Japan passes economic security Bill to guard sensitive technology

Measures in the legislation will be implemented over two years once it is enacted, according to the Bill. PHOTO: AFP

TOKYO (REUTERS) - Japan's Parliament on Wednesday (May 11) passed an economic security Bill aimed at guarding technology and reinforcing critical supply chains, while also imposing tighter oversight of Japanese firms working in sensitive sectors or in critical infrastructure.

Measures in the legislation, which is primarily aimed at China, will be implemented over two years once it is enacted, according to the Bill. It comes after United States imposed restriction on technology imports, such as semiconductors, amid growing tension with Beijing.

The new law also arrives as Russia's invasion of Ukraine - Moscow calls its actions "a special operation" - adds pressure on Japan to do more to protect supply chains and infrastructure from hacking and cyber attacks, and ensure that technology critical to national security is not stolen.

It will give Japan's government the power to order companies to notify it of software updates and vet some equipment procurement in 14 industries, including energy, water supply, information technology, finance and transportation.

The legislation also provides subsidies for companies to help them strengthen supply chains against disruption such as shortages of components shipped from overseas.

It further establishes a system for government officials to make on-site inspections at firms.

The new security mechanism it sets out promises government money for research and development into key technologies deemed important for economic security.

It also establishes a system of secret patents kept in Japan to ensure technological breakthroughs are not used by other countries to develop nuclear weapons or other military equipment.

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