SAKURA Law Office | Legal Update by Managing Partner Kenshiro Michishita
October 9, 2026 | Primary materials reviewed through October 9, 2026 | JP/EN editorial reconciliation: October 22, 2026
SAKURA Law Office | Managing Partner Kenshiro Michishita
For companies conducting business across borders, bribery of foreign public officials is no longer adequately described as an isolated misconduct risk in a distant sales office. A payment made to secure a tender, expedite a discretionary licence, release goods through a port or obtain access to a state-controlled customer can implicate the law of the country where the payment occurs, Japanese criminal law, the United States Foreign Corrupt Practices Act (FCPA), and the United Kingdom Bribery Act 2010. The same facts may also undermine the reliability of financial statements, impair the value of an acquisition, disrupt public contracts and require the board to address an investigation in several jurisdictions. The legal exposure therefore extends well beyond the amount paid or the location of the relevant employee.
In Japan, Article 18 of the Unfair Competition Prevention Act prohibits the giving, offering or promising of money or other benefits to foreign public officials in prescribed circumstances involving an improper business advantage in international commercial transactions. Amendments that entered into force on April 1, 2024 increased the statutory penalties and widened the framework for addressing specified conduct abroad, including certain acts committed independently by non-Japanese employees of Japanese companies. In the United States, the Department of Justice changed its approach to prioritising FCPA investigations in June 2025 and introduced a Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy in March 2026. These prosecutorial policies must not be mistaken for amendments repealing statutory offences.
A multinational group cannot resolve this problem through a single global gifts-and-hospitality threshold. The decisive inquiry concerns the official status of the intended beneficiary, the exercise of public authority sought, the commercial objective, the ultimate destination of funds, the involvement and knowledge of intermediaries and company personnel, and the way expenditure is recorded. In the UK, the separate failure-to-prevent offence can place a commercial organisation’s preventive procedures directly in issue. A control system must therefore be capable of demonstrating not only a prohibition on bribery, but the decisions taken before onboarding an agent, approving a payment, acquiring an overseas business, or responding to a credible allegation.
This Legal Update follows those decisions in sequence. It begins with Japan’s substantive offence and the 2024 reforms; distinguishes the U.S. FCPA from recent Department of Justice enforcement policy; examines the UK Bribery Act and OECD framework; and then considers third-party contracting, cross-border M&A, internal investigations and board oversight. Its objective is to identify the legal distinctions and commercial safeguards that matter to Japanese companies expanding abroad, overseas businesses operating through Japanese entities, General Counsel, investment committees and counsel advising on international transactions.
Executive Summary
The legal starting point in Japan is a specific statutory prohibition, not a general presumption that any benefit provided to an overseas official constitutes a crime. Article 18(1) of the Unfair Competition Prevention Act addresses a person who gives, offers or promises money or another benefit to a foreign public official, etc., for the purpose of inducing conduct, an omission or specified influence connected with official duties, in order to obtain an improper business advantage in international commercial transactions. Article 18(2) defines foreign public officials broadly enough to require examination of certain state-related enterprises, public-interest bodies and public international organisations, as well as central and local government personnel. No transfer of money need be completed for an offer or promise to become legally significant, but the elements of the offence must still be established on the facts.
Since April 1, 2024, the relevant maximum Japanese statutory penalty for an individual is imprisonment for up to ten years, a fine of up to JPY 30 million, or both; where the corporate dual-punishment provision applies, the maximum fine imposed on the legal entity is JPY 1 billion. These are statutory maxima, not forecasts of a particular sentence. The amendments also address specified overseas acts by foreign-national employees of Japanese companies. Territorial application, the corporate relationship of the individual, acts undertaken in the course of business and the requirements of the dual-punishment provision must be considered separately. In particular, ownership of an overseas subsidiary does not, without further analysis, make its Japanese parent criminally responsible for every act of a subsidiary employee.
The U.S. FCPA presents two distinct legal inquiries: anti-bribery jurisdiction over issuers, domestic concerns and defined categories of conduct involving the United States, and books-and-records and internal-accounting-controls requirements applicable to issuers. A payment may thus be investigated both for its corrupt purpose and for its treatment in accounting records, but the two inquiries are not interchangeable. Executive Order 14209 in February 2025 and the Deputy Attorney General’s June 2025 FCPA guidelines altered enforcement priorities; they did not repeal the FCPA or remove the Securities and Exchange Commission’s separate authority. The Department-wide March 2026 self-disclosure policy provides important potential outcomes for qualifying cooperation and remediation, but not an unconditional right to avoid prosecution.
