Why Is There Such Talk of an "Anti-Espionage Law" Right Now? What Business Professionals Need to Know
This is Hamamoto from TIMEWELL.
Recently, I have been seeing the term "anti-espionage law" more frequently in the news. Honestly, my initial reaction was something like "that's a topic for spy films." But the more I researched it, the more I came to realize that for someone running a business in the tech industry, this is a very immediate concern.
Advanced technology that Japan has spent years developing is leaking overseas without anyone noticing. And the channel for that leakage is not cyberattacks like hacking — it is primarily through people. This is not a story about damage to a single company; it is about the country's competitive power being steadily eroded.
The government and ruling coalition have started taking this seriously. At the same time, voices have been raised questioning whether legislation might constrain our freedoms and rights. In an era where accepting foreign nationals and conducting international collaborative research is the norm, how do we strike the right balance? In this article, I want to lay out these issues as clearly as possible, in terms accessible to those new to the subject.
Japan, Long Called a Spy Paradise
Japan has no law that directly criminalizes espionage activity itself. This is a fairly unusual situation among developed nations. Foreign intelligence officials have long dismissed Japan as a "spy paradise."
So what happens when espionage is discovered? Under the current law, individual statutes such as the theft law and the Unfair Competition Prevention Act have to be applied. But these laws were not originally designed with interstate information warfare in mind, so they have not kept pace with the increasingly sophisticated reality of espionage. For example, the act of simply conveying technical information verbally is difficult to classify as either physical theft or unauthorized access. Methods that slip through the gaps in the law are widespread.
As a side note: in January 2026, a former Russian employee of a machine tool manufacturer was sent to prosecutors on suspicion of leaking product development ideas verbally. The very act of building a case around verbal information disclosure is extremely difficult, and this incident is emblematic of the limits of the current law.
The United States, the United Kingdom, Germany, France, South Korea, Australia, and other major developed nations all have laws that directly penalize espionage. Japan alone carries this legal gap in this domain. When I learned that, I was frankly surprised. With security debates now intensifying, the need to fill this gap feels increasingly urgent.
A 40-Year-Old Homework Assignment That Is Finally Moving
The debate over an anti-espionage law is not new.
In 1985, the Liberal Democratic Party submitted to the Diet a bill called the "Act on the Prevention of Espionage Activities Related to State Secrets." The content was extremely strict, with the death penalty as the maximum sentence for leaking secrets related to defense or diplomacy. Predictably, public opinion and the opposition parties pushed back hard. The bill was scrapped after criticism that the scope of "state secrets" was ambiguous and could be expanded indefinitely at the government's discretion [1].
Then in 2013, the Act on the Protection of Specially Designated Secrets was enacted. This law designates information related to defense, diplomacy, terrorism, and similar matters as specially designated secrets and strengthens penalties for leaking them. However, it only punishes the leaking of secrets — it is not a law that comprehensively regulates espionage activity itself. The gap remained.
And now, in 2026. Under Prime Minister Sanae Takaichi, the government and ruling coalition made a significant shift back toward enacting an anti-espionage law. With the LDP's landslide victory in the lower house elections in February of that year as a tailwind, the plan is to establish an expert panel in the summer and submit a bill to the extraordinary Diet session in autumn or later [2]. The coalition partner, Nippon Ishin no Kai, has also signaled a positive stance, and a 40-year-old piece of homework is finally getting started.
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Technology Leaks Happen Through People
Why is legislation being pursued with such urgency now? The backdrop is the serious reality that Japan's advanced technology continues to leak overseas through human channels.
In the past, the typical industrial spy involved unauthorized server access or the physical removal of blueprints. That is no longer the case. What has become the mainstream is foreign governments and companies accessing information held by Japanese corporations and universities through personnel — researchers, engineers, international students — and bringing it back to their home country.
Here is a summary of representative recent incidents:
| Incident | Year | What Happened |
|---|---|---|
| AIST incident | 2023 | A Chinese principal researcher emailed advanced fluorine compound technical data to a Chinese company. It was also discovered that during his employment he held concurrent positions as a professor at a Chinese university and as an officer at a Chinese company [3]. |
| Denso incident | 2007 | A Chinese engineer illegally downloaded and removed over 100,000 files of automotive product blueprint data before resigning [4]. |
| Fujiseiko incident | 2019 | A Chinese employee copied trade secrets including blueprints used in automobile manufacturing for the purpose of obtaining illegal profit. |
These are only the cases that became public. Including cases where police could not file charges, and cases where companies chose not to disclose incidents to protect their reputation, the actual situation is almost certainly far more serious.
