Corporate
Investigations 2021
A practical cross-border insight into corporate investigations

Fifth Edition

Featuring contributions from:

Anagnostopoulos

Kellerhals Carrard

Poul Schmith

Bloomfield Law PracticeKingsley Napley LLP

Rahman Ravelli

Boies Schiller Flexner LLP

LydianRui Bai Law Firm

De Roos & Pen

Sołtysiński Kawecki & Szlęzak

Debevoise & Plimpton LLPMorais Leitão, Galvão Teles,
Soares da Silva & Associados

Dechert LLP

Morgan, Lewis & Bockius LLP

Wikborg Rein

Gilbert + Tobin

Norton Rose Fulbright LLP

Iwata Godo

Nyman Gibson MiralisŠunjkaLaw

Table of Contents

Expert Chapters
1

Cross-Border Investigations: Navigating International Requirements
Tim Bowden, Roger A. Burlingame, Noel Power & Dae Ho Lee, Dechert LLP

8Bribery and Corruption: Investigations and Negotiations Across Jurisdictions
Aziz Rahman & Joshua Ray, Rahman Ravelli

17

Corporate Cooperation: Benefits and Challenges
Lauren Bell & John Kucera, Boies Schiller Flexner LLP

22Asia Pacific Overview
Phillip Gibson, Dennis Miralis & Rachel Le Bransky, Nyman Gibson Miralis

Q&A Chapters
28

Australia
Gilbert + Tobin: Elizabeth Avery & Richard Harris

37

Belgium
Lydian: Jan Hofkens & Yves Lenders

44

China
Rui Bai Law Firm: Wen Qin & Juliette Zhu

49

56

64

70

75

Denmark
Poul Schmith: Jens Teilberg Søndergaard &Martin Sønnersgaard
England & Wales
Kingsley Napley LLP: Alun Milford, Caroline Day,Áine Kervick & Philip Salvesen
FranceNorton Rose Fulbright LLP: Christian Dargham &Caroline Saint Olive
Germany
Debevoise & Plimpton LLP: Dr. Thomas Schürrle &Dr. Friedrich Popp
GreeceAnagnostopoulos: Ilias G. Anagnostopoulos &Padelis V. Bratis

80

Japan
Iwata Godo: Akira Matsuda & Minako Ikeda

87

Netherlands
De Roos & Pen: Niels van der Laan & Jantien Dekkers

93

Nigeria
Bloomfield Law Practice: Adekunle Obebe &Solomon Oshinubi

98

NorwayWikborg Rein: Elisabeth Roscher & Geir Sviggum

105

PolandSołtysiński Kawecki & Szlęzak: Tomasz Konopka

111

117
124

132

139

PortugalMorais Leitão, Galvão Teles, Soares da Silva &Associados: Tiago Félix da Costa, João Matos Viana& Frederico Machado Simões
SerbiaŠunjkaLaw: Tomislav Šunjka
Switzerland
Kellerhals Carrard: Dr. Claudia Götz Staehelin,
Dr. Florian Baumann, Dr. Omar Abo Youssef &Marlen Schultze
United Arab Emirates
Morgan, Lewis & Bockius LLP: Rebecca Kelly &Chris Warren-Smith
USA
Dechert LLP: Jeffrey A. Brown & Roger A. Burlingame

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Chapter 13

Japan

Japan
Akira Matsuda

Iwata Godo

12 The Decision to Conduct an Internal
Investigation
1.1 What statutory or regulatory obligations should
an entity consider when deciding whether to conduct aninternal investigation in your jurisdiction? Are there any
consequences for failing to comply with these statutory
or regulatory regulations? Are there any regulatory or
legal benefits for conducting an investigation?