Under the UK Bribery Act 2010, section 6 addresses bribery of foreign public officials, while section 7 establishes a separate offence where a person associated with a relevant commercial organisation bribes another person intending to obtain or retain business or a business advantage for that organisation. An organisation may establish the statutory defence that it had adequate procedures designed to prevent associated persons from bribing. Whether a foreign-incorporated parent falls within the definition of a relevant commercial organisation requires analysis of its business presence in the United Kingdom; a UK subsidiary is not automatically a complete answer. The UK government’s six principles provide a structured, risk-proportionate compliance reference, not a substitute for the statutory test.
Compliance and transactional design must be connected. A company should scrutinise the purpose, beneficial ownership, public-sector relationships and remuneration of local agents, and make payment approvals contingent on evidence of real work and accurate invoices. Its contracts should support meaningful audit, disclosure, suspension, termination and remediation rights, without purporting to override local employment, privacy or procedural law. In M&A, the buyer should test how contracts and licences were obtained, allocate known and contingent exposure through appropriate representations, covenants and indemnities, and implement post-closing controls. When concerns arise, the first priorities are preservation, containment, independence of the investigation, protection against retaliation and coordinated assessment of reporting and enforcement risk across the relevant jurisdictions.
1. Japan’s statutory prohibition: improper business advantage and the scope of foreign public officials
Japan introduced its foreign-public-official bribery rules into the Unfair Competition Prevention Act against the background of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Article 18(1) protects the integrity of competition in international business dealings by prohibiting the provision, offer or promise of money or another benefit to a foreign public official, etc., for the purpose of obtaining an improper advantage in business through the official’s act or omission in the performance of duties or through the use of official position to influence another official. Its language makes both the relevant commercial objective and the link to official conduct material. The fact that a company has incurred an unusual overseas expense, or that a public official has received hospitality, does not alone establish every element of the offence.
The category of foreign public officials, etc., cannot be reduced to employees of a ministry or municipal government. Article 18(2) also addresses prescribed persons working for bodies established under foreign law to carry out certain public-interest functions, persons working for qualifying government-related enterprises, personnel of public international organisations, and persons exercising delegated public functions. An infrastructure concessionaire, state-influenced energy company or port operator may therefore call for a detailed examination of statutory control and function criteria rather than a simple inquiry into whether the entity is described as a government agency. The converse is equally important: minority state shareholding or a public-sector customer does not automatically mean that every employee comes within the Japanese criminal definition.
The benefit itself is not limited to cash. Accommodation or travel with no defensible business justification, entertainment, employment opportunities, donations, consultancy fees and advantages channelled to relatives or other third parties may be relevant where the statutory purpose and connection to official conduct can be established. The transaction should be assessed in context: the proximity of the benefit to a tender award or permit decision; the identity of the recipient and their relationship to decision-makers; the availability of a legitimate commercial explanation; the existence of a proper record; and whether the asserted service was actually performed. A modest nominal value is not an automatic safe harbour, just as ordinary and properly justified business hospitality is not inherently criminal by virtue of involving an official.
The inclusion of offers and promises is particularly important to a company investigating interrupted payments. Conduct may require assessment even if the proposed sum was never transmitted, a corrupt undertaking was later withdrawn, or an agent’s success fee was not ultimately paid. The central facts will concern the precise communication, the intended official act, the purpose of the offer or promise, and the role of persons who made or authorised it. An allegation that an intermediary made suspicious statements does not itself conclusively establish the intention or criminal responsibility of the company’s officers; contemporaneous communications, instructions, bank records and approval decisions remain necessary to distinguish suspicion from provable wrongdoing.
Nor is a payment legitimised because it is described locally as a facilitation fee, appreciation payment or customary commission. A request to expedite a customs release should be tested against the legally authorised fee, the proper government payee, the published procedure and the discretion actually exercised. Company personnel should ordinarily seek formal invoices and statutory payment channels, record the request and decline unofficial commitments while obtaining prompt internal advice. An immediate threat to life or physical safety requires priority attention to personal protection and a careful record of the circumstances; it must not be treated as equivalent to a commercial decision to purchase a favourable regulatory outcome. This distinction between coercive circumstances and the pursuit of business advantage is central to a credible later investigation.
