Enter to open, tab to navigate, enter to select
Agricultural Law in Japan: Overview
Practical Law Country Q&A 3-604-8985 (Approx. 23 pages)
Agricultural Law in Japan: Overview
by Takashi Hirano and Taketo Nasu, Blakemore & Mitsuki Japan
| Law stated as at 01 Mar 2023 • Japan |
A Q&A guide to agriculture law in Japan.
The Q&A gives a high-level overview of agricultural law, including acquiring agricultural companies and co-operatives, competition law, land ownership and usage rights, pricing and tender processes, tax and financing, crop seed business, importing crop seeds, commercial crop production and distribution, plant variety right protection, GM crops, GM foods, importing animals, gene patents, and product liability.
Agricultural Policy
Japan is a member of:
- The World Trade Organization (WTO). Japan joined the WTO on 1 January 1995 (Japan joined the General Agreement on Tariffs and Trade (GATT) in 1955).
- The Food and Agriculture Organization of the United Nations (FAO). Japan joined the FAO on 21 November 1951.
- The International Plant Protection Convention (IPPC). Japan signed the IPPC on 6 December 1951 and ratified it on 11 August 1952.
- The Office International des Epizooties (OIE)/World Animal Health Organisation. Japan joined the OIE in 1930.
Japan promotes research, development, and technological innovation for the improvement and modification of agriculture, including in relation to:
- New plant varieties.
- Breeding methods.
- Gathering and maintaining information on genetic and environmental resources.
- Developing sustainable industries.
- Industrial technology.
- Competitive agricultural products.
However, as a major soybean and corn importer, Japan has a conservative stance on genetically modified organisms (GMOs).
To achieve its objectives, the government seeks to promote:
- The use of artificial intelligence (AI) in agriculture.
- Smart farming.
- The use of laser management.
- Real-time information gathering.
- The use of drones.
The government recently promoted the use of the MAFF (Ministry of Agriculture, Forestry, and Fisheries) app, a smartphone application that delivers useful information directly from the MAFF to everyone involved in the agriculture, forestry, and fisheries industries.
2. Is there a system for subsidies or other support for agriculture in your jurisdiction? Briefly outline its main provisions.
Japan became a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018. The CPTPP contains policies to address decreases in human resources, including subsidies for those who implement:
- The use of new technologies in farming machinery. The Japanese government grants subsidies to those whose work uses:
- unmanned, fully automatic, robotic farm machines that are remotely monitored;
- smart greenhouse facility gardening that implements data-driven agriculture; and
- any other smart agriculture utilising advanced technologies including robots, AI, internet of things (IoT), and drones.
- The use of IT tools in agriculture. The MAFF and local government grant subsidies to those who work in smart agriculture. The detail can be found at Smart Agriculture Comprehensive Promotion Measures Project Summary (in Japanese). The METI grants subsidies to those introducing IT tools to their business. The detail can be found at IT Introduction Support (in Japanese).
In view of the declining number of farmers in Japan, new farmers are subsidised. Starting in the 2022 financial year, an interest free loan of up to JPY10 million is granted to new farmers. The loan is repaid by the national and local governments, so there is no burden on a new farmer. The money must be invested in facilities and machinery. The detail can be found at MAFF: Promotion of New Farmers: Management Development Support (in Japanese) and Mynavi Agriculture: Farm Management: Expansion of farming support subsidies to 10 million yen, what are the risks hidden in the "friendly system" (in Japanese).
3. Do environmental issues form part of government support for agriculture in your jurisdiction? If yes, please give brief details.
The government supports sustainable agricultural practices that include environmental issues, for example, the impact of chemical substances and fertilisers. The government also promotes organic farming and provides subsidies to support farming activities that prevent global warming and promote biodiversity.
Subsidies are provided to farmers who take environmentally friendly actions, for example, taking measures to reduce carbon dioxide emissions.
5. Is agriculture governed at national and local level? Briefly outline any regional framework and variations if applicable.
The MAFF is the cabinet ministry that governs agriculture. It has seven regional offices and one district office in Hokkaido to administer agriculture matters at the local level. In practice, Japan Agricultural Co-Operatives (JAs), organised in every prefecture and municipality throughout the country, also play an important role in dealing with general agricultural issues at the local level.
Agricultural Business Vehicles
6. What business vehicles are typically used in the agriculture sector? Are specific forms such as co-operatives used and are they open to foreign investment?
Business vehicles qualified to own cropland used in the agricultural sector are:
- Agricultural producers' co-operative corporations (noji kumiai hojin).
- Companies, including:
- a stock company (kabushiki kaisha) (not a publicly held corporation);
- a general partnership company (gomei kaisha);
- a limited partnership company (goshi kaisha); and
- a limited liability company (godo kaisha).
The number of stock companies and agricultural producers' co-operative corporations has increased in recent years. In 2021, the most common form of business vehicle was a stock company.
The law governing agricultural producers' co-operative corporations is the Agricultural Co-Operatives Act (Act No. 132 of 1947). The Companies Act (Act No. 86 of 26 July 2005) governs stock companies, general partnership companies, limited partnership companies, and limited liability companies.
7. Is the acquisition of domestic agricultural business vehicles by foreign investors subject to special prior government approval(s)? If yes, set out the approval procedures and authorities involved.
The definition of a domestic agricultural company:
- Includes a company that carries out agricultural activities in:
- seed-level processing;
- R&D;
- breeding;
- production; and
- trading.
- Excludes any company involved solely in seed wholesale and retail.
- Excludes a company that merely carries out management and ancillary activities.
A foreign investor in a domestic agricultural company must provide prior written notification to the MAFF and the Minister of Finance (MOF) (Foreign Exchange and Foreign Trade Act (Act No. 228 of 1 December 1949)). Prior notification is also required when a foreign investor consents to a shareholders' meeting proposal to appoint a foreign investor or a person closely related to them as a director.
