Japan’s new Land Use Regulation Act, (Act No. 84 of 2021), aimed at preventing foreign entities from using lands that could pose a security threat, becomes fully enforceable this September.
The government has formulated a basic policy that identifies the categories of lands and conditions for applying the law. In addition to “vigilance areas” and facilities targeted under the act such as nuclear power plants and other nuclear-related infrastructure, it identifies “threatening acts” that could interfere with the functioning of critical facilities.
Behaviors treated as threatening include, for example, irradiating with laser beams and emitting radio waves that could interfere with the functioning of critical facilities.
The basic policy serves as an operational guideline for the new land use law enacted in June 2021.
How It Works
The government can use the real estate register and the Basic Resident Register to check the nationality, name, addresses and usage status of owners of land and buildings located in vigilance areas. Furthermore, prior notification to the authorities is required when the sale or purchase of land or buildings is within a government designated special vigilance area, including confirming the name, address and nationality of the parties, purpose of use, etc. The law is then applied to land buildings 200 square meters or more and in close proximity to essential facilities.
Properties such as Self-Defense Forces (SDF) bases, Coast Guard facilities, and remote border islands are spelled out as vigilance areas. But the basic policy designates nuclear power plants and airports adjacent to and used by the SDF as well. If the government investigation finds activities that obstruct or interfere with the functioning of an essential facility, it will issue a recommendation or order to cease. Criminal penalties can be applied if a property owner fails to comply with an order.
What Are Obstructions
Although the regulatory act did not list what constitutes an obstruction, the basic policy identifies several, such as:
- building structures that interfere with the takeoff and landing of SDF aircraft and radar operations;
- laser beams or emitting radio waves that interfere with the functioning of the facility;
- accumulating sediment that can lead to impeded use of the facility due to runoff.
On the other hand, it also specifies actions that are exempt:
- living in a residence with a view of the facility grounds;
- installing a warehouse or other facility of similar height to a residence, and
- holding gatherings on private property around the facility.
The Cabinet Office approved the basic policy at its July meeting. Additional details related to full enforcement of the new land use law are expected from the Cabinet when the law goes into full effect at the end of September. Over the next 2 to 3 years, the government will proceed with zoning and surveys of areas around the 600 to 700 important facilities identified so far.
No Violation of Trade Rules
As land acquisition by foreign capital including China continues, the government is finally preparing to deal with security threats through full enforcement of the new land use law. However, the statute does not address the regulation of land sales and purchases. Other developed countries have stopped foreign real estate acquisitions, and in Japan more effort is needed.
The acquisition of land by foreign capital has long been an issue. For example, concerns have been raised in Hokkaido, where Chinese capital has been behind the acquisition of land near the New Chitose Airport, where the Japan Air Self-Defense Force also operates. Other areas of concern have included sales of large-scale areas in mountain forests with water resources.
In another case, South Korean capital was found to be behind the purchase of land adjacent to the Maritime SDF base in Tsushima, Nagasaki Prefecture.
The regulatory law is expected to address such concerns, but its effectiveness is questionable.
When the law was debated, lawmakers in the opposition parties, the Liberal Democratic Party and Komeito Party, all voiced concerns that it could restrict private rights and slow down economic activity. As a result, the law will only limit the “use” of the land but not restrict its actual ownership.
This is why the government has taken the trouble to list in this basic policy the acts that do not fall under the category of “obstructive” to be regulated.
How It Compares
The purchase of real estate near military installations by foreign capital in the United States is subject to review, and the president is given the authority to suspend any transaction of concern. In South Korea and Australia, the acquisition of real estate property by foreigners in the vicinity of military facilities is also subject to requirements of prior permission and notification.
The security environment surrounding Japan, including the situation in Taiwan, is becoming increasingly sensitive. Moreover, there are fears that the yen’s current depreciation will increase the appetite of foreign investors to acquire more real estate in Japan.
A government official said, “This law is a first step to promote understanding of the need to protect the territory of the nation.” However, there is an urgent need for more effective measures, including tightening regulations.
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(Read this article in Japanese at this link.)
Author: Daisuke Nagai