2. The 2024 Japanese reforms: penalties, conduct abroad and the limits of parent-company liability
Amendments enacted in 2023 and brought into effect on April 1, 2024 materially strengthened Japan’s foreign bribery regime. Under the currently applicable provisions of the Unfair Competition Prevention Act, the maximum punishment for the specified foreign-public-official bribery offence is ten years’ imprisonment or a fine of JPY 30 million, or both, for an individual. The corporate dual-punishment mechanism under Article 22 provides for a fine of up to JPY 1 billion for a corporate entity where its statutory conditions are met. These upper limits should be stated accurately in group policies and transaction documents, but they do not remove the need to examine the conduct, actor, culpability and applicable charging or sentencing rules in a particular case.
A separate purpose of the reform was to address the position of non-Japanese employees of Japanese companies who independently engage in relevant conduct outside Japan. Earlier assumptions based only on the offender’s nationality or the physical location of the payment may now miss potential Japanese jurisdiction. The relationship between the individual and the Japanese business, the statutory basis for applying the penal provisions extraterritorially, and the circumstances in which corporate dual punishment may attach require close analysis. It is not correct to conclude either that every payment made abroad by a foreign national falls under Japanese law or that an overseas transaction is immune because no Japanese director physically handled the funds.
Group structure is consequently important but not dispositive. A locally incorporated subsidiary normally has legal personality separate from its Japanese shareholder. An act by that subsidiary’s employee is not automatically an act for which the Japanese parent is criminally liable solely because it consolidates the subsidiary’s accounts. The better inquiry is directed at the employment and agency relationships involved; the purpose for which the act was performed; instructions or authorisation from Japan; what relevant personnel knew; and the specific legal route by which individual or corporate liability could arise. The analysis must also distinguish statutory criminal responsibility from the parent’s separate duties of corporate supervision, contractual compliance and oversight of subsidiaries.
For example, a parent that approved an unusually large intermediary budget after repeated warnings that the funds were intended for government decision-makers presents a different evidential record from a parent whose overseas subsidiary made a concealed payment without authorisation or an available warning. Neither factual pattern can be resolved by a bare assertion that the group maintained an anti-bribery policy. Finance approvals, committee minutes, sales targets, commission calculations, transfer instructions, whistleblowing reports and review comments should be reconstructed chronologically. The same reconstruction helps management determine why preventive controls failed, regardless of whether a prosecutor ultimately establishes the elements of a particular criminal charge.
Where other jurisdictions have a connection to the transaction, the analysis must remain jurisdiction-specific. Local bribery law, Japan’s Unfair Competition Prevention Act, the FCPA and the UK Bribery Act may differ as to who qualifies as a public official, the acts criminalised, the requirements for corporate attribution, limitation periods and possible settlements or remedies. Parallel inquiries do not mean that one jurisdiction’s decision conclusively controls another’s. Evidence transmitted to one authority may also raise employee-data, secrecy, blocking-statute or privilege questions elsewhere. A coherent cross-border response begins by identifying the potentially competent authorities and applicable legal duties without treating an international corporate group as a single undifferentiated defendant.
3. The U.S. FCPA and the 2025–2026 enforcement reset: statutory obligations versus prosecutorial discretion
The U.S. Foreign Corrupt Practices Act is often a central concern in Japanese international transactions, but the jurisdictional inquiry must be disciplined. Its anti-bribery provisions address defined issuers, domestic concerns and specified persons or conduct involving the United States, including certain conduct carried out through intermediaries. It would be misleading to suggest that every Japanese group operating overseas is automatically governed by the FCPA merely because a transaction is denominated in U.S. dollars. Relevant considerations include the entity’s issuer status, the participation of covered persons, the place and means of communications or payment, the nature of agency relationships and the specific statutory jurisdictional elements. The existence of a U.S. jurisdictional nexus is a legal conclusion to establish, not a box to tick by reference to transaction currency alone.
The FCPA also contains accounting provisions of practical significance to issuers. The anti-bribery inquiry asks whether a corrupt payment was offered or made within the relevant legal framework. The books-and-records and internal-accounting-controls inquiry asks whether the issuer maintained appropriate records and controls over transactions and dispositions of assets. A payment labelled as consulting fees, customs expenses, marketing support or a one-time commission may expose the transaction to accounting scrutiny where the invoice was fabricated or the supposed service did not occur. Conversely, accurate accounting treatment does not itself legitimise a corrupt payment. Legal and finance teams must therefore investigate the commercial substance and the financial record together while respecting the distinct legal tests for each violation.