There are no specific statutory or regulatory obligations to
conduct an internal investigation under Japanese law even when
there is suspicion of wrongdoing, except for certain consumer
product matters, where reporting to relevant ministers is
required in case of recall or serious accident when the relevant
minister in Japan orders the entity to do so.
Accordingly, the decision to commence an internal investigation is entirely at the discretion of the company. In reality,
however, many companies decide to conduct internal investigations when they discover potential breaches so that they canassess their exposure ahead of formal investigations by the regulators and ensure that directors and senior management discharge
their duties to the company. Entities generally conduct a preliminary internal investigation as soon as they become aware of thepossibility of past or ongoing misconduct to assess its seriousness
and the impact on their business in order to decide whether to
conduct a full-scale investigation as the next step. It is standardpractice in Japan to involve outside counsel in both the preliminary internal investigation and the full-scale investigation.
A director’s duty of care to the company could force senior
management to decide to commence internal investigations.
Under the Companies Act of Japan (Act No. 86 of July 26,2005), a director owes a duty of care to the company and if a
director fails to conduct an investigation despite being aware of
the possibility of misconduct, such a director may be found to
be in breach of his duty to mitigate losses or damage sufferedby the company. Further, industry-specific statutes or regulations may indirectly compel an entity to conduct investigations.
For example, when an entity learns about issues relating to theefficacy or safety of its pharmaceuticals or medical devices, it
is obliged to report the issue to the authorities and, in order toobserve such obligation, an investigation, even preliminary,must be conducted beforehand.
Some self-regulatory organisations such as the Japan Exchange
Regulation have established their own guidelines setting forth
obligations to make efforts to conduct investigations in case alisted company becomes aware of misconduct.
One example of the legal benefit of conducting an internal
investigation is that a company (cartelist or bid rigger) may

Minako Ikeda

decide to apply for leniency in cartel or bid-rigging cases underthe Antimonopoly Act (Act No. 54 of April 14, 1947) and reachout to the Japan Fair Trade Commission ( JFTC). As a result of a
successful leniency application, administrative fines (surcharges)
can be exempted or reduced depending on the applicant’s
ranking. Accordingly, when an entity detects possible cartel
conduct, it is critical to conduct an internal investigation without
delay to gather sufficient information to assess and determine
the possibility or the benefit of a leniency application. In somecases (first applicant), criminal prosecution can be avoided inthis context. Another example of a legal upside is the reduced
penalty in misleading representation cases granted to entities
which voluntarily report their misconduct under the Act against
Unjustifiable Premiums and Misleading Representations (ActNo. 134 of 1962).
1.2 How should an entity assess the credibility of awhistleblower’s complaint and determine whether aninternal investigation is necessary? Are there any legal
implications for dealing with whistleblowers?

It is common for entities to become aware of possible corporate
misconduct through whistleblowing. Once an entity receives awhistleblower’s complaint, it should carefully consider the information reported by the whistleblower and conduct a preliminary
investigation to assess the credibility of the complaint, unless it
is clearly groundless.
The Whistleblower Protection Act of 2004 (WPA) protects
those who expose corporate or government misconduct from
unfair treatment and retribution (for example, dismissal,
demotions or salary cuts). Under the WPA, a “public interest
disclosure” involves the disclosure of the Relevant Disclosure
Information (as defined below) by a worker to his employer,
a government agency or official having jurisdiction, or any
other person, to prevent a matter from occurring or worsening. Disclosures cannot be made for illegitimate purposes.
“Relevant Disclosure Information” means information regarding
criminal conduct or statutory violations relating to the protection of consumer interests, the environment, fair competition
and generally the life, body and property of the public.
Further to June 2020 amendments to the WPA, due to become
effective by June 2022 at the latest, companies employing morethan 300 employees in Japan will have to establish a whistleblowing system and designate a person responsible for whistleblowing-related matters. The detail of the system and requirements will be announced through explanatory guidelines. The
requirements will likely include having a proper policy, helpline,
disciplinary sanctions in case of breach of the internal whistleblowing rules, rules prohibiting retaliation and the inappropriate
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Iwata Godotreatment of whistleblowers and rules dealing with confidentiality and information leakage. A person in charge of whistleblowing matters will need to be appointed under the amended
WPA. The definition of “whistleblowers” to be protectedunder the WPA is broadened to include those who have retired
within the previous 12 months and certain officers in addition to workers under the current WPA. Also, the protection
is enhanced to add immunity for whistleblowers from liabilities
for damage associated with their reporting.
1.3 How does outside counsel determine who “theclient” is for the purposes of conducting an internal
investigation and reporting findings (e.g. the Legal
Department, the Chief Compliance Officer, the Board of
Directors, the Audit Committee, a special committee,etc.)? What steps must outside counsel take to ensurethat the reporting relationship is free of any internal
conflicts? When is it appropriate to exclude an in-houseattorney, senior executive, or major shareholder who
might have an interest in influencing the direction of theinvestigation?

