The Journal The Authority on Global Business in Japan

Ministry of Finance
Revisions to audits and inspections manual considered

In 1998, following an extensive reorganization of Japan’s bureaucracy, the Ministry of Finance’s investigative and auditing functions were integrated. Two decades later, the ministry’s Finance Investigation Manual is undergoing extensive revision.

Following the collapse of the economic bubble of the 1980s, the ministry was derided by some as the “Finance Disposal Ministry.” Even though conditions are back to normal, the ministry has been unable to shed this stigma and has been seeking radical reorganization. It hopes to encourage improved intermediary functions for financial institutions, thereby serving as a catalyst for economic growth and becoming the “Finance Nurturing Agency.”

The report seeking reorganization—issued last March by expert advisors—points out that the ministry will seek to “review the means of investigation and auditing upon which Japan’s financial administration is established and evolve its process.”

The experts suggested the merging of investigation—involving entering premises of financial institutions with a search warrant—and auditing— questioning or issuing instructions. Currently, three bureaus exist to carry out these functions. By combining these, the financial administration’s “command center” would be strengthened, the advisors noted.

The group also suggested that auditing guidelines and separate investigation manuals in use for banks and insurance firms be combined and, through dialog, activities to encourage financial institutions to put greater priority on their customers be promoted.

The ministry is expected to decide on reorganization this summer, and to put the new system into effect from FY2018. This would be one step in the process of shedding the confrontational image the ministry adopted following reorganization 17 years ago.

Ministry of Land, Infrastructure, Transport and Tourism
Makers of automated vehicles to be liable

The expert panel that serves as an advisory group to the Ministry of Land, Infrastructure, Transport and Tourism met in late April to deliberate on various matters, including liability in traffic accidents involving fully automatic vehicles. It was proposed that, when the cause of the accident is due to a glitch in the system, the costs should be borne not only by insurance companies but by the manufacturers.

Currently, models incorporating certain automated functions such as braking and acceleration are reaching market, and the government has set 2025 as the year by which fully automated vehicles—those requiring no effort by the driver—will achieve practical usage. In this regard, authorities are proceeding with the necessary legal preparations.

Current law covering automobile accidents treats the vehicle owner or driver as the responsible party. But in the case of fully automated vehicles, such causes as a malfunction of the automated system—or even hacking—can be foreseen. This complicates how responsibility is determined.

The expert group has suggested that the basic framework in which driver or company bears the main responsibility could be maintained, but a system of investigating the cause of accidents would be set up so that the driver can request the manufacturer to bear responsibility in the form of a fixed amount of insurance, funding, etc. The details are expected to be hammered out within the current fiscal year.

Should a vehicle that is hijacked through some external cause, such as hacking, become involved in an accident, the case would be treated in the same manner as one involving a stolen car. Compensation for damage in such cases as hit-and-run or operating an uninsured vehicle would be treated in a manner similar to current government guidelines.

As motor vehicle manufacturers engage in heavy competition to develop fully automated models, the government is expediting development of policies to position Japan as a leader in setting international standards for automated vehicle technologies.

Keizaikai magazine