Of particular note is the intelligence-gathering strategy known as "a thousand grains of sand." Ken McCallum, director general of the UK's MI5, has pointed out that China no longer primarily uses operatives disguised as diplomats — instead, China collects information piece by piece through diverse channels including businesspeople, researchers, and international students [5]. Even if the information any individual person takes out is fragmentary, when it accumulates it can reconstitute an entire technology from scratch. It is a method of building a mountain by collecting grains of sand one at a time.
When I first learned about this, I found it genuinely frightening. As someone working in the tech industry, the risk of technology we developed leaking out without our knowledge is not someone else's problem.
According to a survey by U.S. think tank CSIS, approximately 41% of Chinese espionage activity involves civilian participants. In other words, being on guard only against professional spies is meaningless. Technology leak risk is embedded within the ordinary flow of human interaction. Japanese universities and research institutions host many foreign researchers each year, and the vast majority are people genuinely pursuing their field — but the acts of a small minority with malicious intent create a structure that damages the trust of the whole. This is an unfortunate situation both for those receiving them and for the researchers who come to Japan in good faith.
What Are the Pillars of the Proposed Legislation?
The full details of the bill have not yet been made public, but several pillars are visible from the government and ruling coalition's statements and press coverage.
Foreign Agent Registration System
The most closely watched element is the introduction of a foreign agent registration system. Modeled on the U.S. Foreign Agents Registration Act — FARA — it would require individuals and organizations engaged in lobbying activities or intelligence collection within Japan as agents of foreign governments to report their activities and funding sources to the government [6].
The key point lies in the concept of making espionage activities visible rather than prohibiting them. By making transparent who is acting on behalf of which country and what they are doing, it serves as a deterrent to opaque foreign influence operations. I view this as a practical approach that protects freedom of speech while also ensuring national security.
Coordination with the Security Clearance System
With the Act on the Protection and Use of Specially Designated Important Economic Security Information, which took effect in May 2025, Japan has introduced a security clearance system. The government conducts background checks and certifies individuals who can access information related to national security [7].
The new anti-espionage law is being considered in a direction that would further strengthen this system. The aim is to reduce the risk of information leaks from within by expanding the scope of covered information and tightening the evaluation criteria.
The security clearance system is, incidentally, already standard in allied nations such as the United States and the United Kingdom. For Japan to draw closer to the Five Eyes — the intelligence-sharing framework of the five nations: the U.S., UK, Australia, Canada, and New Zealand — strengthening this system is unavoidable. Sharing classified information with allied nations requires as a prerequisite a foundation of trust that "this country is safe to entrust information to."
How to Strike the Balance with Civil Liberties
This is personally the point I find most thought-provoking.
There is a persistent concern that an anti-espionage law could lead to human rights violations. That was precisely why the 1985 bill was scrapped. For this legislation as well, at least two points require careful deliberation.
The first is the issue of background checks on foreign nationals. If the security clearance system is strengthened, background investigations of foreign researchers and engineers could also become more intensive. There is no question that this is a necessary measure from a national security risk management perspective. However, it must not develop into discriminatory treatment based on nationality or ethnicity.
My view is that background checks need to be conducted thoroughly at a level that does not infringe on human rights. Concretely: making the investigation standards explicit, ensuring procedural transparency, and putting in place a mechanism for appeals against investigation outcomes. Without this kind of institutional design, there is a risk that talented foreign researchers will come to avoid Japan, ultimately leading to the self-defeating outcome of a decline in Japan's science and technology capability.
That technology critical to science and technology leaks overseas through people is something that past incidents have repeatedly demonstrated as real. That is precisely why a check is necessary. But the method of applying that check must not undermine Japan's open research environment or international trust. Striking this balance is, I believe, the greatest challenge in designing the legislation.
The second is the impact on freedom of expression and freedom of the press. If the scope of state secrets can expand indefinitely at the government's discretion, there is a risk that reporting and whistleblowing on information inconvenient to the government could be chilled. Human Rights Watch has also pointed out that explicit provisions to protect those who gather information in the public interest — such as journalists and activists — are necessary [8]. Safeguards to protect the public's right to know must be built into the legislation without fail.