When conducting an internal investigation, the identity of “theclient” will depend on many factors such as the nature of thesuspected misconduct, the person or the department within theentity suspected of being involved in the misconduct and who or
whose body/department has commenced the investigation. The
board of directors or board of corporate auditors often becomesthe client. When a member of the board of directors is the targetof an investigation, the client may be the director in charge oflegal and/or the compliance department.
In order to avoid internal conflicts and ensure due process
and the fairness and credibility of the internal investigation,
the person or department suspected of being involved in the
misconduct is typically excluded from internal reportinglines when an internal investigation is conducted. To achievecomplete independence from internal reporting lines, outside
counsel may recommend setting up a Third-Party Committee(see question 4.1 below). It has been a trend in Japan in recent
years for companies and other organisations to set up ThirdParty Committees in cases of serious misconduct in order toensure the fairness and impartiality of investigations.

22 Self-Disclosure to Enforcement
Authorities
2.1 When considering whether to impose civil or
criminal penalties, do law enforcement authorities inyour jurisdiction consider an entity’s willingness tovoluntarily disclose the results of a properly conductedinternal investigation? What factors do they consider?

In general, enforcement authorities such as the JFTC (especially in the context of the new leniency rules and administrative
surcharges policy to be implemented as of 25 December 2020),
Consumer Affairs Agency (CAA), Financial Services Agency(FSA), Securities and Exchange Surveillance Commission(SESC), Personal Information Protection Committee (PPC),
and Public Prosecutors Office (PPO) take into account the willingness of the entities involved to cooperate as a mitigating
factor when considering whether to impose penalties and theseverity of the penalties. Therefore, the voluntary disclosureof the results of an internal investigation to the enforcement
authorities is generally considered a positive step and a mitigating factor.

Even if the results of a duly conducted internal investigation
disclosed by the entity to the enforcement authority show that
there is no misconduct, this would still be considered a favourable point by the enforcement authority. Even if evidence
supporting the existence of misconduct is found during theinternal investigation, it is generally advisable to disclose such
evidence to the enforcement authorities to prove one’s willingness to come clean.
Furthermore, in 2018 Japan introduced a judicial dealing
system (Shiho Torihiki Seido) for certain crimes, including whitecollar crimes (similar to the US plea bargaining system). Under
this system, an enterprise or individual accused of a violation may enter into an agreement with the prosecutor underwhich the accused agrees to cooperate through the provisionof evidence or testimonies that can help convict a third party(enterprise or individual), and in exchange the prosecutor agrees
to drop or reduce criminal charges.
2.2 When, during an internal investigation, should adisclosure be made to enforcement authorities? What
are the steps that should be followed for making a
disclosure?

As disclosing the results of internally conducted investigations
is not a legal obligation, the timing will depend on the facts ofthe case.
Where the authority has already commenced an investigation and the target entity reasonably believes that there are
no grounds for alleging or suspecting any misconduct or theauthority is mistaken in making allegations, the entity should
consider voluntarily notifying the authority and submitting
supporting evidence at an early stage. It will become difficult
for the authority to change the direction of the investigation
once it has spent some time on it or overturn any decisions it
has already made.
In certain cases, the entity should disclose the results ofan internal investigation to the authority before the authority
commences its investigation to enjoy the benefit of making a
voluntary disclosure. For example, in misleading representation cases, in order for the entity to be eligible for a reductionin penalty, it must report to the CAA misconduct punishedby the Act against Unjustifiable Premiums and Misleading
Representations (Act No. 134 of 1962) before the entity becomesaware of the investigation commenced by the CAA.
In any case, it is advisable to consult with outside counsel
before making any disclosure to a regulatory authority, as disclosure could lead to documents shared with them being subject todocument production requests by the other party in Japaneselitigation, or a loss of client-attorney privilege where it can beprotected (in countries such as the US (please see questions 5.1
and 5.5 below)).
2.3 How, and in what format, should the findings of aninternal investigation be reported? Must the findings ofan internal investigation be reported in writing? Whatrisks, if any, arise from providing reports in writing?