On February 10, 2025, Executive Order 14209 directed a temporary review of FCPA enforcement, and on June 9, 2025 the Deputy Attorney General issued updated guidelines for the initiation and pursuit of FCPA investigations and enforcement actions. The June memorandum identifies, among other non-exhaustive considerations, connections with cartels or transnational criminal organisations, harm to fair opportunities for U.S. businesses, national-security interests and signs of serious misconduct. It also distinguishes routine, low-value business courtesies from substantial payments coupled with concealment, fraudulent conduct or other aggravating features. These factors inform prosecutorial priorities and approvals. They do not amend the FCPA’s text, repeal the statute or authorise an otherwise unlawful payment. They should not be imported as a safe harbour into Japan’s or the UK’s independent criminal regimes.
The Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy, announced on March 10, 2026, serves a different function. It sets out conditions under which DOJ will decline prosecution of qualifying companies that voluntarily disclose misconduct, fully cooperate and timely and appropriately remediate, in the absence of disqualifying circumstances, while retaining stated discretion where aggravating factors exist. The policy separately provides a path for certain near-miss disclosures or qualifying matters involving aggravating factors, and preserves prosecutorial judgment in other cases. A company must consider how promptly disclosure is made, to which DOJ component, what was known before the disclosure, the quality of cooperation, remedial action and applicable disgorgement, forfeiture or restitution obligations. The policy expressly states that it creates no judicially enforceable right. Its public description is not a promise that a particular cross-border investigation will end without charges. The Department-wide framework generally covers DOJ corporate criminal enforcement apart from criminal antitrust matters, which remain subject to separate rules. It does not alter Japanese criminal law, the UK statutory offence or the allocation of rights under private contracts.
FCPA compliance also calls for care in discussions of exceptions and defences. The statute contains a narrowly framed provision concerning routine governmental action and provisions concerning payments lawful under the written laws of the foreign country or bona fide, reasonable expenditures directly related to specified legitimate purposes. Those concepts must be analysed on their statutory terms. A payment intended to procure a discretionary tender award, retain a contract or secure a favourable regulatory decision does not become a lawful routine-processing fee by being presented as an administrative convenience. Equally, DOJ’s decision to deprioritise a class of cases has no effect on foreign law or on the Securities and Exchange Commission’s independent responsibilities. The practical response is a transaction-specific assessment across potentially applicable laws, not reliance on selective quotations from an enforcement memorandum.
4. The UK Bribery Act and OECD standards: the liability of organisations that fail to prevent bribery
The United Kingdom Bribery Act 2010 adds an important dimension to multinational risk management. Section 6 addresses bribery of a foreign public official for the purpose of obtaining or retaining business or an advantage in business. Section 7 creates a distinct offence where a person associated with a relevant commercial organisation bribes another person intending to obtain or retain business or a business advantage for that organisation. The section 7 inquiry is thus directed not simply at whether a company director approved a particular payment, but at whether bribery by a person performing services for or on behalf of the organisation triggers the statutory organisational offence. The statute also contains general bribery offences that should not be confused with the more specific foreign-official provision.
The definition of a relevant commercial organisation includes UK-incorporated businesses and qualifying foreign entities that carry on a business, or part of a business, in the United Kingdom. Whether a non-UK parent falls within this definition requires examination of the actual business presence and statutory conditions. The mere existence of a British subsidiary does not conclusively determine the parent’s section 7 liability. Section 8 looks to the substance of whether a person performs services for or on behalf of the organisation, rather than relying solely on the contractual title of agent, consultant, distributor or subsidiary. This is why counsel should identify the true commercial beneficiary of an intermediary’s services, together with the organisational entity for which the relevant business was sought.
Section 7(2) recognises the defence that the organisation had adequate procedures designed to prevent associated persons from undertaking bribery. The UK Ministry of Justice guidance issued under section 9 identifies six principles: proportionate procedures, top-level commitment, risk assessment, due diligence, communication (including training), and monitoring and review. Its practical value is not that it prescribes one universal compliance manual. Instead, it directs attention to the scale of the organisation, the characteristics of relevant markets and transactions, and the effectiveness of measures in context. Where an agent’s compensation or public-sector connections are plainly high risk, a generic signed declaration may be insufficient to explain the company’s decisions or establish how the relevant procedures actually operated.