A notification must be filed within the six months prior to the payment date of the acquisition of stock or equity of a company. The investment cannot be made for 30 days after the date of receipt of the notification by the MAFF and MOF. This period can be extended for up to five months. Once the transaction is closed the investor must file a report to the MAFF and MOF within 45 days.
Since 8 May 2020, foreign investors have only been required to submit an ex post facto notification if certain requirements are met under the prior notification exemption system. To qualify, the foreign investor cannot:
- Be an officer of the entity (this also applies to persons closely related to an investor).
- Make proposals at the shareholders' general meeting to transfer or end a business of the entity.
- Access non-public technical information related to the business of the entity.
An ex post facto notification must be filed within 45 days of the payment date of the acquisition of stock or equity of a company.
Failing to give or giving a false notification is punishable by imprisonment with labour for up to three years or a fine of up to JPY1 million or no more than three times the price of the target company if this price exceeds JPY1 million.
8. Is there a specific competition (anti-trust) law regime for the agriculture sector? Briefly set out the aspects of the competition regime that are most relevant to agriculture (for example, restrictive agreements and practices and merger control).
The Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade (Act No. 54 of 14 April 1947) applies to agriculture, with special provisions on the activities of agricultural co-operatives. Unless co-operatives are engaged in unfair trade practices, or competition in any particular field of trade is substantially restrained, resulting in unjust price increases, the Act does not apply to co-operatives that meet all of the following conditions:
- The co-operative's purpose is mutual support among small-scale entrepreneurs or consumers.
- The co-operative is formed voluntarily, with partners able to freely participate in, and withdraw from, the co-operative.
- Each partner has equal voting rights.
- Any profit distributions among partners are limited by law or the co-operative's articles of association.
Acquiring and Holding Agricultural Land
9. Are there restrictions on the acquisition of agricultural land? Consider any restrictions on local and foreign investors, and on legal entities and natural persons.
There are no special rules on the acquisition of agricultural land by foreign parties or parties with foreign investment. A foreign party can acquire agricultural land or usage rights on obtaining the relevant approval under the Cropland Act (Act No. 229 of 15 July 1952) in the same way as Japanese parties (see Question 11, General Rule).
A non-resident that acquires real property in Japan, including agricultural land, or related rights must submit an ex post facto report to the Minister of Finance within 20 days after the acquisition.
Generally, an entity can lease but not own agricultural land, see Question 11, General Rule for Entities and Corporations Qualified to Own Cropland.
10. Briefly outline the main ways that agricultural land is held. What usage rights are typically granted over agricultural land (for example, leases)? Are there restrictions (such as a maximum length of lease terms)? Consider any restrictions on local and foreign investors, and on legal entities and natural persons.
The majority of agricultural land is held through ownership and leases.
The main laws applicable to the acquisition of usage rights and ownership of agricultural land are:
- The Civil Code (Act No. 89 of 27 April 1896).
- The Cropland Act.
- The Act on Reinforcement of the Agricultural Management Framework (Act No. 65 of 28 May 1980).
- The Act on the Support for Strengthening Agricultural Competitiveness (Act No. 35 of 19 May 2017). This Act does not focus on agricultural land but aims to structurally reform the agricultural industry as a whole.
The maximum term for a lease of land, including agricultural land, is 50 years. Generally an entity can lease but not own agricultural land, see Question 11, General Rule for Entities and Corporations Qualified to Own Cropland.
Where a lease agreement includes a specific term, and no notice of non-renewal is provided within one year to six months before the expiration of the term, the lease is deemed to have been renewed. However, this rule does not apply to leasehold rights established under an agricultural land use accumulation plan (see Question 11, Other Special Rules).
In principle, the termination (including mutual termination) or non-renewal of a lease agreement requires approval by the prefectural governor.
The use of land can be limited or subject to inspections in the event of contamination by designated hazardous substances.
11. Are there any compulsory tendering or prior approval procedures required for a sale of agricultural land? Briefly set out these procedures and any approvals required. Are there mandatory minimum land prices if the government sells agricultural land?
General Rule
In principle, an individual or entity that sells, buys, or leases agricultural land must obtain approval from the government agricultural affairs committee (established by the relevant municipal government). The effect of an act without approval is null and void (Article 3, Cropland Act).
The following requirements must be met to obtain approval:
- All agricultural land must be effectively used.
- Operations must be of a certain geometric area (in principle at least 50 acres, in Hokkaido, at least 2 hectares).
- There must be no hindrance to any neighbouring agriculture.
- The applicant must regularly engage in farm work (in principle, for at least 150 days per year).
The approval process takes about one month to complete. The process varies depending on the municipality, but it can briefly be summarised as follows:
- For the applicant:
- consultation about the application, consisting of a visit or call from the agricultural committee office;
- preparation of the application form; and
- submission of the application form.
- For the agricultural committee:
- receipt and review of applications;
- on-site survey;
- board of agricultural committee decision-making; and
- issuance of denial or approval. The applicant must collect the approval in person.
The contact information for each agricultural committee can be found on the website of the relevant municipality.
General Rule for Entities
Generally, an entity can lease but not own agricultural land. A lease must be approved by the government agricultural affairs committee. For the procedure for approval, see above General Rule. To obtain a lease, all of the following conditions must be met:
- All agricultural land must be effectively used.
- Operations must be of a certain geometric area (in principle at least 50 acres; in Hokkaido, at least 2 hectares).
- There must be no hindrance to any neighbouring agriculture.
- The lease agreement must include a provision allowing for termination if the agricultural land is not being used appropriately.
- The agricultural business must be carried out in co-operation with local stakeholders, including, for example:
- discussions on the maintenance and development of agriculture;
- agreements on joint-use facilities including farm roads, waterways, and reservoirs; and
- co-operation in measures to prevent animal damage.
In this regard, a potential lessee or lessor should submit a written co-operation commitment to, and conclude an agreement with the agricultural committee. - At least one officer of the entity must be regularly engaged in the agriculture business.