The findings do not have to be presented to the authorities
in writing; however, the authorities may request the entity toreport the findings in writing. Further, written form may be
the most suitable way depending on the nature of the findings.
Sometimes the format is prescribed by the regulator (e.g., forleniency applications to be made with the JFTC).
One of the risks of providing reports in writing to the enforcement authority voluntarily is that the entity may be forced to

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submit it as evidence in litigation. Under Japanese law, a party
in a litigation may petition the court to issue an order against theother party or a third party to submit documents in its possession
when the other party refuses to voluntarily provide such documents as evidence or a third party refuses to cooperate. This is alimited process subject to stringent conditions that has not muchto do with discovery in the US. One of the important exceptions applies to documents prepared exclusively for the use of theperson in possession thereof (an “own-use document”) (Article
220 (iv)(d) of the Code of Civil Procedure (Act No. 109 of 1996)).
In July 2019, although this is still a lower court decision, the Osaka
High Court ruled that an internal investigation report in general
did not qualify as an “own-use” document if such a report wasshared with the enforcement authorities on a voluntary basis.

32 Cooperation with Law Enforcement
Authorities
3.1 If an entity is aware that it is the subject ortarget of a government investigation, is it required toliaise with local authorities before starting an internal
investigation? Should it liaise with local authorities even
if it is not required to do so?

There is no legal obligation to liaise with the authorities before
starting an internal investigation. The timing is left to thediscretion of the entity.
However, in certain cases, the entity should liaise with theauthorities, not necessarily before starting the internal investigation but in the course of the investigation, to move the internal
investigation in the right direction. Where an entity learns ofpossible misconduct through the launching of a government
investigation, the entity does not always have knowledge ofthe specific allegations or the details of the suspected violation. Therefore, the target entity should contact and try to holdregular meetings with the authorities to find out what the allegations or suspected breaches are in order to properly conduct
its internal investigation and collect appropriate evidence tosupport its position, regardless of whether it will be denying or
admitting any allegation or suspicion of wrongdoing.
It is also advisable to contact the enforcement authorities as
they take into account the entity’s willingness to cooperate as a
mitigating factor when deciding whether to impose a penalty;or, if they do, at what level.
3.2 If regulatory or law enforcement authorities
are investigating an entity’s conduct, does the entity
have the ability to help define or limit the scope of agovernment investigation? If so, how is it best achieved?

While there is no formal system under which the target entity
may request the authorities to limit the scope of the investigation, in practice, the target entity may do so by close cooperation with the authorities and outside counsel. For example,
the JFTC may open an investigation into a case of abuse of
superior bargaining position based on reports by businesses
that allege they are being subject to abuse; however, the JFTC
itself may not be clear which specific actions of the target entity
may be deemed an abuse at an early stage of the investigation. Therefore, through proper explanations and the supply
of appropriate materials to help the JFTC to accurately understand its business, the target entity may influence the JFTC’s
next steps in limiting the scope of the investigation and circumscribing the allegations and their legal qualification.

3.3 Do law enforcement authorities in your jurisdiction
tend to coordinate with authorities in other jurisdictions?
What strategies can entities adopt if they face
investigations in multiple jurisdictions?

Cases of coordination have increased over the years.
The JFTC has entered into international cooperation agreements on the enforcement of competition laws with the US, EU
and Canada. The JFTC is actively cooperating with competition authorities in several jurisdictions. Memoranda on competition have been made with many countries and the partnershipagreements to which Japan is a party include competition-related
provisions (Chapter 16 of the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership and Chapter 11 of
the Agreement between The European Union and Japan for an
Economic Partnership). Under Article 43-2 of the Antimonopoly
Act, the JFTC can exchange information with foreign competition authorities for the enforcement of their own antitrust laws
under strict conditions and provided the exchange of information does not interfere with the implementation of the Act or
conflict with the interests of Japan. For criminal procedures,
the Act on International Assistance in Investigations and Other
Related Matters of 1980 serves as a basis for cooperation between
the Minister of Justice and its foreign counterparts.
It is prudent to presume that the local enforcement authorities
may at one point during their investigation get hold of information in the possession of foreign authorities, and therefore entities that conduct business in multiple jurisdictions should pay
attention to the consistency of their position generally regarding
suspected breaches, and of their position with the information
they provide to authorities in several jurisdictions.