The UK framework should not be conflated with Japanese corporate dual punishment or the U.S. FCPA accounting regime. Different rules apply to the underlying conduct, the persons and organisations within jurisdiction, the available defences and the prosecuting authority’s powers. For a cross-border group, one central control architecture may be efficient, but legal conclusions must remain distinct. A document designed solely to meet the language of the U.S. FCPA may not adequately address the UK organisational offence, and an internal policy sufficient for general governance purposes in Japan is not proof that a UK statutory defence is established in any particular prosecution.
At the international level, the OECD Anti-Bribery Convention requires participating states to implement criminalisation and related obligations, while the OECD’s 2021 Recommendation provides an additional policy and good-practice framework for internal controls, ethics and compliance, third-party management and prevention. A Recommendation is not itself an offence-creating domestic criminal statute applicable directly to a company in every jurisdiction. Its importance lies in providing a recognised basis for aligning board supervision, commercial contracting and evidence of preventive work across different legal systems. The sophisticated compliance objective is therefore neither a single lowest-common-denominator policy nor mechanical duplication of local rules; it is a coordinated system in which cross-border decisions can be justified under each applicable legal standard.
5. Local agents and public-sector projects: making contractual promises effective at payment level
Third-party intermediaries are a recurring point of exposure because they combine lawful commercial access with limited visibility over how work is performed. A company may reasonably engage a local distributor, tender adviser, customs broker, regulatory consultant or business development agent for legitimate expertise. The risk changes when the proposed intermediary is introduced by an official or a close relative, cannot describe deliverables, seeks disproportionate success fees, refuses beneficial ownership disclosure or requests payment to an unrelated party or jurisdiction. None of these indicators proves a bribe. Taken together, however, they call for more than ordinary vendor onboarding before the company authorises a contract or releases funds.
The assessment should begin with commercial necessity. Management must be able to explain why the intermediary is required, what lawful services it will provide, how remuneration compares with the market, who ultimately owns or controls it, whether it has relationships with public decision-makers, whether subcontractors will be used, and where payments will be sent. Particular attention is warranted where an introduction fee arises shortly before a tender, an exceptional bonus is sought immediately after an award, or an additional regulatory-advice fee appears just before a licence decision. The value of diligence lies in matching contracts, invoices, meetings, correspondence and demonstrable work; a carefully drafted agreement is of little help if the business cannot establish that the supposed service existed.
Third-party agreements should translate those inquiries into enforceable, proportionate operating obligations. The business should consider precise compliance undertakings covering applicable anti-bribery law, disclosure of public-official connections, approval of subcontracting and payee changes, truthful invoicing, books-and-records obligations, access to relevant supporting documents, reasonable audit and cooperation rights, notification of credible concerns, lawful withholding of disputed or high-risk payments, remediation and termination where warranted. The clauses should be drafted for the actual jurisdiction, taking account of privacy, labour, secrecy and procedural restrictions. They must not purport to give an overseas contracting party unlimited power to seize employee communications or circumvent mandatory local law.
The more difficult task is to make the contract work within internal finance and sales processes. If the finance team receives an invoice materially above the approved commission rate, sales claims the payment cannot wait until after a public tender, or an official’s family charity becomes a proposed project sponsor, there must be a defined and usable escalation route. Hospitality, charitable contributions, scholarships, sponsorship, employment introductions and travel should not sit in independent policy silos where the aggregate benefit to an official or connected person cannot be understood. The company should require evidence of authorised recipients, proof of services, clear ownership of exceptions and an audit trail that permits later reconstruction without relying on the recollection of the sales executive who secured the order.
A direct demand for an improper payment presents a different form of pressure. Employees should know how to request the formal legal basis for an official fee, insist on an authorised payment channel where available, preserve evidence of the demand, and seek prompt guidance without promising a private advantage. In cases involving genuine danger to personal safety, the immediate priority must be protection of the individual and accurate documentation, rather than treating every emergency as an ordinary commercial approval. Corporate policy should not leave a junior employee exposed to local pressure and then assess their conduct solely by reference to a headquarters rule they had no practical means of implementing. Effective prevention combines a genuine refusal mechanism, a route to senior decision-makers, support for employees and records sufficient to establish what actually happened.
6. Cross-border M&A: transferring corruption findings into diligence, pricing, indemnities and integration
An acquirer of an overseas business should examine how its revenue was won with the same seriousness given to title, licences and the validity of key customer contracts. Dependence on public procurement or state-owned enterprises, customs approvals, land-use permissions, pharmaceutical authorisations, irregular intermediary fees, unusual cash expenses, politically connected shareholders, earlier hotline reports and regulator contact may all be relevant. Sector or country-level corruption indicators are a reason to tailor diligence, not evidence that the particular target has committed a crime. The objective is to trace transactions with credible risk indicators to their commercial purpose, beneficiaries, approvals and books-and-records treatment.
