Business law digest

JAPAN

Deposit-backed digital currency test

Japan plans to launch a deposit-backed digital currency in 2022. The currency, provisionally called the DCJPY, will use blockchain distributed ledger technology. The digital currency will use a common platform to speed up transactions. The test run for the currency was started in late November, according to the Digital Currency Forum – a consortium of more than 70 Japanese companies, banks, local governments and organisations. Japan’s Financial Services Agency and the central bank, Bank of Japan, will be observers to the test run.

Rare earth minerals a national security issue

Japan’s new Foreign Exchange and Foreign Trade Law declared the procurement of rare earth metals is a matter of national security and public interest. Beginning 4 November 2021, foreign investors may require approval and submission of post-acquisition reports and filings before acquiring shares of companies engaged in the rare earth minerals business. The move is in response to China banning the export of rare earth minerals to Japan in 2010. The Japanese government hopes to ensure a stable supply chain and procurement of all necessary resources by closely monitoring foreign exchanges and ensuring the stability of its manufacturing sector as demand for rare earth minerals increases globally.

SOUTH KOREA

Merger control rules target ‘killer acquisitions’

Korea’s antitrust enforcer has set new rules to target “killer acquisitions”, i.e. the acquisition of small innovative startups by larger established companies. The Korea Fair Trade Commission (KFTC) has set transaction values at KRW600 billion (USD500,000) and established a separate local test to ensure that the target entity has a significant level of activity in the Korean market. The new rules stipulate that the target entity must have: (1) sold or provided products or services in the Korean market to at least 1 million people monthly; (2) have an annual budget of KRW30 billion related to leasing R&D facilities or using R&D personnel in Korea; or (3) other similar factors, further notified by the KFTC. The new thresholds went into effect on 30 December 2021 and will apply to all future transactions.

Business Law Digest is prepared by Jeremy Chapnick