October 5, 2021
Today, 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 is set out in the Official Gazette.
Summary
Since securing a stable supply of critical mineral resources such as rare earths is an important issue for economic security, the Ministry of Finance, the Ministry of Education, Culture, Sports, Science and Technology, the Ministry of Economy, Trade and Industry, and the Ministry of Land, Infrastructure, Transport and Tourism have reviewed the scope of industries and added the following two categories to the Core Business Sectors (Note 1) of Foreign Exchange and Foreign Trade Act (hereinafter “FEFTA”) from the perspective of appropriately maintaining and securing the exploration capability of critical mineral resources.
1. The following business sectors pertaining to 34 critical minerals including rare earths.
- Metal mining (including the operation of mineral exploration vessels or land/underwater surveys for mining)
- Manufacturing, repair/maintenance or software for devices or products used for metal mining (including mineral exploration vessels, marine equipment, excavators and drilling machines)
- Component analysis services of minerals
2. The construction service business etc. which improves or maintains port facilities on Designated Remote Islands (Note2) to secure smooth activities by mineral exploration vessels.
(Note 1) ”core business sector(s)” is a business sector which requires foreign investors (e.g. non-residents, foreign corporations) to file a prior-notification when the foreign investor conducts inward direct investment, etc. (e.g. acquiring 1% voting rights of a listed company, acquiring a share of an unlisted company) (“designated business sector”) and which foreign investors are not, as a general rule, exempt from the requirement for prior notification for stock purchases etc. as being highly likely to undermine national security etc.
(Note 2) “Designated remote islands” are islands remote from the mainland and are specified by a Cabinet Order under the Low Tide Line Protection Law as being important as a base of operations in light of the existence of natural resources, etc., and for which it is particularly necessary to develop facilities to serve as a base of operations (Okino-Tori-shima, Minami-Tori-shima).
Future Schedule
The provisions of the revised FEFTA Regulatory Notices is hereby promulgated on October 5 and shall apply to inward direct investment and equivalent actions to be made on or after November 4 after the 30-day transitional period.