Diligence must also operate within legally permissible information boundaries. Acquiring a target does not give the buyer unlimited rights to access all employee messages, personal financial data or confidential government records before closing. Data-room permissions, competition-law clean teams, local employment law, cross-border data-transfer restrictions, legal privilege and document-retention duties may constrain how potential misconduct can be examined. Where material concerns emerge, the buyer should evaluate the scope for targeted additional diligence, the ability to obtain lawfully shareable records, the effects on a critical licence or customer contract, prospective remediation costs and the possibility of a post-acquisition investigation. An inability to investigate a material issue before signing or closing is itself a transactional risk requiring allocation; it should not be disguised as affirmative assurance that no issue exists.
A share purchase agreement or business transfer agreement can address these uncertainties through tailored representations, warranties, interim covenants, specific indemnities and conditions, calibrated to what can reasonably be established and the parties’ bargaining positions. Compliance representations may address specified anti-bribery laws, known improper payments, agent arrangements, official investigations, material hotline matters and accounting accuracy. The period between signing and closing may warrant restrictions on unapproved commissions, new politically connected intermediaries or changes to the approval structure. Identified risks may affect price, holdbacks, post-closing remediation arrangements or, where legally and commercially justified, a right not to complete. Private indemnification cannot negate criminal liability, prevent an agency from investigating or oblige disclosure of legally protected materials in breach of applicable law.
Where the proposed acquisition has an FCPA nexus, discovery of misconduct before or after completion can be relevant to how the U.S. Department of Justice evaluates the buyer’s response. The Department-wide March 2026 policy expressly refers to its separate M&A policy for misconduct uncovered in pre- or post-acquisition due diligence. That connection is important, but it is not a universal exemption from prosecution for conduct identified during an acquisition. Counsel must identify the actual eligibility conditions and policy in force, including disclosure, cooperation and remediation expectations, and avoid drafting an agreement on the assumption that a U.S. policy determines the rights of other authorities. The board or investment committee should receive a decision-ready explanation of material uncertainty and the potential regulatory timeline rather than a bare compliance sign-off.
Post-merger integration completes the legal analysis. A buyer should not preserve the acquired business’s intermediary network, political donations, entertainment arrangements or exceptional renewal fees by inertia. It should establish common approval thresholds, beneficial-owner checks, finance controls, hotline access, training and testing, while respecting local legal duties and business continuity. Where concerns emerge after closing, the purchaser must promptly differentiate historical conduct from payments it may itself be continuing or authorising. Integration plans should identify accountable owners and time-bound decisions for high-risk third parties, not defer them to an undefined future harmonisation project. In this setting, a successful closing is not the endpoint of corruption diligence; it is the transition from contractual risk allocation to active responsibility for the acquired business.
7. Investigations and board accountability: addressing potential offences without disabling the business
When an overseas finance employee reports an unusual payment to an agent linked to a government official, management’s first task is not to announce a conclusion about guilt. It is to prevent further unauthorised disbursements where legally permissible, preserve relevant evidence and protect the reporter and other participants against retaliation. Emails, messaging data, contracts, approvals, invoices, bank transfers, accounting entries and audit comments should be secured under a defensible preservation plan. The initial fact pattern should identify the business sought, the official decision at issue, the proposed or actual benefit, the decision-makers and the possible ultimate recipient. Conclusions concerning criminal intent, corporate attribution or statutory jurisdiction should follow evidence, not precede it.
Cross-border evidence collection requires particular care. Employee correspondence, personal devices, state-sensitive information, trade secrets, blocking statutes, employment rights and legal professional privilege may be subject to materially different rules across relevant jurisdictions. A Japanese headquarters team cannot assume that collecting every overseas mailbox into a domestic server or distributing entire interview memoranda to outside advisers is automatically lawful. Local and lead counsel should agree on authority to collect, preservation methods, review access, permissible transfer, interview protocols, retention and disclosures to authorities. Properly managing these boundaries is not obstruction of an investigation; it is part of conducting the investigation lawfully and preserving the reliability of evidence.
