How Legally Binding Are Administrative Standards, Notices (Kokuji), and Circulars (Tsutatsu) in Japan?

Japanese Attorney at Law - Bengoshi L.L.

• 11 min read

Businesses operating in Japan frequently encounter a variety of administrative communications and standards issued by government agencies. These can range from formal public notices published in the Official Gazette to internal circulars that guide agency officials. Understanding the legal weight and practical implications of these issuances—specifically Public Notices (kokuji), Circulars (tsūtatsu), and other administrative standards—is crucial for ensuring compliance and predicting agency actions. While formal statutes enacted by the Diet and Cabinet Orders (seirei) clearly possess binding legal force, the status of these other administrative pronouncements is more nuanced. This article explores their legal nature and how they affect businesses, drawing on interpretations from Japanese courts.

To understand the legal effect of administrative standards, it's helpful to have a basic grasp of the hierarchy of legal norms in Japan:

  1. The Constitution: The supreme law of the land.
  2. Statutes (Hōritsu): Laws enacted by the National Diet.
  3. Cabinet Orders (Seirei): Orders issued by the Cabinet to implement statutes or constitutional provisions.
  4. Ministerial Ordinances (Shōrei): Ordinances issued by individual government ministers within their jurisdiction, typically based on delegation from statutes or Cabinet Orders. These are generally considered legally binding regulations.

Below these formal, legally binding norms lie various other administrative issuances, including kokuji and tsūtatsu. Their position and binding force within this hierarchy require closer examination.

Public Notices (Kokuji)

A kokuji (告示) is a formal public announcement made by a government minister or an administrative agency, and it is typically published in the Official Gazette (Kanpō). Kokuji serve a variety of purposes, such as making certain administrative decisions or information publicly known, or, in some cases, setting forth specific standards or rules when authorized by higher-level legislation.

The legal nature of a kokuji is not uniform; its binding effect depends on its content and, critically, on the statutory authority underpinning it:

  1. Kokuji as Delegated Legislation:
    If a statute, Cabinet Order, or Ministerial Ordinance explicitly delegates authority to a minister or an agency to establish specific rules, standards, or criteria by means of a kokuji, then such a kokuji can have the force of delegated legislation. In these instances, the kokuji becomes legally binding on the public, provided it remains within the scope of the powers delegated by the higher law.
    • An example often cited is the detailed standards for public assistance benefits (hogo kijun) under the Public Assistance Act. These standards are determined by the Minister of Health, Labour and Welfare and promulgated via kokuji, and they are treated as legally binding criteria defining eligibility and benefit levels. Judicial review of such standards, as seen in the Living Protection Standard Revision Case (Supreme Court, February 28, 2012; related to case 6-2[A] in some casebooks), proceeds on the understanding that these are substantive, legally significant rules.
  2. Kokuji Setting Educational Standards – The Learning Guidelines Case:
    The National Curriculum Standards, known as the Learning Guidelines (Gakushū Shidō Yōryō), are issued as kokuji by the Ministry of Education, Culture, Sports, Science and Technology. Their legal status was a subject of considerable debate for some time.
    • In the Denshūkan High School Case (Supreme Court, January 18, 1990; related to case 4-1), the Supreme Court affirmed that these Learning Guidelines possess a "legal character" (hōkisei). While not statutes themselves, they are promulgated based on a framework of delegation within the School Education Act and its enforcement regulations. As such, they set legally significant, albeit broad, standards for the content of public school education across Japan.
    • A related Supreme Court decision issued on the same day (Minshū Vol. 44, No. 1, p. 1) went further, treating a teacher's deviation from these official Learning Guidelines as a potential violation of the Local Public Service Act (which includes a duty to obey laws, regulations, and lawful orders of superiors in the course of official duties). This finding supported the legality of disciplinary action taken against the teacher, underscoring the substantive legal relevance of the Guidelines.
  3. Kokuji as an Administrative Disposition (Shobun):
    In some instances, a kokuji itself can function as an administrative disposition if it directly determines the legal rights and duties of specific or identifiable parties, or defines the legal status of specific property, without requiring further administrative action.
    • For example, a kokuji that designates a specific geographical area for a particular land use restriction (such as designating certain roads as "two-meter roads" under the Building Standards Act, thereby imposing building setbacks and other obligations on abutting landowners) can be treated as an administrative disposition subject to judicial review. This was seen in the Two-Meter Road Designation Case (Supreme Court, January 17, 2002; related to case 16-8).

The key takeaway for kokuji is that their legal status and binding effect on businesses and the public depend heavily on their content and the nature of the statutory authority under which they are issued. If a kokuji is merely informational, its direct legal bindingness may be limited. However, if it implements a specific legislative delegation to set rules or standards, or if it directly alters legal rights and obligations, it can be legally binding and subject to judicial scrutiny as such.

Circulars (Tsūtatsu): Internal Directives with Potential External Impact

Tsūtatsu (通達) are a far more common form of administrative issuance than legally binding kokuji. These are essentially notices, directives, or interpretations issued by higher-level administrative organs to their subordinate administrative organs or officials. For instance, a ministry might issue a tsūtatsu to its regional bureaus, or a minister might issue one to divisions within the ministry or to affiliated agencies.