42

The Investigation Process

4.1 What steps should typically be included in an
investigation plan?

The typical steps an entity should take once it becomes awareof actual or suspected misconduct are to: (i) conduct a preliminary investigation in order to assess the risks and elaborate an
overall plan to deal with the misconduct; (ii) determine whether
to conduct the investigation internally or to set up a Third-Party
Committee; (iii) preserve, collect and assess relevant documents,
e-mails and other data (both hard and soft copies) and interview
relevant persons such as employees and directors; and (iv) (if theexistence of misconduct is confirmed) analyse the causes of the
misconduct, consider preventive measures and implement suchmeasures.
A Third-Party Committee is an independent and neutral bodyconsisting of external experts with no conflict of interest withthe entity, generally tasked by the entity to investigate, analyse
the causes of misconduct and propose preventive measures orremedies. Companies in Japan generally set up a Committee
in cases where the misconduct involves directors and senior
management, or where the misconduct is of such magnitude
that it will have repercussions in public. This step is needed
to ensure transparency and accountability towards stakeholders
and avoid reputational and credibility risks.
If the entity decides to set up a Third-Party Committee, theassessment of documents and interviewing of employees/directors(see (iii) above) are conducted by the Committee. For step (iv)above, the Committee will prepare a report in which it analyses thecauses of misconduct and recommends preventive measures. This
report may be addressed to the entity itself or the board of directors or statutory auditors, depending on which body is heading theinvestigation and has decided to set up the Committee.
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Iwata Godo

In addition to the Third-Party Committee, in case the assessment of directors’ or statutory auditor’s civil liability is required,
it is standard practice in Japan to set up a Liability Investigation
Committee consisting of independent outside counsel/attorneys
with no conflict of interest either with the entity, the target of
the investigation, or the board of directors and/or the boardof statutory auditors. The Committee will report the results of
the investigation to either the board of directors (when statutory auditors’ liability is at stake) or the board of auditors (whendirectors’ liability is at stake), and these results are used as a basis
for their decision on whether or not to commence legal actions
against directors or statutory auditors.
4.2 When should companies elicit the assistance ofoutside counsel or outside resources such as forensic
consultants? If outside counsel is used, what criteria
or credentials should one seek in retaining outside
counsel?

It is standard practice for companies in Japan to obtain assistance from outside counsel and set up an Internal Investigation
Committee or a Third-Party Committee when conducting investigations in order to ensure adequate accountability and transparency for the benefit of stakeholders. Under very limited circumstances, where only a minor type of misconduct is suspected, may
investigations be carried out internally; such cases are rare.
Consulting a forensic expert and IT consultant is alsofrequent, depending on the volume of digital data that needs tobe reviewed for the investigation.

52 Confidentiality and Attorney-Client
Privileges
5.1 Does your jurisdiction recognise the attorneyclient, attorney work product, or any other legal
privileges in the context of internal investigations? Whatbest practices should be followed to preserve theseprivileges?

Attorney-client privilege and protection under the attorney
work-product doctrine are currently not recognised in Japan.
However, when an investigation is conducted globally, Japaneseentities should pay attention to the handling of information
which may be privileged when submitted in other jurisdictions.
For example, under US laws, if an entity waives the privilege bydisclosing certain attorney-client privileged communication, it
may be considered that it has also waived privilege to other information which relates to the same subject matter as the communication which has been disclosed. Therefore, it is crucial thatJapanese entities carefully examine which information is privileged or protected in foreign jurisdictions and take measures toprotect important information under the legal privileges.
For cartel investigations, the JFTC has established new procedures for administrative investigations to address concerns
regarding attorney-client privilege, which will become effective
on 25 December 2020. Attorney-client privilege will be protectedin administrative investigations into unreasonable restraint oftrade prohibited under Article 3 of the Antimonopoly Act, underwhich confidential communications between an enterprise andits attorney that address legal issues and satisfy certain conditions
will not be able to be accessed by the investigators and must be
returned to the enterprise. The JFTC will establish rules under
Article 76 of the Antimonopoly Act and guidelines based on theprinciples described below.

