The Liberal Democratic Party is studying issues related to easing a de facto ban on donations to political parties by firms with a high percentage of foreign ownership, LDP lawmakers said Tuesday.
An LDP reform panel is sorting out the issue regarding the ban, which is aimed at preventing foreign interests from influencing parties and policymaking.
The Political Funds Control Law currently bans political donations by foreigners, foreign companies and "entities in which they are core constituent members."
In the case of companies, the prohibition applies to firms owned more than 50 percent by foreigners or foreign firms in terms of outstanding shares, according to an Internal Affairs and Communications Ministry interpretation of the clause.
But with the increasing presence of overseas investors in Japanese companies, some major firms, including Canon Inc., whose president, Fujio Mitarai, is to become head of the powerful Japan Business Federation (Nippon Keidanren) in May, are prohibited from making political contributions.
The LDP therefore considers it necessary to ease the restrictions in order to secure donation sources.
Specifically, LDP lawmakers are considering raising the ratio of foreign ownership subject to the ban from the current 50 percent and removing the prohibition for companies that are based in Japan or have a set percentage of Japanese executives on their boards.
Other ideas include establishment of a disinterested third-party entity to check companies in advance to see if they can be allowed to make political contributions.
The LDP hopes to submit a bill to this end to the current Diet session, with an eye to easing the ban during fiscal 2006 to March 31, 2007.