TOKYO - Japan on Monday established a cross-ministerial, U.S.-style committee to strengthen the country's prescreening of foreign investments, as it seeks to prevent leaks of critical technologies and ensure economic security.
The launch of the body, called the Japan Foreign Investment Committee, or JFIC, followed a revision to the foreign exchange and trade law to cope with rising applications as more sectors are deemed critical for national security.
"We will strengthen information sharing and enhance screening capabilities across the government as a whole," Prime Minister Sanae Takaichi said at the panel's first meeting at her office in Tokyo.
The committee was one of Takaichi's pledges during the Liberal Democratic Party leadership race she won in October last year and was included in the coalition agreement between her party and the Japan Innovation Party later the same month.
It is co-chaired by the Finance Ministry and the National Security Secretariat at the Cabinet Office. It also involves the Foreign Ministry, the Ministry of Economy, Trade and Industry, and the Defense Ministry, among others.
Previously, the Finance Ministry and the ministry or agency in charge of specific industrial sectors such as nuclear power, defense, aviation and electricity were required to screen foreign investors acquiring a certain level of shares in companies in the designated areas.
The revised law expands the scope of screening to cases in which a foreign company acquires another foreign company holding shares in a Japanese firm.
The panel was inspired by the Committee on Foreign Investment in the United States, an interagency body authorized to review investments in the country by foreign companies to determine whether they pose national security risks and advise the president to block those deemed problematic.