Pre-existing materials created before consulting the attorney,materials indicating facts underlying confidential communication
regarding legal advice between the enterprise and attorney: theseso-called primary materials/fact-finding materials are outside
the scope of the arrangement. The enterprise must request thebenefit of this system at the time of an order for submission. A
so-called determination officer will vet the materials earmarked
as privileged by the enterprise and confirm whether these documents satisfy specific requirements such as proper labelling andstorage, and restrictions on the scope of persons who have knowledge of the content of the confidential information. Enterprisesthat wish to have certain documents treated as privileged under
this system must submit to the JFTC a summary of such documents, including information such as:■
the date of preparation of the documents;■
the name of the person who has prepared the documents;■
the names of persons with whom the documents wereshared; the attributes and summary of each documents; and■any out-of-scope documents included in the log to the
JFTC.
As this summary must be submitted to the JFTC within two
weeks after the JFTC issues the order for submission of documents, enterprises should advisably keep track of communications/materials that may qualify as privileged under this system.
5.2 Do any privileges or rules of confidentiality apply
to interactions between the client and third parties
engaged by outside counsel during the investigation(e.g. an accounting firm engaged to perform transaction
testing or a document collection vendor)?

Communication between the client and third parties other thanattorneys are not privileged under Japanese law.
Although not a privilege strictly speaking, attorneys, doctors
and other professionals and experts to whom confidential information has been disclosed may refuse to testify and give evidence(Code of Civil Procedure, Article 197-1(2)) or refuse to submit
documents (Article 220) regarding facts that have come to theirknowledge in the performance of their duties. However, Article
197-1(2) does not apply where the witness is released from his or
her professional duty of secrecy under Article 197. The attorneys’
obligation to keep secret information obtained in confidence
while carrying out their professional duties is also stated under
Article 23 of the Lawyers’ Law (Law No. 205 of 10 June 1949).
5.3 Do legal privileges apply equally whether
in-house counsel or outside counsel direct the internal
investigation?

No legal privilege is recognised under Japanese law.
5.4 How can entities protect privileged documents
during an internal investigation conducted in yourjurisdiction?

As mentioned in question 5.1 above, it is important for entities that are subject to global or multijurisdictional investigations to be aware of legal privilege rules in force in each relevant foreign jurisdiction and take measures to protect privileged
information. Entities should advisably consult with counsel
to first understand the scope of the legal privileges, then markprivileged documents and data accordingly and store them separately from other documents or data.

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5.5 Do enforcement agencies in your jurisdictions keep
the results of an internal investigation confidential if
such results were voluntarily provided by the entity?

6.4 What types of documents are generally deemed
important to collect for an internal investigation by yourjurisdiction’s enforcement agencies?

While enforcement authorities are not legally obliged to keep
the results of internal investigations voluntarily submitted by
the entities, they may negotiate with the authorities and request
them not to disclose the results to third parties (except for the
JFTC in antitrust investigations, where JFTC officials are undera duty to keep confidential any confidential information thatcomes to their knowledge while carrying out their duties underthe Antimonopoly Act (with certain exceptions)).
Generally speaking, entities should keep in mind that the court
may issue an order to submit documents to a third party (seequestion 2.3 above) as well as request a third party, upon petition
from a party, to voluntarily provide documents in its possession
for submission as evidence. Such third party may also include
enforcement authorities. Once submitted as evidence in litigation, results of the internal investigation would generally become
available to the public.

While there are no guidelines, examples of types of documents
and data deemed important for an internal investigation are
documents requesting internal corporate approvals (Ringisho),meeting minutes, schedules, planners, memos, financial records,
invoices and receipts, contracts, internal policies and procedures, internal audit reports, and internal communication via
e-mail or chat, etc.

