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Gov’t to start with patent disclosure restriction in introducing economic security legislation

The government will seek to introduce economic security legislation in two stages, the Nikkei has learned. First it will submit to the 2022 ordinary Diet session a bill that restricts the disclosure of patents that concern sensitive technological areas. The submission of a bill that concerns “security clearance,” which restricts the public and private sectors from accessing information related to national security, will be discussed after the Upper House election next summer.


The government plans to submit an “economic security promotion bill,” which will include measures to deal with matters concerning economic security. It had initially planned to submit a package of legislation containing multiple ways to deal with economic security matters but has changed course.


The bill that will be submitted to the January Diet session is based on four pillars: restricting disclosure of patents; making the nation’s supply chains more robust; extending assistance for research and development (R&D); and making sure key infrastructure is safe and secure.


For now, the government will not include in the bill measures that concern security clearance. The U.S., which wants to exchange information with Japan more closely, is calling on Japan to build a mechanism to examine the qualifications of people who handle sensitive information. The Liberal Democratic Party has also proposed creating such a system.


Security clearance would require even civilians to be thoroughly screened on items such as their family members and family registration, who they associate with, and whether they have traveled overseas to check if they pose any risk of leaking information. As the matter is connected to human rights, wariness is spreading among some ruling camp members especially within the Komeito Party.


The resignation of Amari Akira, who led discussions on economic security within the LDP, as the party’s secretary-general has also caused momentum [for the establishment of security clearance legislation] to wane. Some LDP members were worried that the security clearance issue would affect the party’s election cooperation with the Komeito party ahead of the Upper House race.


There was hesitation within the business community as well. At a meeting held by the government’s panel on economic security, some members noted that “businesses are cautious because economic security is linked to regulations” and called on the government to provide “thorough and detailed explanations.” Senior executives of the Japan Chamber of Commerce and Industry (JCCI) and the Japan Business Federation (Keidanren) participated in the meeting.


In 2020, Japan’s imports totaled about 68 trillion yen, of which China accounted for a quarter, or 17.5 trillion yen. The country was Japan’s largest trading partner. There has also been concern that if Japan provokes China to align itself with the U.S., it will take an economic hit.


For similar reasons, the government will shelve measures on dealing with products that may contain elements of human rights violations and forced labor. The U.S. and Europe are moving to eliminate such products from global supply chains with an eye on human rights issues concerning China’s Xinjiang Uyghur Autonomous Region.


Japan also faces the question of whether it should introduce regulations on par with the U.S. and Europe, but the government will not include them in the legislation this time because China would react more harshly to them than to the introduction of a security clearance system.


The government and the ruling parties do not want security clearance to become a point of contention in the Diet debate before the Upper House election. They will hold discussions on the items that will not be included in the bill this time for submission to the autumn Diet session or the ordinary session that will be convened in January 2023.


Until then, the scope of sharing classified information with the U.S. and Europe will be limited and Japan may be questioned by the international community about its stance on human rights issues. (Abridged)

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