Following the restrictions that various countries have placed on Huawei and other Chinese companies, for security reasons, it is now Japan's turn to do something similar. In this case, of course, the restrictions have to do with foreign investors. The Japanese government has announced that it will set stricter laws, which those interested in making purchases in domestic technology companies and telecommunications organizations will have to follow.
The new rules will take effect on August 1 and concern investments in 20 specific industries. Foreign investors will have to contact the Japanese government and get special permission if they want to buy a Japanese company that is part of these industries.
Government approval is required when investors want to buy 10% (or more) of a company. If the government believes that any of these investments could be dangerous to the country, approval will not be granted. The Japanese government has called such investments a “threat to national security.”.
Japanese ministers said that nowadays, cyber risks are many. For this reason, the government has decided to take some measures to avoid anything that could jeopardize the country's security. One of the measures concerns the protection of technology companies, which is why Japan has decided to be stricter with foreign investment.
The industriescovered by the new rules are telecommunications companies, construction companies, and mobile phone manufacturers.
These rules are nothing new for Japan. It has long placed restrictions on foreign investors interested in making purchases in sectors such as aircraft, nuclear equipment and weapons.
However, it is not yet known whether the restrictions will affect investors from specific countries and whether a license will be required for specific companies belonging to the technology and telecommunications industries.
A few days ago, the US government imposed some trade restrictions on American companies. It banned them from buying, installing or using equipment from other countries. It also put Huawei on the Entity List and requires companies to seek permission to work with the Chinese company.
Huawei of course reacted and stated that this move by the United States will have serious impacts on international markets, disrupt global supply chains and disrupt fair competition.