Corporations Qualified to Own Cropland
An entity that wishes to own or lease agricultural land can do so as a corporation qualified to own cropland if the requirements in the first three bullets above, see General Rule for Entities, are met and:
- The entity is:
- an agricultural producers' co-operative corporation;
- a stock company (kabushiki kaisha) (not a publicly held corporation);
- a general partnership company (gomei kaisha);
- a limited partnership company (goshi kaisha); or
- a limited liability company (godo kaisha).
- The entity's main business is agricultural business.
- A majority of voting rights belong to agriculture-related persons (including local public bodies and agricultural co-operatives).
- A majority of officers are regularly engaged in the corporation's agriculture business（in principle, for at least 150 days per year).
- One or more of the officers or employees who regularly engages in the agriculture business above must also be engaged in farm work necessary for the corporation's business. The MAFF will issue an order specifying the employees and the number of days per year they must spend on farm work (in principle, at least 60 days per year). Farm work means any work necessary for cultivating crops or raising livestock, for example, ploughing, levelling, seeding, fertilising, pest control, harvesting, water management, feeding, and replacing straw.
To become a corporation qualified to own cropland an entity must be approved by the government agricultural affairs committee. For the procedure for approval, see above General Rule.
Other Special Rules
Agricultural land use accumulation plan. Alternatively, an individual or entity can sell, purchase, or lease agricultural land by establishing or transferring rights under an agricultural land use accumulation plan prescribed by the municipal government. A plan enables its participants to carry out several transactions by including various rights transfers in one document.
To use this procedure to lease or sell farmland, the lessee and lender must prepare an Agricultural Land Use Clustering Plan and Application for Establishment of Usage Rights or Application for Transfer of Ownership and submit them to the relevant section of each municipality. The required documents and format of the application may vary depending on the municipality. Therefore, prospective applicants should inquire in advance for details. Generally, inquiries should be made by phone, and the details are on the municipality website.
Compulsory tender of government-owned land. The sale or lease of government-owned agricultural land is subject to a compulsory tendering procedure. To participate in a compulsory tendering procedure, an individual or entity must be able to obtain approval under Article 3 of the Cropland Act. The approval procedure can be found in the General Rules section of Article 3 of the Cropland Act Law. If no individual or entity is awarded the compulsory tender, the property is sold or leased on a first-come, first-served basis at a fixed price.
The main requirements for the expropriation of land, including agricultural land, are set out in the Expropriation of Land Act (Act No. 219 of 9 June 1951) as follows:
- The expropriation or use of land is necessary in the public interest. The expropriation must be for one of the public interest purposes in Article 3 of the Expropriation of Land Act.
- The expropriator is a person or entity with the intention and capacity to implement the relevant undertaking for public interest.
- The undertaking for public interest plan contributes to the appropriate and reasonable use of the land.
- The party carrying out the expropriation, for example a government authority, must provide compensation to the landowner.
The general rules of the Cropland Act otherwise apply.
13. Is the abstraction of water controlled by license or quantities? Briefly set out the main provisions, legislation and regulatory authorities.
Any person who intends to use river water must obtain the river administrator's permission (permitted water rights) under the River Act (Act No. 167 of 10 July 1964). As an exception to this provision, agricultural water rights are socially accepted on the basis of custom and practice of long-term water use (customary water rights). However, because of the ambiguity of these rights, almost all customary water rights in large-scale agricultural areas over 1,000 hectares have already been converted into permitted water rights. The administrator is:
- The Minister of Land, Infrastructure, Transport, and Tourism, for Class A rivers.
- The governor of the relevant prefecture, for Class B rivers.
- The mayor of the relevant municipality, for quasi-Class B rivers.
(River Act.)
Each jurisdiction has its own procedure.
Taxes are imposed on the net profit (that is, income minus relevant acquisition costs and other necessary costs) generated by a transfer of agricultural land.
Individuals
An individual is subject to income tax and residents' tax (local tax) on capital gains.
When an individual transfers land, the tax on capital gains is not calculated together with other income, but is treated separately, with the tax rate depending on how long the individual held the land. If before 1 January of the year of the transfer, the individual held the land for a period specified below, the income tax rate (national tax) and residents' tax rate (local tax) are as follows:
- More than five years: the income tax rate is 15% and the residents' tax rate is 5%.
- Five years or less: the income tax rate is 30% and the residents' tax rate is 9%.
However, a surcharge of 2.1% is imposed on the income tax amount for the period between 2013 and 2037 as a special income tax for reconstruction following the Tōhoku earthquake and tsunami.
If the individual acquired the land through inheritance or as a gift:
- The period during which the decedent or the donor held the land is deemed to be the period that individual has held the land.
- The value for which the decedent or donor acquired the land is deemed to be the individual's acquisition costs.
Corporations Qualified to Own Cropland
A corporation qualified to own cropland (see Question 11, Corporations Qualified to Own Cropland) is subject to corporation tax and corporate inhabitant tax on all its income.
The corporation tax rate is usually 23.2%. However, it is generally 15% for a corporation with capital of JPY100 million or less within the scope of up to JPY8 million of taxable income. In addition, a local corporate tax (national tax) is imposed at a rate of 10.3% of the corporate tax amount. That rate was 4.4% for fiscal years beginning on or after 1 October 2014 and ending on or before 1 October 2019.
The rate of corporate inhabitant tax varies depending on the corporation's capital and the number of employees.
Special Deductions
Special deductions have the effect of reducing capital gains and shrinking taxable income.
Taxes imposed on the transfer of assets, for example, farmland benefit from special deductions, depending on current policies and the nature of the transfer. For example:
- A special deduction of JPY8 million from the transfer profit is available for individuals and corporations qualified to own cropland if the land is sold:
- to a certified farmer under a mediation procedure conducted by a government agricultural affairs committee;
- through a promotion business activity; or
- to an intermediate institution that manages agricultural land.
- A special deduction of JPY15 million is available if the land is sold under a sale and purchase consultation. A sale and purchase consultation is a procedure under which an agricultural landowner wanting to sell its land can make an application for mediation to the agricultural affairs committee (established by the relevant municipal government). If an appropriate buyer cannot be found by the committee, the landowner is notified and purchase consultations are carried out with an agricultural land holding rationalisation corporation (which is a public prefectural corporation).
