Japan Legal Update

AMT is committed to delivering up-to-date insights on Japanese legal matters to our clients. Our Japan Legal Update provides comprehensive summaries of recent legislative changes, court precedents, and industry trends in Japan across various practice areas. For those seeking more in-depth information, we invite you to explore our newsletter

Summary of the Public Comments on the Institutional Design of Japan’s Emissions Trading Scheme (GX-ETS)

As of April 1, 2026, Japan’s Emissions Trading Scheme (GX-ETS), a mandatory scheme similar to the European Union Emissions Trading System (EU ETS), has been fully implemented. On March 30, 2026, the results of the public comments on the draft amendment to the Ordinance for Enforcement of the Act on Promotion of Smooth Transition to a Decarbonized Growth-Oriented Economic Structure, which sets out the detailed design of the GX-ETS, were published. The public comments and the results of the comments submission process are important for understanding the direction of the system’s practical implementation.

The FEFTA Amendment Bill Regarding Inward Direct Investment

On March 17, 2026, the bill for Japan’s proposed overhaul of the Foreign Exchange and Foreign Trade Act (FEFTA) was submitted to the Diet (the "Bill").

AI and Machine Learning Supply Chain Risks: Japan Signs on to International Guidance

Japan’s National Cybersecurity Office (NCO, formerly NISC) has joined the United States, the United Kingdom, Australia, Canada, and other partner agencies in endorsing international guidance on supply chain risks in artificial intelligence (AI) and machine learning. The move signals that AI security is no longer viewed as a narrow technical problem for individual vendors or governments, but as a shared international challenge requiring coordinated standards and oversight. The guidance emphasizes that AI systems depend on a far more complex supply chain than conventional software, because they are built not only on code and infrastructure, but also on data, pretrained models, training environments, and third-party services. As organizations adopt AI to improve efficiency and decision-making, their exposure to vulnerabilities across this chain grows, raising the risk that attackers could undermine the confidentiality, integrity, or availability of critical systems.

Japan’s Early Business Recovery Act to Come into Force

The Act on Financial Debt Adjustment Procedures for Enterprises to Facilitate Business Recovery, commonly referred to as the Early Business Recovery Act (the "Act"), was enacted in June 2025. It is scheduled to come into force by mid-December 2026, following the development of the relevant ministerial ordinances and related rules. The Act enables the restructuring of an enterprise’s financial indebtedness through a majority vote of financial creditors and court sanction.

Japanese "DBS‑Style" Child‑Protection Regime: Certification Strategy and Practical Readiness Ahead of December 25, 2026

On June 19, 2024, Japan enacted the Act on Measures to Prevent Child‑Targeted Sexual Violence by School Operators and Private Education/Childcare Providers, commonly referred to as the "Japanese DBS Act" or the "Child Sexual Violence Prevention Act." The "DBS" shorthand is used to describe a Japan‑specific screening and safeguarding framework that is inspired by the United Kingdom’s Disclosure and Barring Service ("DBS") regime.

Cabinet Office Publishes "Basic Plan on Artificial Intelligence—Revitalizing Japan through 'Trustworthy AI'"

On December 23, 2025, Japan’s Cabinet Office issued its "Basic Plan on Artificial Intelligence—Revitalizing Japan through 'Trustworthy AI'" (the "Plan"). The Plan reflects the view that rapid advances—especially in generative AI—have made AI a foundational technology for sustainable development, improving efficiency and convenience, while enabling scientific discovery and enhancing human creativity. Because AI directly affects industrial competitiveness and national security, public and private sectors are intensifying their efforts. In Japan, however, adoption in everyday life and business remains limited, and delays in development and investment are becoming increasingly apparent. The Plan therefore emphasizes "trustworthy AI," seeks to make Japan the easiest place in the world to develop and deploy AI, and positions AI as a core component of both risk-management and growth-oriented investment.