Bloomberg: Japan boosts investment oversight over espionage fears

Japan is establishing its own version of the U.S. Committee on Foreign Investment (CFIUS) to strengthen oversight of foreign investment amid growing economic security concerns, Bloomberg reports.

The report says the new body is expected to begin operations on June 29.

Prime Minister Sanae Takaichi is seeking tighter controls in response to vulnerabilities across several strategic sectors.

According to Bloomberg, Japan has faced a series of security incidents in recent years, including Chinese spies allegedly stealing industrial secrets during business meetings, smugglers using Japan to transit advanced Nvidia AI chips, and criminal networks trafficking fentanyl through the country.

The new commission will coordinate reviews of foreign investments across government ministries to assess potential national security risks.

This marks a departure from the current system, under which investment reviews are handled primarily by the Finance Ministry with support from relevant sector-specific ministries.

The body is being established under recent amendments to Japan's Foreign Exchange and Foreign Trade Act. The revised legislation expands pre-screening requirements to include indirect ownership structures and grants authorities broader powers to scrutinise investments by high-risk entities, such as foreign governments and state-owned enterprises.

The new rules will also allow authorities to review acquisitions in sectors that were previously not considered sensitive or critical to national security.

By Bakhtiyar Abbasov