- A special deduction of JPY20 million is available for the transfer of agricultural land in agricultural land use zones to the Organisation for Land Management in accordance with the Agricultural Land Use Regulations under the Act on Promotion of Improvement of Agricultural Management Foundation.
To create a mortgage over agricultural land, a mortgage agreement must be executed. To assert a mortgage against third parties, it must be registered with the government.
Separating a mortgage placed on agricultural land from the land itself is possible, to transfer that mortgage (together with the secured claim) to a third party. It is also possible to separate the secured claim from the mortgage and transfer only the mortgage to another creditor of the same debtor. A transfer of mortgage over agricultural land does not require the approval of the relevant local governmental agricultural affairs committee.
To create a pledge of agricultural land rights, the following requirements must be met:
- Approval of the agricultural affairs committee must be obtained.
- A pledge agreement must be executed.
- Possession of the land must be transferred to the pledgee.
To assert a pledge against third parties, it must be registered with the government.
Separating a pledge of agricultural land from the land itself is possible, as for mortgages (see above). However, approval of the relevant local governmental agricultural affairs committee is required to transfer a pledge of agricultural land.
It is also possible to create a security interest by way of assignment, under procedures similar to those for the transfer of ownership rights.
A foreign investor can be a party to a security agreement relating to agricultural land.
Crop Seed Business
16. State the approvals/licences that are required to import new plant species or varieties and crop growing technologies. Briefly outline the approval process, legislation and regulatory authorities.
The Plant Protection Act (Act No. 151 of 4 May 1950) imposes quarantine measures on exported and imported plants and domestic plants, and controls on animals and pests injurious to plants.
The Food Labelling Act (Act No. 70 of 28 June 2013) imposes controls on the labelling of agricultural products for sale, residual agricultural chemicals, and food additives. There is a designated seed system with rules on labelling of designated seeds and standards relating to the production of seeds and fairness in seed distribution.
For details on the rules applicable to GM seeds, see Question 22 and Question 23.
The central authorities are:
- The MAFF's Intellectual Property Division, Export and International Affairs Bureau, regarding crops including their distribution and consumption.
- the MAFF's Plant Protection Division, Food Safety and Consumer Affairs Bureau, regarding quarantine proceedings.
- The Consumer Affairs Agency.
Japan is a party to the WTO and IPPC. Japan implements plant quarantine procedures based on international standards. Japan has repeatedly updated its import quarantine system in compliance with the IPCC ISPMs, but this does not necessarily mean that at any time all ISPMs are implemented verbatim in Japanese domestic law.
Import Controls
A request for inspection must be made to the relevant MAFF plant quarantine station at the time of import, and a certificate of plant quarantine must be issued by the quarantine body of the exporting country, indicating that there are no pests on the plants. If pests are found on the plants, measures are imposed regarding disinfection, extermination, and disposal.
Plant imports are classified as follows:
- Items for which import is prohibited. These include:
- plants listed in the Order of Enforcement of the Plant Protection Act;
- living pests subject to plant quarantine;
- soil or plants to which soil is attached; and
- packaging or containers of the above items.
Import may be possible where the item is to be subjected to research and development or exhibition at a research and development institution or museum, in which case prior approval of the MAFF is required. It usually takes at least one month to obtain approval. If a complete disinfection method is established in the exporting country, the import ban may be lifted, subject to conditions. - Items requiring inspection at the time of import. In principle, all other items fall into this category. An inspection certificate issued by the exporting country's government must be submitted at the time of import inspection. The import of these items is allowed provided no pests are found. If pests are found, measures will be imposed for the return or destruction of the items. Where disinfection is possible, import may be allowed if the disinfection is carried out.
- Items not requiring inspection at the time of import. These include items that are highly processed or hermetically sealed, for example, wood works, wood packing materials, textile products, and items pickled in alcohol.
See MAFF: Database of importing conditions for more information.
If import controls are applicable under the Convention on International Trade in Endangered Species of Wild Fauna and Flora 1973, a certificate of export approval from the exporting country and an import approval from the METI are required.
The import of invasive species as defined by law is prohibited in principle, see Ministry of the Environment (MOE): List of Regulated Living Organisms under the Invasive Alien Species Act [Animal Kingdom]. Prior notification must be made to the MOE for items that are deemed to be uncategorised alien species. The MOE will decide whether there is any ecosystem risk and determine whether to designate the species as a new invasive alien species. If so, import becomes prohibited in principle.
To import seeds as food products, procedures must be also carried out under food products-related laws.
Export
Quarantine conditions differ depending on the country of export. For a list of export conditions, see MAFF: Export Conditions (in Japanese). If a plant quarantine certificate is needed, the exporter must apply for an export inspection and, if the inspection is passed, must obtain a plant quarantine certificate for export.
A Bill to reform the Plant Variety Protection and Seed Act (Act No. 83 of 29 May 1998) was enacted in December 2020 and subsequently came into effect. Under the Act, a breeder's right holder can designate the countries where the protected seeds can be exported. An exporter cannot export seeds to a non-designated country, or they may be found to have infringed the breeder's right.
17. Briefly outline any additional approvals/licences that are required for:
- Setting up R&D centres and test plots for new crops.
- Crop seed production.
- Commercial crop production.
- Distribution of seeds or crops (wholesale, retail and e-commerce).
R&D Centres and Test Plots for New Crops
There is no approval or licence system for setting up R&D centres. There are cases where, subject to MAFF approval, a plant whose import is prohibited can still be imported for R&D purposes.
For information on GMOs and crops derived from the use of new technologies, see Question 22 and Question 23.
For information on regulations of invasive alien species, see Question 16, Import Controls.
Crop Seed Production
While there is no approval system for the cultivation/production of crop seeds, there are specific rules that apply to entities that sell, buy, or lease agricultural land for cultivation purposes (see Question 11).
