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To address long-running calls for tighter regulations and closer monitoring in cases where foreign firms buy land near Self-Defense Force bases, the Cabinet on Friday approved a bill that would create tougher regulations for such transactions in the hope of alleviating national security concerns.

But the bill, which includes a requirement that prior notification be sent to the government for certain real estate purchases, has also raised concerns about the violation of privacy rights. An intense debate over the bill’s provisions and constitutionality is likely, as the main opposition parties have vowed to oppose it, while many details about how it would operate in practice remain unclear.

“The bill identifies zones from the viewpoint of national security necessity and based on the special characteristics of the Self-Defense Forces and Japan Coast Guard (JCG) facilities, critical infrastructure facilities, border islands and the situation in areas they are located,” said Chief Cabinet Secretary Katsunobu Kato on Friday.

“The bill’s framework means land usage can be investigated and, if necessary, regulations can be imposed.”

At present, Japan has no laws that either ban or control the purchase of land by foreign nationals who live in the country, regardless of their visa status. Foreign individuals and entities located outside of Japan also have the right to purchase property.

The lack of restrictions on foreign-owned property close to military bases, nuclear power plants and other sensitive facilities, such as water supply plants deemed critical national infrastructure, had long been a subject of controversy among those who worried about the potential for espionage or the sabotage of facilities by foreign agents.

Over the years, U.S. officials have expressed concern about the possibility of facilities beside U.S. bases being used for those purposes. Other countries, including the United States and Australia, have created their own laws, rules and regulations to help protect military and critical infrastructure facilities.

The proposed legislation would bring Japan more in line with the kinds of domestic regulations its allies have in place. It follows an Australian law that took effect in January that allows the government to halt new and previously signed agreements between foreign entities and Australia’s eight states and territories.

The move came after a controversial lease of a strategic port in Darwin, used by the U.S. military, to a Chinese company by the Northern Territory government in 2015.

A signboard shows that land was sold to a Chinese owner in Hokkaido in 2011. | MASARU ONODERA / VIA KYODO
A signboard shows that land was sold to a Chinese owner in Hokkaido in 2011. | MASARU ONODERA / VIA KYODO

In Japan, increased regional tensions between Tokyo and its East Asian neighbors has created worries over the national security implications of property on remote islands being bought by foreign individuals or entities. Though Japan is commonly thought of as the four main islands of Hokkaido, Honshu, Shikoku and Kyushu as well as Okinawa, the entire nation actually consists of 6,852 islands, of which only 416 are inhabited.

Foreign purchases of land in Japan have previously raised national security questions. Controversy erupted on the island of Tsushima in 2007 when a South Korean firm bought a resort facility adjacent to a Maritime Self-Defense Force base.

More recently, concerns have been raised about Chinese investors buying land near SDF bases in Hokkaido. In March 2018, 52 hectares of land near the Air Self-Defense Force’s Chitose base and New Chitose Airport were purchased by Chinese internet shopping giant Alibaba for a list price of about ¥4.9 billion. Other transactions took place in the city of Takikawa, where a forested area overlooking a Ground Self-Defense Force base was sold to a Chinese firm for development. In Kutchan, the town next to the popular Niseko ski resort, a Chinese firm snapped up 100 hectares next to another GSDF base.

Faced with such worries and calls within the ruling parties to consider restrictions, the government established an expert panel in November to discuss the national security implications of foreign land purchases. Their report, submitted in December, recommended specific new legislation to tackle problems stemming from the acquisition and use of Japanese real estate by foreign entities.

In particular, the panel noted that remote islands and any land near SDF and U.S. military bases, as well as property near essential infrastructure facilities such as nuclear power plants and water sources, were vital to national security interests and should get top priority for new regulations on foreign land purchases.

Based on the panel’s recommendations, a Liberal Democratic Party-supported bill was drawn up. It called for a buffer zone around SDF bases, coast guard stations, U.S. military bases, outlying islands and other facilities deemed important to the nation’s infrastructure, to be designated as either a monitored or specially monitored district.

The bill aims to protect the facility from “function-obstructing acts,” such as radio interference, by investigating the land and buildings around the facility. The government has designated “monitoring zones” of about a 1 km radius around remote islands, both inhabited and uninhabited, important SDF, U.S. military, and JCG facilities and nuclear power plants. Information, including the name, address, nationality and actual status of usage of the land and buildings can be collected from the real estate registry. If the use of such land is found to clearly impede the function of those facilities, the government can order the suspension of their use and levy a fine if the order is ignored.

In addition, other highly important areas, such as SDF command centers, the areas around U.S. military facilities and remote uninhabited islands near national borders, are to be designated as “special monitoring zones.” In the case of land transactions, sellers and buyers in these zones will be required to notify the government in advance of any real estate transactions, buyers and sellers in the zones will be subject to government restrictions.

The Cabinet approved a bill Friday that will, if it passes through the Diet, create tougher regulations on sales to foreign nationals of land close to sensitive facilities. | KYODO
The Cabinet approved a bill Friday that will, if it passes through the Diet, create tougher regulations on sales to foreign nationals of land close to sensitive facilities. | KYODO

For real estate within designated zones, the government would have the right to investigate a current land owner’s name, address, nationality and how the property or facilities were being used. Potential new owners of land or facilities in a specially monitored district would be required to provide the government with the same information before a sale. Those who fail to comply with the new requirements would be imprisoned or fined.

But the prior notification requirement has created legal, even constitutional concerns. LDP coalition partner Komeito took a cautious stance on the LDP draft, worried it could lead to excessive restrictions on private rights and economic activity, hindering freedom to buy and sell real estate.

The two parties came to a general agreement on the bill’s language earlier this week. While the obligation for prior notice of land purchases remains, they agreed to reduce the number of areas to be designated as special monitoring zones. The 1 km radius requirement has also been kept. But in principle, urban areas are to be excluded from the special monitoring zones.

In the event urban-based SDF or U.S. military command centers are located close to where land and facilities are being bought and sold, prior notification is to be limited to cases where such notification is determined to be reasonable or judged by the government to be unavoidable, though what that means was not spelled out. The government also promises to protect the private information of buyers and sellers.

However, the actual designation of special monitoring zones will only be carried out after the current bill is passed. The bill’s language does not fully explain what the standards will be for designating such zones.

Main opposition parties, the Constitutional Democratic Party of Japan (CDP) and the Japanese Communist Party, have already expressed opposition to the bill and have vowed to fight it.

“As this involves private rights, we have to treat it seriously, and we can’t agree to it all,” the CDP’s Diet affairs chief Jun Azumi said Wednesday after the LDP and Komeito reached their agreement.

Article 29 of the Constitution states that the right to own or hold property is inviolable and thus, the right to own land and freely use it is a basic right. The government panel argued in the December report, however, that such property rights are to be defined by law but in conformity with public welfare. Therefore, the panel concluded, new legislative measures like prior notification for the government to manage land can be done in line with the goals of the Constitution.

“Assessing the actual state of land ownership and use, and managing it appropriately where necessary, could contribute to public welfare through ensuring the safety and security of the public,” the report said.

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