment and hospitality

A public official may accept modest refreshments at an official meeting, conference or roadshow from an interested party. They may also accept meals and drinks at a buffet-style party attended by ‘many people’ – the Ethics Board has stated informally that this means a party with at least 20 people.

Private dining with an interested party may also be permissible if the meal is not extravagant, and the public official pays their own tab or a third, non-interested party pays for them. Entertainment at sports or cultural events is acceptable as long as they are not perceived to be a bribe, which is judged in light of the value of the hospitality, whether the event is separate from official meetings and the ratio of interested parties to attendees.

Other than private dining paid for by the interested party and extravagant entertainment, the Ethics Code also prohibits a public official from participating in certain social activities (including golf, mahjong and card games) with an interested party, regardless of who pays the official's expenses.

Travel and accommodation expenses

The Ethics Code prohibits a public official from travelling privately with an interested party, even where the public official pays for his or her own expenses. However, it is acceptable for a public official and an interested party may travel together for official purposes by means of ‘reasonable transportation’ (eg, as part of an official tour).

It is unlikely to ever be acceptable for an interested party to pay a public official's accommodation expenses.

Facilitation payments

What are the rules relating to facilitation payments?

Facilitation payments are considered bribes under Japanese law. Neither the Penal Code nor the Unfair Competition Prevention Act incorporates the exemption found in other laws, such as the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or the US Foreign Corrupt Practices Act, for ‘small facilitation payments’. As such, offering a public official even a small payment or gift is an offence if there is an intention to obtain or retain an improper business advantage.

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