Effective on 1 April 2022, the permission of the breeder's right holder is required for propagation by farmers of registered varieties.
Commercial Crop Production
Effective on 1 April 2021, it is prohibited to cultivate registered seeds in areas that are contrary to the will and intent of the breeder's right holder.
Distribution of Seeds or Crops
The sale of food products is subject to labelling rules and controls.
Any person that seeks to carry out the business of shipping or selling rice must, before commencing business, submit a notification of commencement to the MAFF. In addition, any non-recognised use of rice is prohibited. A party that engages in the shipping, sale, purchase, moving, or disposal of rice, seed rice, and certain processed rice, must keep records of its activities for three years.
Dealers (including importers) of designated seeds (which include all agricultural, forestry, and aquatic plants for food use) who commence or modify their seed business must notify the MAFF within two weeks of the start/change. Designated seeds must bear labelling that contains information including the variety and place of production.
Effective on 1 April 2021, it is prohibited to export registered seeds against the will and intent of the breeder's right holder.
Plant Variety Rights
18. What are the legal conditions to obtain a plant variety right (PVR) and which legislation applies?
The Plant Variety Protection and Seed Act promotes the breeding of new plant varieties by granting intellectual property rights (breeder's rights) to persons breeding new varieties of agricultural, forestry, or aquatic plants.
To be protected, the variety must satisfy the following requirements:
- It must be new.
- It must be distinguishable from existing varieties, stable, and uniform.
- Its denomination must be appropriate.
The plant variety must be registered with the MAFF to obtain a PVR.
Patent protection under the Patent Act is also available.
Japan has ratified the International Convention for the Protection of New Varieties of Plants 1961 (UPOV Convention) and its revisions in 1972, 1978, and 1991.
A foreign national who has no domicile or residence in Japan cannot benefit from plant breeder's rights or any related rights, unless the country of the foreign national:
- Is a party to the 1991 Act of the UPOV Convention.
- Is a party to the 1978 Act of the UPOV Convention, and an application is made for the variety to be protected in that country.
- Grants reciprocal treatment to Japanese nationals, and an application is made for the variety to be protected in that country.
A person who does not have an address in Japan or an entity that does not have a business location in Japan must appoint a variety registration manager to carry out certain procedures, for example, plant variety registration.
The breeder of the new plant variety (or its successor in title) can apply to the MAFF for registration if the variety meets the requirements for protection (see Question 18). Certain application details are made public on filing of the application.
The MAFF:
- Carries out examinations regarding the variety's characteristics and denomination.
- Confirms that there have not been any transfers of propagating or harvested material of the variety in the course of business either:
- in Japan, earlier than one year before the date of application; or
- in any foreign state, earlier than four years before the date of application (six years in the case of a perennial plant).
If the application is accepted, registration is indicated in the registry of plant varieties, the applicant is notified, and necessary public announcements are made.
The first-to-file rule and the principle of reciprocity apply.
The registration can be cancelled (if cancellation is deemed necessary). Unlike the Patent Act, the Plant Variety Protection and Seed Act does not provide for any judicial invalidation proceedings, but only for an administrative hearing cancellation procedure.
20. How long does PVR protection last? Are there restrictions on the rights of the PVR holder or exemptions, such as farmer's privilege?
Extent of the Protection
The term of protection of plant breeder's rights is:
- 25 years from the date of registration (20 years for varieties registered between 24 December 1998 and 16 June 2005).
- 30 years from registration for perennial plants (25 years for varieties registered between 24 December 1998 and 16 June 2005).
A breeder's right holder has the exclusive right to exploit the registered plant variety and plant varieties whose special characteristics cannot clearly be distinguished from the registered plant variety (including essentially derived varieties). The denomination of a registered variety must be used in the transfer of the registered variety in the course of business, and cannot be used in the transfer of a non-registered variety in the course of business.
The Plant Variety Protection Act does not provide for extension or renewal of registration.
Restrictions on the Rights of the Holder
A holder's rights do not extend to any of the following:
- Exploitation for purpose of experimentation and research.
- In connection with a process patent:
- exploitation of the variety by the holder or licensee of a patent right for the process of breeding the registered plant variety;
- exploitation after that patent has lapsed;
- exploitation of the harvested material obtained by using the seeds of the registered plant variety; and
- exploitation of the processed goods pertaining to the harvested material referred to in the above bullet.
- When the right is exhausted (that is, the registered plant variety's seeds, harvest, and processed goods have been transferred by or with the consent of the right holder), except acts involving further propagation of the registered plant variety.
- Exporting propagating material of the registered variety to a state that does not provide protection for the plant genus or species to which that registered plant variety belongs, or exporting harvested material of the registered variety to a state for a purpose other than final consumption, unless the applicant notifies the MAFF of that state on filing the application.
A breeder's right holder can request an injunction against any party that is infringing or is likely to infringe its right, ordering them to discontinue or refrain from the infringement. The holder can request the destruction of the relevant seeds or other measures necessary to prevent the infringement.
In infringement proceedings, there is a presumption that the breeder's right holder has suffered damage and that the infringing party was negligent. The party arguing against infringement must show that there was no infringement, submit related documentation, and comply with confidentiality protective orders.
Where necessary, the courts can issue orders against infringing parties to restore the business reputation of the breeder's right holder.
Genetically Modified (GM) Crops
22. Set out the legislation and regulatory authorities in relation to genetically modified (GM) crops. Has your jurisdiction ratified the Cartagena Protocol on Biosafety 2000? What is your government's policy in relation to GM crops?
Cartagena Act
Japan ratified the Cartagena Protocol on Biosafety 2000 in November 2003. The Act on the Conservation and Sustainable Use of Biological Diversity through Regulations on the Use of Living Modified Organisms (Act No. 97 of 18 June 2003) (Cartagena Act) was promulgated to implement the Protocol, and both became effective in February 2004.
GMOs, including GMOs used in food, feed, or processing, are classified as Type 1 or Type 2 Use under the Cartagena Act (see Question 23, Cartagena Act). The Act requires prior assessment, prior approval, and confirmation of the environmental impact of GMOs on Japan's biodiversity, as required under the Cartagena Protocol.
