Foreign investment in activities related to 34 rare-earth metals now subject to screening
05 Oct 2021
On 4 November 2021 (after the 30-day transitional period), the amendment of the Foreign Exchange and Foreign Trade Act (the FEFTA) took effect. According to the amendment, business sectors related to 34 rare-earth metals (e.g. mining and mineral-related industries) have been added to the list of designated business sectors and core business sectors, and foreign investment in the sector is therefore subject to Government approval. The purpose of the amendment is to secure a stable supply of 34 rare-earth metals (e.g., lithium, cobalt and rare-earth elements).
Previously, on June 15, 2020, the Japanese government added the manufacturing of pharmaceuticals for specific infectious diseases and the manufacturing of specially controlled medical devices to the list of designated business sectors and core business sectors.
Under this FDI regulations, an advance filing must be made with the Bank of Japan by foreign investors who acquire: (a) one percent or more of the shares of a listed Japanese company which is engaged in any of the designated business sectors; or (b) one share or more of an unlisted Japanese company which is engaged in any of the designated business sectors.
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Type:
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Entry and establishment (Approval and admission)
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Industry:
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Primary (Mining and quarrying)
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Manufacturing (Manufacture of basic metals)
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Services (Construction, Other service activities)
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Sources:
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Ministry of Economy , Trade and Industry, Publication of the Amendments to the Regulatory Notices adding the Core Business Sectors of the Foreign Exchange and Foreign Trade Act to Secure the Stable Supply of Critical Minerals, https://www.meti.go.jp/english/press/2021/pdf/1005_001a.pdf, 05 Oct 2021
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Lexology, Recent Amendments to Foreign Direct Investment Regulations - Expansion of Designated and Core Business Sectors, https://www.lexology.com/library/detail.aspx?g=1a2cc222-5ca1-4def-beef-2117962c7e07, 05 Oct 2021
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Norton Rose Fulbright, Japan COVID-19 crisis inspires global tightening of Foreign Investment Screening, https://www.nortonrosefulbright.com/en-be/knowledge/publications/73a52155/japan, 30 Jun 2021