The March 2026 U.S. Department of Justice policy places substantial weight on full cooperation, including timely and accurate disclosure of relevant non-privileged facts, evidence concerning responsible individuals, preservation and production of overseas materials and reasonable lawful alternatives where foreign privacy or blocking rules restrict transfer. It does not generally require waiver of attorney-client privilege or work-product protection as a condition of cooperation credit. At the same time, a company invoking foreign-law restrictions must be able to substantiate them and identify credible alternatives rather than simply asserting that relevant material is located overseas. Counsel should document the legal basis for each restriction and the steps taken to preserve accessible evidence, so that the company can respond consistently to multiple authorities.
The decision whether and when to make a voluntary disclosure must be reached promptly but not mechanically. Some laws or contractual arrangements may impose notifications, and prosecutorial policies may give substantial significance to timing. These questions coexist with the reliability of the allegation, protection of individuals, the risk of evidence loss, market-disclosure duties, customer communications, insurance obligations and exposure in other jurisdictions. The DOJ’s 2026 policy does not mean that a report to an overseas regulator, or a premature public announcement, automatically satisfies its voluntary-disclosure conditions. A decision record should identify the evidence then available, unresolved facts, applicable legal duties, the persons authorised to decide, and the reasons for the chosen timing and scope of any disclosure.
Board oversight should extend beyond receipt of periodic training completion figures. Directors and General Counsel need to know where the group depends on discretionary public decisions, who can approve exceptional agent payments, whether adverse diligence findings have altered the transaction, how the audit function tests invoice substance, and whether internal concerns can reach an independent decision-maker. Where a director or senior executive is implicated, the scope and reporting line of an internal inquiry should be structured to avoid that person controlling the investigation of their own conduct. A credible programme is evidenced by difficult payments refused, decisions escalated, deficiencies corrected and commercial incentives adjusted when necessary. The ultimate governance objective is to align lawful market access with a defensible system of accountability, not to assert that compliance is achieved by possession of a policy document.
Frequently Asked Questions
Q. Which Japanese law prohibits the bribery of foreign public officials?
Article 18(1) of Japan’s Unfair Competition Prevention Act prohibits specified improper benefits, offers and promises involving foreign public officials in international commercial transactions. Penal provisions appear in Article 21 and the corporate dual-punishment rules in Article 22. The relevant statutory elements must be examined in each case.
Q. Is a gift or business meal lawful merely because its value is modest?
No universal safe harbour follows from modest value alone. Purpose, the official’s functions, proximity to a tender or licence decision, the beneficiary, local rules and applicable Japanese, U.S. or UK law all matter. Legitimate hospitality and a corrupt inducement must be distinguished on the facts.
Q. Can employees of state-owned enterprises be treated as foreign public officials?
They can be, depending on the particular statutory definition and the enterprise’s relationship to the state. Under Japanese law, Article 18(2) and applicable implementing rules require examination of government control, statutory features and relevant functions; government ownership alone is not a universal answer.
Q. Can there be a Japanese offence if no money was actually transferred?
Yes, potentially. Article 18 expressly includes offers and promises as well as completed provision of benefits. Whether a particular proposal or communication satisfies the offence still depends on its content, purpose, official connection and other statutory elements.
Q. What changed in Japan on April 1, 2024?
The amendments raised the relevant maximum individual penalty to ten years’ imprisonment and/or JPY 30 million, and the applicable corporate maximum to JPY 1 billion. They also broadened the approach to certain overseas bribery conduct by non-Japanese employees of Japanese companies, subject to the legal conditions for jurisdiction and corporate liability.
Q. Can a non-Japanese employee’s overseas conduct fall under Japanese law?
It may. The 2024 reforms address specified foreign-national employees’ conduct abroad, but there is no rule that every overseas act by any foreign national is prosecuted under Japanese law. The employment or agency relationship, nature of the business, conduct and statutory jurisdictional basis must be examined.
Q. If an intermediary pays a bribe without approval, must the Japanese parent always be prosecuted?
No. Individual culpability, agency and employment relationships, corporate dual punishment, applicable territorial rules and evidence of instructions or knowledge require separate analysis. Even absent proven criminal liability, oversight failures, contractual claims and reputational consequences may arise.
Q. Did the 2025 U.S. executive order abolish the FCPA?
No. Executive Order 14209 and the June 2025 DOJ guidelines changed enforcement priorities and approval procedures, not the statute itself. The FCPA’s substantive provisions and relevant SEC responsibilities remain distinct from DOJ charging policy.