The Cartagena Act is administered under the joint jurisdiction of the MAFF, MOE, METI, Ministry of Finance (MOF), Ministry of Education, Culture, Sports, Science and Technology, and Ministry of Health, Labour and Welfare (MHLW). The MOE, MHLW, and MAFF are the competent ministries with respect to agricultural matters.
Food Safety Act
The Food Safety Basic Act (Act No. 48 of 23 May 2003) aims to comprehensively promote food safety by establishing basic principles and a basic policy for formulating food safety measures. It also established the Food Safety Commission of the Cabinet Office.
Act on Safety Assurance and Quality Improvement of Feeds
The Act on Safety Assurance and Quality Improvement of Feeds (Act No. 35 of 1953) (Feed Safety Act) regulates the safety of feed for farm animals, under the jurisdiction of the MAFF. This includes the safety of milk, meat, and eggs (MMEs) derived from farm animals that ingested feed containing GMOs for human consumption.
23. Set out the permit/licensing requirements and prohibitions in relation to GM related activity and the key legislation and regulatory authorities.
Cartagena Act
Type 2 Use. Type 2 Use is in-facility use undertaken with the intention of preventing the dispersal of GMOs into the environment outside the facility.
Type 2 Use requires the adoption of preventive measures prescribed separately by the government and confirmed by the competent minister.
Type 1 Use: isolated field use. Direct use or use in processing as food or feed not falling under Type 2 Use is deemed to be Type 1 Use. In principle, a Type 1 Use approval for isolated field use must first be obtained, even if the actual cultivation in Japan of GMOs is not expected. The applicant must submit to the MAFF or MOE:
- Type 1 Use Regulations, which include the GMO name and the content and method of Type 1 Use.
- A biodiversity impact assessment report.
- An emergency plan.
First, the Committee for Assessment of Effect on Biological Diversity examines the application. If the Committee determines that there is no risk of effect on biodiversity, the MAFF gathers reports on the matter, submits the matter for public comment, and the MAFF or MOE determines whether to issue approval. The standard processing period is six months, but in practice more time may be required.
Type 1 Use: ordinary use. After the acquisition of a Type 1 Use isolated field use approval, a Type 1 Use ordinary use approval can be obtained. The ordinary use approval currently includes cultivation, even if actual cultivation in Japan is not expected (except for the commercial cultivation of ornamental flowers for cut flower use). The procedure is the same as for an isolated field use approval. However, if the GMOs are to be used as food or feed, the applicant must also go through a food or feed safety assessment. The approval process usually takes 12 to 18 months.
Penalties for non-compliance. A party that uses GMOs in violation of the above rules can be subject to one or all of the following:
- Compulsory orders for collection.
- Imprisonment for up to six months.
- A fine of up to JPY500,000.
Violation of an order carries a further penalty of imprisonment for up to one year, a fine of JPY1 million, or both.
Safety Assessment of Food under the Food Safety Act
An application must be made to the MHLW, together with materials providing the information prescribed in the MHLW's public notifications. The Food Safety Commission (FSC) examines the matter, during which time a specialised panel of experts makes a report to the FSC and the matter is submitted for public comment. The FSC reports its findings and opinion to the MHLW. The MHLW will make a safety confirmation if it determines that there is no risk of effect on human health. The applicant is notified of the decision and the outcome of the safety assessment is made public. The standard assessment process period is one year.
Safety Assessment of Feed under the Feed Safety Act and Food Safety Act
An application must be made to the MAFF, together with materials providing the information prescribed in the MAFF's public notifications. The Agricultural Materials Council examines the matter, opinions are gathered, and the matter is submitted for public comment. In relation to MME's safety for humans, the MAFF consults the FSC, which examines the matters together with its food safety assessment.
Once the MAFF has completed the feed safety assessment (and, where applicable, the food safety assessment) and determined that there is no risk for farm animals (and humans, where applicable), it will make a safety confirmation, notify the applicant, and publicise the outcome of the assessment.
When introducing a new GMO, the process (which lasts about 24 months) usually involves the following steps:
- Making simultaneous applications for isolated field use, approval under the Food Sanitation Act, and approval under the Feed Safety Act.
- Once approval for isolated field use is acquired, making an application for ordinary use.
- After receiving the safety assessments for approval under the Acts, ordinary use approval is acquired.
Labelling Requirements
The sale of GM agricultural products and processed foods using these products is prohibited if they do not comply with certain labelling requirements. Appropriate GM labelling is required where:
- GM crops are used and segregated.
- GM and non-GM crops are used, but not segregated.
- There is GMO adventitious presence exceeding 5%.
A voluntary "no GMOs" label can currently be used where:
- Segregation methods are implemented and there is no GM commingling.
- For corn and soybeans, segregation methods are implemented and GM co-mingling is 5% or less.
From April 2023, the "no GMOs" label will only be available in the first case above.
Labelling is not required if the GMO or protein derived from it no longer exists after processing.
Prior consultations must be conducted with, and information must be submitted to, the MAFF before importing and using crops derived from the use of new technologies, even for non-GM crops.
Animal and Animal Welfare Issues
Animals must be declared at customs and are subject to quarantine. Quarantine stations are set up at major national airports and ports for the inspection of imported animals and animal products, including:
- Animals and birds, for example, even-toed ungulates, horses, poultry, dogs, rabbits, and honey bees.
- Bones, muscles, skin, and processed goods derived from them.
- Hay and straw.
Animals are tethered in isolation facilities.
Animals are inspected for animal infectious diseases (28 diseases) and notifiable infectious diseases (71 diseases). There are also region-specific import prohibition measures regarding virulent infectious diseases. A certificate of inspection from the exporting country is required for designated quarantine items. If the inspection is passed, an import quarantine certificate is submitted to the customs house. Import can proceed on confirmation of the certificate.
