On March 12 2019, the Japan Fair Trade Commission (JFTC)
announced that it would establish guidelines and rules under
Article 76 of the Anti-monopoly Act (AMA) in relation to the
treatment of confidential communication between an enterprise
and its attorneys. The purpose of establishing a
'privilege-style system' is to make the revised leniency
programme effective and ensure the appropriateness of
administrative investigation procedures.
The privilege-style system would apply to documents that
contained confidential communications between an enterprise and
an attorney regarding legal advice concerning the issue of the
unreasonable restraint of trade (cartels, bid-rigging, and so
on) in administrative investigation procedures by the JFTC. The
privilege-style system does not apply in the context of any
other relevant legislation, such as the Code of Civil Procedure
or the Code of Criminal Procedure.
General requirements for protection under the
privilege-style system are set forth below with further
detailed rules to be announced in due course:
- The enterprise must request protection
under the privilege-style system at the time the JFTC issues
an order for document submission.
- Documents to which protection under the
privilege-style system is sought must be properly stored,
including with respect to the title of the document, place of
storage, and maintenance of confidentiality.
- The enterprise must submit a document list
within a specified period of time. The list should include
the date and time each document was prepared, the name of the
person who prepared the document, a summary and so on, for
each document for which privilege-style treatment is
- If documents that do not satisfy the
requirements are included, the enterprise must submit a copy
of such document or report its contents to the JFTC.
- Documents for which protection is sought
must not have illegal purposes.
In order to avoid decreasing the incentive to cooperate with
the JFTC's investigations, the use or non-use of this system
will not be taken into account when evaluating the relevant
enterprise's level of cooperation with a JFTC
With regard to the procedure for determining whether
privilege-style protection will be granted, a screening officer
of the secretariat of the JFTC (which is different from the
Investigation Bureau of the JFTC) will review the documents and
determine whether they satisfy the above requirements.
For enterprises doing business in Japan that are exposed to
a globalising and complex business environment, privilege-style
protection is essential for obtaining legal services based on
unrestricted information. However, the government has thus far
refused to introduce privilege-style protection generally out
of concern that it could limit the broad investigative powers
of the Japanese regulators or adversely affect the Japanese
regulatory environment. The privilege-style system discussed
here has been designed in a limited manner so that it would not
affect the laws or other regulations in Japan. The introduction
of this system is an important step forward despite its limited
scope, as it could be a touchstone of attorney-client privilege
in Japan. The implementation and operation of the system should
be carefully monitored.