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Exclusive: Japan to oblige firms to answer to supply chain surveys

Tokyo, Jan. 26 (Jiji Press)–The Japanese government’s proposed economic security legislation will oblige companies to answer to government surveys on supply chains for strategically important items such as semiconductors, sources familiar with the matter told Jiji Press on Wednesday.

The legislation would give the government authority to look into where companies are buying chips, pharmaceuticals, medical devices, advanced batteries and other key goods. A plan is also being considered to punish noncomplying companies.

Through the survey, the government will assess supply chain vulnerabilities in order to ensure a steady supply of key products and make domestic manufacturers more competitive.

The government will check the supply routes of such products and prepare for possible shortages in cases of political tensions and disasters, learning from shortages brought about by the COVID-19 pandemic.

Under the proposed legislation, the government will also give financial support to build supply chains for strategically important items.

“The legislation would make us capable of finding supply chain vulnerabilities across government agencies from the perspective of economic security,” a government source said.

Meanwhile, supply sources of cutting-edge items are key information for businesses. Therefore, the government will handle and protect the information carefully and consider introducing punishments for the leaking of the information held by the government.

Enhancing Japan’s economic security is a priority policy of Prime Minister Fumio Kishida. The government plans to submit the economic security legislation to parliament as early as late February.

Besides strengthening supply chains, the legislation’s four pillars will include ensuring the security of key infrastructure, promoting public-private technological cooperation and keeping patents on sensitive technologies secret.

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