There are also import controls regarding dogs, monkeys, and aquatic animals, for example, carps and goldfish. The importation of pet monkeys is prohibited. Dogs and cats are subject to import regulations under the Rabies Prevention Act (Act No. 247 of 26 August 1950), and fish are subject to import regulations under the Act on the Protection of Marine Resources (Act No. 313 of 17 December 1951). Insects are subject to import restrictions under the Plant Protection Act (Act No. 151 of 4 May 1950).
There are no other licensing requirements and procedure. There are no other registration requirements. There is no unified list of allowed/prohibited or restricted species. For fish, see MAFF: Fisheries Safety Office, Livestock and Fisheries Safety Management Division: Aquatic animals and diseases subject to import quarantine (in Japanese). For insects, see Plant Protection Station: About importing live insects and microorganisms (in Japanese).
To export animals and animal products, Japan issues a certificate of export quarantine whenever this is required by the importing country.
Apart from the quarantine system, there is no special system for the import of genetic resources or breeding materials. Genetic resources and breeding materials fall under the above animal and animal products quarantine requirements.
These import/export controls and inspection standards are based on standards of international organisations such as the OIE.
There are specific standards and guidance based on the Act on the Prevention of Infectious Diseases in Livestock (Act No. 166 of 31 May 1951), which are issued by the MAFF and prefectural governments.
The vaccination of animals is allowed on receiving approval under the Act on Securing Quality, Efficacy, and Safety of Products Including Pharmaceuticals and Medical Devices (Act No. 145 of 10 August 1960).
The Act on Welfare and Management of Animals (Act No. 105 of 1 October 1973) applies to animal welfare and animal management. Animal killing and abuse are subject to criminal penalties. The Act does not distinguish farmed animals from other animals.
Effective on 1 June 2022, dog and cat breeders must install microchips in them, and pet shops and individual owners of microchipped dogs and cats must register with the Minister of the Environment.
The Pet Food Safety Act (Act No. 83 of 2008) contains national standards regarding pet food production methods, including a prohibition on producing non-conforming food or food containing harmful substances.
The Act on Nursing of Domesticated Animals (Act No. 50 of 2019) applies to businesses and qualifications related to domestic animal nursing.
26. Does the law of your jurisdiction allow for patentability of livestock genes on the grounds of isolating and purifying them? Is there legal protection for animal breeding know-how and a resulting animal nucleus?
It may be possible to patent genes on the grounds of isolating and purification. The general rules of patent law apply to the scope of protection. Genes and certain genetic sequences that include specific traits can be patented if they are industrially applicable and can be exploited by a person with ordinary skill in the art. They can be protected as a patent invention if the industrial applicability of the genes or genetic sequences is properly disclosed in the patent specification.
Patent protection is available for animal breeding know-how, and may also be provided for animals having unique characteristics originating from a resulting animal nucleus. This means that animals with unique characteristics bred in accordance with a patented breeding technique can also be protected by the patent. However, the patent holder cannot claim infringement just because the alleged infringer holds an animal with those characteristics. The patent holder must prove that the animal was actually bred in accordance with the patented breeding technique.
A patent application for this type of technology is publicly available, irrespective of the application's success.
Protection is also available as a trade secret. The Unfair Competition Prevention Act (Act No. 47 of 19 May 1993) defines trade secret as technical or business information that:
- Is managed with confidentiality and not publicly known.
- Is useful for business activities, for example, manufacturing methods and marketing methods.
The holder of a trade secret can seek an injunction and damages against a person breaching its confidentiality, just like a patent holder asserting patent infringement.
While there are no other intellectual property based protections available, the Act on Improvement and Increased Production of Livestock (Act No. 209 of 1950) provides for a system under which animals are registered with certain private organisations based on pedigree and controls the distribution of semen and fertilised eggs of livestock. The 2020 amendment to the Act prohibits the transfer of semen or fertilised eggs to others, with or without compensation, unless the semen or fertilised eggs are hygienically stored in a licensed livestock insemination facility.
In addition, the Act on Prevention of Unfair Competition Pertaining to Genetic Resources of Livestock (Act No. 22 of 24 April 2020) was enacted in April 2020 and subsequently came into effect. The Act allows requests for injunctions, damages, and credit recovery measures against parties that unfairly acquire, use, or transfer livestock genetic material. The Act also provides for criminal penalties.
27. Are there legal or practical restrictions on the introduction of new breeds/species, the breeding of certain animal species or certain breeding practices?
There are legal restrictions and conditions regarding:
- Breeding stock and sperm under the Act on Improvement and Increased Production of Livestock.
- Animal drug safety under the Act on Securing Quality, Efficacy, and Safety of Products Including Pharmaceuticals and Medical Devices (Act No. 145 of 10 August 1960).
- Feed safety and quality assurance under the Act on Safety Assurance and Quality Improvement of Feeds (Act No. 35 of 1953).
There have been partial successes in somatic cell-cloned animals, but this is not yet widely prevalent in Japan.
In addition:
- The Cartagena Act (see Question 22 and Question 23) has been applied to animals, including marine products, for example, inappropriate import and sale of certain unapproved aquarium fish.
- There is an animal import notification system for the implementation of quarantine measures, and checks at Japan customs for compliance with the law relating to animal imports (see Question 24).
Agricultural Safety and Product Liability
28. Summarise the system of food safety standard setting, the main regulator(s) and regulations. If industry input on the standards is possible, indicate how this is conducted.
The food standards for human safety are within the jurisdiction of the MHLW. Food standards are listed in the MHLW public notice titled Specifications and Standards for Food and Food Additives, under the Food Sanitation Act. The Food Sanitation Act prohibits the manufacture, sale, import, processing, use, preparation, and storing of food products that do not meet the applicable standards (if any). On preparing these standards, the MHLW Minister considers the opinions of the FSC and input from the public through the public consultation procedures.
Japan joined the Codex Alimentarius in 1966 and participates in the formulation of international standards. However, some Japanese standards are stricter or more relaxed than the Codex standards, depending on the circumstances.
