New Law to Promote Japan’s Economic Security to Enhance International Cooperation; Implications for staff to be taken into account

With the passage of a new law on Friday, the government will introduce a “security clearance system” that will require those who can handle important economic security information to be certified by the government.

With China in mind, the government plans to create an information protection system similar to that in Western countries, thereby supporting Japanese companies in their international business.

Catching up with other countries

“With the new law, Japan will be able to gain the trust of allies and like-minded countries because it has an information protection system of the same caliber as those countries, which will help increase the opportunities for Japanese private entrepreneurs to participate. in international research and similar activities,” Sanae Takaichi, minister in charge of economic security, said at a press conference held on Friday before a plenary session of the House of Councilors.

Because countries in North America and Europe have already established systems for protecting important information, including economic security secrets, Japan is lagging behind.

The Protection of Specially Designated Secrets Law, which came into effect in 2014, is intended to protect information that must be kept secret due to the risk of causing “serious harm” to Japan’s national security if it becomes public without authorization made.

The “important economic security information” to be designated under the new “Law on the Protection and Use of Important Economic Security Information” concerns secrets that could cause “damage” to national security.

Deciding on the status of key economic security information will be made by each administrative body of central government, with the Cabinet Office confirming whether such actions are appropriate or not.

The Cabinet Office’s independent secretary for public records management will also inspect and oversee the designation of such information, putting in place, the government says, a “layered system of checks”.

Reduce risk

During the parliamentary deliberation, Takaichi cited the following types of information to be covered by the new law: (1) information on cyber attacks on “key infrastructure,” including electricity and gas, and the government’s response measures; and (2) relating to information from foreign governments about international joint research into critical materials, including semiconductors and batteries.

China, Russia and some other countries have reportedly targeted Japan’s infrastructure with cyber attacks in an attempt to disrupt society.

The government plans to promote the exchange of information between the public and private sectors under the new system, thereby strengthening countermeasures against such attacks.

The government also plans to promote technical cooperation with Western countries to achieve “risk reduction” by reducing dependence on China for the supply of crucial goods and technologies.

The government aims to put the system into use in May next year. To do this, it will quickly convene a panel of experts to formulate operational standards, including details of the information to be covered.

Consequences for the staff

The government and private sector officials qualified to perform the task of processing important economic security information will be subject to background checks on seven matters, including their family, criminal records and substance abuse. The screening will be carried out by a centralized investigative body that will be established within the cabinet.

Based on the results of the screening, permission is granted to officials by each administrative body of the central government. The number of people with a permit is expected to be several thousand. The investigative body is expected to start with several dozen officials and be gradually expanded.

Concerns were raised during the Diet consultation that if an individual subject to screening refuses to undergo it or is found to be unqualified, they may face setbacks, such as unreasonable reassignment within the company.

The new law prohibits such actions and the government will provide specific examples of prohibited cases in its operational standards.