Q. Can the UK failure-to-prevent offence apply to a Japanese business?
Potentially, where the statutory conditions for a relevant commercial organisation conducting business or part of its business in the UK are satisfied and the associated-person criteria apply. Having a UK subsidiary alone does not conclusively determine a Japanese parent’s liability. The adequate-procedures defence must be assessed in light of the evidence.
Q. How should bribery risk be reflected in an overseas acquisition?
The buyer should review public-facing contracts, intermediaries, commissions, licences and earlier concerns, and reflect verified risks and material uncertainties in tailored representations, interim covenants, indemnities, completion planning and post-closing controls. A private contract cannot remove criminal liability or bind an enforcement authority.
Q. Must a company immediately self-report every suspected payment?
The decision should be made promptly after assessing applicable reporting duties, the quality of the evidence, preservation needs, affected rights and all relevant authorities. The U.S. DOJ’s March 2026 policy provides benefits subject to detailed conditions; disclosure in another jurisdiction or a public statement does not necessarily satisfy them.
About the Legal Update Series
SAKURA Law Office and Managing Partner Kenshiro Michishita publish the Legal Update series to connect primary legal materials with the commercial decisions facing boards, General Counsel, investment professionals and legal advisers. The series covers corporate and M&A matters, private equity, international transactions and disputes, financial regulation, corporate governance, crisis management, compliance, economic security, artificial intelligence, data protection and other areas in which the legal framework affects business strategy. Each edition seeks to distinguish enacted law from implementing rules, official guidance and enforcement policy, and to translate that distinction into legal due diligence, transaction documentation, internal controls and the management of disputes. Information on the firm and the author is available through the official website and professional profile.
Related resources: SAKURA Law Office Official Website | Managing Partner Kenshiro Michishita — Professional Profile
How SAKURA Law Office Can Assist
SAKURA Law Office advises Japanese and international businesses on the application of Japan’s foreign-public-official bribery rules and their relationship to the U.S. FCPA, the UK Bribery Act and relevant laws in transaction jurisdictions. The firm can assist with anti-bribery policies, overseas agency and consulting agreements, risk-based third-party due diligence, contractual audit and termination provisions, corruption-related legal due diligence in M&A, allocation of risk under transaction agreements, governance and whistleblowing frameworks, internal investigations, evidence preservation and the legal assessment of reporting or authority engagement. Where overseas criminal, privacy, employment or procedural law is material, advice must be coordinated with appropriately qualified lawyers in the relevant jurisdictions. The availability of a lawful defence, a prosecution decision or any enforcement outcome cannot be guaranteed.
Contact
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Ark Hills South Tower 4F, 1-4-5 Roppongi, Minato-ku, Tokyo 106-0032, Japan
Managing Partner Kenshiro Michishita
Principal References
8. METI, Textbook on the Unfair Competition Prevention Act (official English-language textbook, 2025)
15. DOJ, Corporate Enforcement and Voluntary Self-Disclosure Policy (March 10, 2026; Department-wide)
16. DOJ, Evaluation of Corporate Compliance Programs and related policy resources (September 2024)
18. UK legislation.gov.uk, Bribery Act 2010 (UK Public General Act 2010 c.23)
19. UK legislation.gov.uk, Bribery Act 2010, section 6 (bribery of foreign public officials)
21. UK legislation.gov.uk, Bribery Act 2010, section 8 (meaning of associated person)
Disclaimer
This Legal Update is a general discussion based on publicly available primary materials reviewed through October 9, 2026, including Japan’s Unfair Competition Prevention Act and its 2024 implementing reform, METI guidance, the OECD Convention and Recommendation, the U.S. FCPA and DOJ guidance issued in June 2025 and March 2026, the UK Bribery Act 2010, and the UK government’s statutory guidance. It is not a legal opinion about any identified transaction or conduct, nor a prediction of criminal responsibility, regulatory outcome, disposition of an investigation or entitlement to a declination. The English-language translations and explanations of Japanese law referenced here do not override the currently applicable Japanese statutory text.
Jurisdiction, attribution of corporate liability, applicable defences, reporting obligations, enforceability of contract provisions, privilege and international evidence transfers depend on governing law and specific facts. Japanese administrative guidance, OECD recommendations, DOJ prosecutorial policies and UK government guidance have different legal status and should not be treated as interchangeable with binding legislation. Companies contemplating particular payments, the appointment of intermediaries, overseas acquisitions or voluntary disclosures should confirm current official materials and obtain advice from qualified counsel in the relevant jurisdictions.