Under the 2018 reform of the Food Sanitation Act, from June 2021, food business operators need to prepare and comply with a food safety plan implementing the standards for hygiene control of food products based on either:
- The Hazard Analysis and Critical Control Points (HACCP) set by the MHLW Minister.
- The standards for hygiene control of food products incorporating the HACCP concept set by the trade associations. Businesses with a low food safety risk are exempt. These are businesses that:
- import food or additives;
- provide storage or transportation of food or additives (except for freezing or refrigerating of food);
- sell packaged food that is not likely to cause food sanitation hazards due to spoilage, deterioration, or other quality degradation even if stored at ordinary temperature for a long time; and
- import or sell containers and packaging.
In addition, under this Act, from June 2021, the import for sale purposes of specific food products and food additives designated by MHLW ordinance (including meat and poultry) is prohibited, unless these products and additives are subject to hygiene controls based on the HACCP.
29. Set out the legal requirements to establish the liability of producers and suppliers for defective or contaminated food ingredients that cause damage, in relation to tort and product liability.
Tort
To claim compensation under tort law, a claimant must prove the following:
- Their rights or legally protected interests have been harmed by the injuring party.
- Intent or negligence.
- Damage.
- Causal relationship between intent or negligence and the damage.
There is no legal distinction based on whether the injuring party is the producer or supplier.
In relation to the production and supply of food products that require absolute safety, the courts may recognise a presumption of negligence on the part of the manufacturer where there is a defect in the product and a health-related injury to consumers as a result of the product.
Product Liability
To claim compensation under the Product Liability Act (Act No. 85 of 1 July 1994), the claimant must prove the following:
- The injuring party is a manufacturer, as defined below.
- Defect in the product manufactured and delivered by the injuring party.
- Damage.
- Causal relationship between the defect and the damage.
The injured party need not be a consumer.
A manufacturer means:
- A manufacturer.
- An importer.
- A labelling manufacturer. A labelling manufacturer is an individual or legal entity that affixes its name on the product as the manufacturer or who otherwise affixes its name on the product in a way that misleads others into believing that it is the manufacturer.
- A substantial manufacturer. A substantial manufacturer is an individual or legal entity that participates significantly to the planning, development, manufacture, and sale of the product.
A product means a movable item that is manufactured or processed. In principle, primary product production does not fall within the definition. Accordingly, in principle, the Product Liability Act does not apply to unprocessed agricultural products (although tort law will apply if the requirements for tort liability are met).
However, GM seed manufacturers and importers may be deemed manufacturers if a defective seed, or defect in a product produced with such seed, causes injury.
A processed agricultural product is considered a product. Seasoning, heating, grinding, and juice extraction qualify as processing, but picking, cold storage, cutting, and natural seasoning do not.
A defect is a failure to provide the safety that the product should ordinarily provide, including manufacturing defects, design defects, and failure to warn. Liability under the Product Liability Act is strict.
30. Which defences are available to the producer and/or supplier to avoid liability? For instance, is market-entry prior government approval a legal defence against product liability and under which conditions?
31. Which types of damage are generally compensated by civil courts in food safety liability cases? For instance loss of value, reparation costs, loss of revenue, and personal injury. Are punitive damages available?
Tort
Damages include:
- Direct damages, for example, medical costs, funerary costs, and physical injury.
- Indirect damages, for example, lost profits, damages due to work suspension, and third-party damages that have a causal relationship with the underlying tort.
Damages ordinarily arising out of the tortious act are recoverable. Damages arising due to special circumstances are only recoverable if these circumstances were foreseeable at the time of the tortious act. Damages can be reduced based on actions of the injured party. Punitive damages are not available.
Contributor Profiles
Takashi Hirano
Blakemore & Mitsuki
T +81 3 3503 5571
F +81 3 3503 5577
E [email protected]
W www.blakemore.gr.jp
Professional qualifications. Japan, Lawyer, 1985
Non-professional qualifications. LLB, Chuo University, 1980; Diploma, Legal Training and Research Institute of the Supreme Court of Japan, 1985
Languages. Japanese, English
Professional associations/memberships. Daini Tokyo Bar Association; Professor, Cyber University (2012-Present); Director of the Computer Software Association Japan (2006-2020.); Councilman of Software Information Center (2006-Present); Ministry of Trade, Economy and Industry, Head of Working Group regarding contract and business practices for secured information systems (2007); Ministry of Trade, Economy and Industry, Chairperson of the Steering Committee of Consortium for highly developed business practices for information systems and software (2008); Ministry of Internal Affairs and Communication, Member of the study group for activation of data counters in crowd computing era (2009); Managing Director of Japan Life Style Counselors' Association (2009-2012), Director of Japan Life Style Counselors' Association (2012-2018); Director of International Foundation of Information (2011-2013); Ministry of Trade, Economy and Industry, Chairman of Committee regarding contract and business practices for secured information systems (2020)Statutory Auditor of Morpho Inc, (2008-Present); Member of the Copyright Law Association of Japan, Intellectual Law Association of Japan, and Anti-trust Law Association of Japan.
Taketo Nasu
Blakemore & Mitsuki
T +81 3 3503 5571
F +81 3 3503 5577
E [email protected]
W www.blakemore.gr.jp
Professional qualifications. Japan, Lawyer, 1996; New York, Lawyer, 2001
Areas of practice. Intellectual property law; corporate law.
Non-professional qualifications. LLB, Sophia University, 1991; Diploma, Legal Training and Research Institute of the Supreme Court of Japan, 1996; LLM, University of Texas School of Law, 2000
Languages. Japanese, English
Professional associations/memberships. Lecturer, Japan Patent Attorneys Association (2005-2012); Visiting Lecturer, Toin University of Yokohama Law School, Yokohama, Japan (2006-2014); Instructor (in charge of advocacy of civil cases), Legal Training and Research Institute of the Supreme Court of Japan (2014-2017); Daiichi Tokyo Bar Association; New York State Bar Association; American Bar Association; Japan Association of Industrial Property Law; Copyright Law Association of Japan.