Japan Enacts Economic Security Law

The Japanese parliament has enacted the first comprehensive economic security legislation to enhance Japan's national security from an economic activities perspective, especially focusing on sensitive industry sectors such as rare earth, semiconductor, and infrastructure, as well as research and development ("R&D") of defense and dual-use technologies.

On May 11, 2022, the Japanese parliament enacted the groundbreaking "Act on Promotion of Economic Security by Integrated Implementation of Economic Measures." The framework of the legislation has been discussed since late 2021 and finally settled into the following four domains of economic security: 

• Resilient supply chain for strategic resources. The government will designate certain strategic resources that are fundamental to the national economy but heavily dependent on overseas sources, such as rare earth, semiconductors, batteries, and pharmaceutical drugs, and it will draw up the basic policy and