The "Defensive Practice" Required of Companies
The debate over an anti-espionage law does not stop at the Diet. If legislation advances, it will certainly affect corporate practice as well.
In particular, for companies handling advanced technology and companies with overseas transactions, the following three areas are ones where action should be taken now.
Background Checks on Counterparties and Joint Research Partners
With the strengthening of the security clearance system, confirming the identity of counterparties and joint research partners will become increasingly important. Does the other party have ties to foreign governments or military-related organizations? Have they ever appeared on a sanctions list in the past? The parts of due diligence that were previously handled with "we have a trust relationship, so it's fine" now require a data-driven verification framework.
In particular, when accepting foreign researchers or entering into technology partnerships with foreign companies, confirming the other party's home institution and funding sources is becoming the baseline for risk management.
Addressing Export Control and Military Diversion Risk
The risk that Japan's advanced technology will be taken abroad is not limited to espionage. Even in ordinary export transactions, there is the possibility that goods or technology will ultimately be diverted for military use. This is what Japan's catch-all controls under FEFTA address.
Could your company's products or technology be used in the development of weapons of mass destruction? Is the counterparty a military end-user in a country of concern? Neglecting to verify this creates the risk of unintentionally being found in violation of FEFTA. If an anti-espionage law raises the required standard of security management, the level of rigor expected in export control will naturally rise as well.
Leveraging AI for Screening
The background check and export control verification work described above requires enormous time and cost to perform manually. The databases that need to be cross-referenced — the Foreign User List, the SDN List, EAR regulated entity lists — are dispersed across multiple sources, and manual omissions are unavoidable.
The export control AI agent TRAFEED (formerly ZEROCK ExCHECK) that we at TIMEWELL have developed was created to solve these challenges. Input a counterparty's name and location and it automatically cross-references against multiple sanctions and regulatory lists, returning a risk assessment and its basis within seconds.
The trend toward strengthened corporate management responsibility as anti-espionage legislation advances is now unavoidable. Rather than scrambling after a law is enacted, building an efficient AI-powered management framework now is what will ultimately protect companies. That is how I see it.
In Closing
The debate over an anti-espionage law is both a matter at the very foundation of national security and a topic that directly connects to our freedoms and the way we do business. It may look specialized and difficult, but at its core it comes down to the question of "what kind of society do we choose?"
Without security, free economic activity cannot be sustained. But a society that surrenders its freedoms in the pursuit of security is not the future any of us wants.
The debates that will soon begin in earnest in the Diet — I want to watch them not as someone else's business, but as choices that determine our own future. And to think about and act on what each of us can do from our own position. As someone running a business in the tech industry, I intend to face this issue squarely.
I hope this article serves as a starting point for thinking about the anti-espionage law debate.
References
- [1] Tokyo Shimbun, "What Would Happen to Japan If an Anti-Espionage Law Were Enacted? It Was Scrapped 40 Years Ago, But..." May 24, 2025 https://www.tokyo-np.co.jp/article/406885
- [2] Nikkei, "Anti-Espionage Law: Expert Panel May Be Established as Early as Summer, with Foreign Agent Registration System in Mind," February 17, 2026 https://www.nikkei.com/article/DGXZQOUA170PF0X10C26A2000000/
- [3] Japan Counter-Intelligence Association, "The Reality of China's Illegal Technology Theft," November 1, 2023 https://www.japancia.com/post/column2
- [4] Diamond Online, "This Is How Denso's Top Secrets Fell into Chinese Hands," September 11, 2024 https://diamond.jp/articles/-/349910
- [5] CSIS, "Survey of Chinese Espionage in the United States Since 2000," 2023 https://www.csis.org/programs/technology-and-intelligence-task-force/survey-chinese-espionage-united-states-2000
- [6] Sankei Shimbun, "What Is the Foreign Agent Registration Act That Makes Visible Foreign Influence and Propaganda Operations?," Michiro Esaki, November 23, 2025 https://www.sankei.com/article/20251123-26P332LKKZAARKGPLHZUQQZGKI/
- [7] Business Lawyers, "An Overview of the Security Clearance System and the Act on the Protection and Use of Specially Designated Important Economic Security Information," December 26, 2025 https://www.businesslawyers.jp/articles/1402
- [8] Human Rights Watch, "New Japanese Espionage Law Would Need to Respect Rights," December 9, 2025 https://www.hrw.org/ja/news/2025/12/09/new-japanese-espionage-law-would-need-to-respect-rights
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