62

Data Collection and Data Privacy Issues

6.1 What data protection laws or regulations apply tointernal investigations in your jurisdiction?

The Act on the Protection of Personal Information (the APPI)(Act No. 57 of 2003) is the principal Japanese data protection
legislation in the private sector. The PPC has adopted guidelines to ensure the proper and effective implementation of the
APPI by businesses. The PPC’s general guidelines supplement
the APPI, and separate guidelines apply to specific sectors suchas the finance, medical and telecommunications sectors. Theselaws and regulations also apply to internal investigations. In
2020, the Diet passed a bill to amend the APPI and the amendments are expected to come into force in early 2022.
6.2 Is it a common practice or a legal requirement
in your jurisdiction to prepare and issue a document
preservation notice to individuals who may havedocuments related to the issues under investigation?
Who should receive such a notice? What types of
documents or data should be preserved? How should
the investigation be described? How should compliancewith the preservation notice be recorded?

It is not a legal requirement to prepare and issue a document
preservation notice in Japan. However, as collection of objective evidence such as documents and data is important in effectively conducting an investigation, an entity could issue a noticeto specific individuals or relevant departments or bodies within
the entity to preserve documents and data relevant to theinvestigation.
6.3 What factors must an entity consider when
documents are located in multiple jurisdictions(e.g. bank secrecy laws, data privacy, procedural
requirements, etc.)?

An entity in Japan should check whether documents located inforeign jurisdictions include personal data, as transfer of such
documents may be subject to cross-border transfer restrictions
under the data protection laws and regulations of those foreign
jurisdictions.

6.5 What resources are typically used to collectdocuments during an internal investigation, and which
resources are considered the most efficient?

Depending on the volume of digital data, entities typicallyretain forensic experts and IT consultants to collect, extract andanalyse the relevant data from their servers.
6.6 When reviewing documents, do judicial orenforcement authorities in your jurisdiction permit
the use of predictive coding techniques? What are
best practices for reviewing a voluminous document
collection in internal investigations?

There are no restrictions on the use of predictive coding
techniques.
Methods for effective review of voluminous data, for example
e-mail correspondence, include the deletion of duplicatedmessages, narrowing down by dates and sender/receiver of themessages and use of technology-assisted review such as keyword
search. AI-based narrowing-down of data is not yet prevalentin Japanese practice. It is important not to excessively limit thescope, as preservation and collection of data are done at an earlystage of the investigation when the scope and target of the investigation are often set tentatively.

72

Witness Interviews

7.1 What local laws or regulations apply to interviewsof employees, former employees, or third parties? Whatauthorities, if any, do entities need to consult before
initiating witness interviews?

There are no laws or regulations that apply to interviews of
employees, former employees, or third parties in Japan. Further,
there is no legal obligation for the entity to consult with theauthorities before initiating witness interviews.
7.2 Are employees required to cooperate with theiremployer’s internal investigation? When and underwhat circumstances may they decline to participate in awitness interview?

In general, employees are required to cooperate with theiremployers’ internal investigation because even if such obligations are not provided for in employment contracts or office
work rules and other regulations, employers may order theiremployees to cooperate as part of the exercise of their authority
as employers. However, employees may decline to cooperatewith their employers’ internal investigation when they havereasonable ground to do so.

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Iwata Godo

7.3 Is an entity required to provide legal representation
to witnesses prior to interviews? If so, underwhat circumstances must an entity provide legal
representation for witnesses?

An entity is not legally required to provide legal representation
to witnesses.
7.4 What are best practices for conducting witness
interviews in your jurisdiction?

7.7 Can employees in your jurisdiction request toreview or revise statements they have made or are thestatements closed?

Employees may request to review or revise their statements. If
a revision is made, it should be reflected in the investigation
report.
7.8 Does your jurisdiction require that enforcement
authorities or a witness’ legal representative be present
during witness interviews for internal investigations?

Interviews should be conducted subject to consent and the existence and contents of such interviews should be kept confidential. For more effective results, interviewers should be well
prepared and briefed and have sufficient background information on the alleged misconduct before conducting the interviews. Further, the interviews should ideally be conducted in
the presence of an outside counsel to maintain the fairness ofthe procedure and the credibility of the results of the interview.

There are no such general requirements under Japanese law.
However, if the interviewee requests the presence of his/herlegal representative during the interview, the interviewer may
have to allow them to be present in order to secure the interviewee’s cooperation.

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Investigation Report

7.5 What cultural factors should interviewers be awareof when conducting interviews in your jurisdiction?

8.1 How should the investigation report be structured
and what topics should it address?

Interviewers should be polite and courteous and explain the
purpose of the interview to obtain full cooperation from theinterviewees. It is important, when relevant, to clarify that theinvestigation conducted by the entity is not intended to pursue
the employees’ liability or penalise them, but that the purpose is
to investigate the facts, analyse the causes of misconduct, andidentify preventive measures.

A typical report conducted by a Third-Party Committee will
cover the following topics: (i) purpose and background of theestablishment of the Committee; (ii) overview of the target(s)of the investigation; (iii) investigation process such as preservation and collection of documents, interviews, and digitalforensic investigations; (iv) facts of the case analysed and issues
determined as a result of the investigation; (v) assessment froma legal and/or a tax and accounting perspective; (vi) analysis of
the causes of misconduct; and (vii) proposal identifying preventive measures, remedies and legal action/complaints.
In some cases, the Committee produces a full version as
well as a redacted version masking personal information andother business-related confidential information for publishing
purposes.

7.6 When interviewing a whistleblower, how canan entity protect the interests of the company while
upholding the rights of the whistleblower?

To avoid any witch hunt within the entity and the discouraging of employees from using the whistleblowing system, theentity should inform the interviewed whistleblower that his/
her identity will remain confidential and that any informationthat may lead to the identification of the whistleblower will not
be released. However, such confidential information could be
disclosed in the litigation.

Corporate Investigations 2021
© Published and reproduced with kind permission by Global Legal Group Ltd, London

85

86

Japan

Akira Matsuda is an attorney-at-law (admitted in Japan and New York) and a partner at Iwata Godo heading the AI/TMT and Data Protection
practice group. He is based in Tokyo and Singapore. His practice focuses on cross-border transactions including mergers and acquisitions,as well as international disputes (litigation/arbitration), and advice on digital/TMT-related matters. Mr. Matsuda regularly advises Japaneseand foreign clients on data security issues (Japanese laws, the Singapore Personal Data Protection Act (PDPA), and the EU General Data
Protection Regulation (GDPR)), including on the structuring of global compliance systems. He also advises in complicated cross-bordercorporate investigation matters.
He is a graduate of the University of Tokyo (LL.B.) and Columbia Law School (LL.M.).
Iwata Godo
Marunouchi Building 15th Floor
2-4-1, Marunouchi
Chiyoda-ku, Tokyo
Japan

Tel:
Email:
URL:+81 3 3214 6205
amatsuda@iwatagodo.com
www.iwatagodo.com

Minako Ikeda is an associate at Iwata Godo specialising in general corporate and dispute resolution. She handles many cross-bordertransactional matters as well as national/cross-border disputes. She also has experience in corporate investigation and criminal defence.
Iwata Godo
Marunouchi Building 15th Floor
2-4-1, Marunouchi

Tel:
Email:
URL:+81 3 3214 6205
minako.ikeda@iwatagodo.com
www.iwatagodo.com

Chiyoda-ku, TokyoJapan

Iwata Godo was established in 1902 and is one of Japan’s premier law firms.
It is a full-service firm numbering around 80 attorneys. Iwata Godo assists
its corporate clients in upgrading their internal controls, risk management
policies and other corporate governance functions to prevent white-collar
crime, including misuse of assets, insider trading or data protection
breaches. It advises its clients and their boards on effective governancestructures and compliance. The firm has many years of experience inadvising on shareholder and boardroom disputes. It represents clients ininvestigations by regulators and prosecutors on regulatory and accounting
issues, shareholder claims, directors’ liabilities, and other complex situations. A number of the firm’s attorneys have spent time with the regulators,
while others have practised as judges or prosecutors. As a result, Iwata
Godo can efficiently assist its clients in conducting or responding to investigations, and the firm has been involved in many high-profile cases.
www.iwatagodo.com

Corporate Investigations 2021
© Published and reproduced with kind permission by Global Legal Group Ltd, London

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