The primary purposes of tsūtatsu are:

  • To ensure uniform interpretation and application of laws, regulations, and policies throughout the administrative apparatus.
  • To provide guidance to officials on how to exercise discretionary powers.
  • To establish internal administrative procedures, operational guidelines, or enforcement priorities.

Unlike statutes, cabinet orders, ministerial ordinances, and many significant kokuji, tsūtatsu are generally not published in the Official Gazette and are primarily intended for internal administrative consumption.

The prevailing and long-standing judicial view in Japan is that tsūtatsu, in principle, do not have direct, legally binding force on the general public or businesses. They are considered internal administrative orders or guidelines.

  • This was clearly articulated in the Cemetery and Burial Act Circular Case (Supreme Court, December 24, 1968; related to case 16-11). The Court stated that tsūtatsu are essentially instructions from higher to lower administrative organs concerning the exercise of their duties and powers. While subordinate officials and agencies are bound to follow such directives (as a matter of internal administrative discipline), members of the public are not directly bound by them.
  • Consequently, an administrative action taken by an official that conforms to a tsūtatsu is not automatically lawful if the tsūtatsu itself misinterprets the empowering statute or relevant regulations. Conversely, an action taken by an official that deviates from a tsūtatsu is not automatically unlawful if the action itself is consistent with the law.
  • Crucially, courts are not bound by the legal interpretations contained in tsūtatsu. Courts are free to make their own independent interpretations of statutes and regulations and may find that a tsūtatsu is based on an incorrect understanding of the law.

Practical Effects and Indirect Influence of Tsūtatsu

Despite their formal lack of direct legal bindingness on the public, tsūtatsu can have significant practical effects and indirect influence on businesses and how the law is administered:

  1. Guiding Administrative Practice and Ensuring Consistency:
    • Tsūtatsu play a vital role in shaping day-to-day administrative practice. They provide officials with a common understanding of how to interpret ambiguous legal provisions and how to exercise discretion, thereby promoting consistency and predictability in administrative actions across different offices or regions.
    • The Pachinko Machine Taxation Case (Supreme Court, March 28, 1958; related to case 4-7) illustrates this. For a period, pachinko machines were generally not subject to a commodity tax. However, the Tokyo Regional Taxation Bureau then issued a tsūtatsu clarifying that, in its interpretation, pachinko machines fell under the statutory category of taxable "amusement goods." Subsequently, tax assessments were levied on pachinko machine manufacturers based on this interpretation.
    • The Supreme Court upheld the legality of these tax assessments. Its reasoning was that, upon independent examination, pachinko machines did indeed fall within the statutory definition of "amusement goods." Therefore, the tax was fundamentally based on the law itself. The tsūtatsu in this instance merely served as the internal directive or "trigger" for tax officials to begin consistently applying the law in accordance with what the Court found to be a correct interpretation. The Court stated that as long as the content of a tsūtatsu aligns with a correct interpretation of the governing law, an administrative disposition (like a tax assessment) made pursuant to that tsūtatsu is considered to be properly based on the law.
    • This implies that while a tsūtatsu isn't law itself, if it accurately reflects the law, actions taken in accordance with it will likely be upheld. Businesses, therefore, often pay close attention to tsūtatsu as they signal how an agency is likely to interpret and enforce legal obligations.
  2. Creating Legitimate Expectations and the Duty of Fair Notification:
    • If an administrative agency, through its tsūtatsu or consistent past practice informed by such circulars, establishes a particular interpretation or way of handling certain matters, and businesses rely on this, a sudden, unannounced change in that interpretation or practice can raise issues of fairness and protection of legitimate expectations.
    • The Stock Option Taxation Case (Supreme Court, October 24, 2006; related to case 1-6) is highly relevant here. For several years, the tax authorities, through their unwritten internal practices (which were reflected in some publicly available materials supervised by tax officials), had generally treated gains from certain employee stock options as "temporary income." Taxpayers had filed their returns based on this understanding. Subsequently, the tax authorities internally shifted their interpretation, deciding to treat such gains as "salary income" (which usually attracts a higher tax rate). This new interpretation was then applied, and importantly, penalties were imposed for underpayment based on this revised view. Critically, this significant change in administrative handling was not initially announced through a formal tsūtatsu or other clear public notification.
    • The Supreme Court, while not necessarily disagreeing with the substantive correctness of reclassifying the income as "salary income," focused on the fairness of imposing penalties for underpayment in these circumstances. The Court held that the taxpayers had a "justifiable reason" (seitō na riyū) for their original tax declarations because they had relied on the previously prevailing (though perhaps not formally promulgated via a tsūtatsu in all instances) administrative practice, and the tax authorities had not clearly and formally notified them of the change.
    • The Court strongly suggested that when tax authorities intend to alter an established administrative interpretation or handling, especially one that has been publicly indicated or consistently followed for some time and has thereby created public reliance, they should ideally achieve this through a formal revision of the law itself. Failing that, they should, at a minimum, issue a clear and prospective administrative circular (tsūtatsu) to ensure that taxpayers are adequately informed of the change and have a fair opportunity to adapt their affairs. Imposing penalties for conduct that was consistent with a past practice actively fostered or tolerated by the authorities themselves, without such clear advance notification of a change, was deemed unfair.
    • This case underscores that while tsūtatsu may not be "law" in the sense of directly binding the public, they play a crucial role in administrative transparency and can shape legitimate public expectations. An unannounced deviation by an agency from a long-standing practice (a practice that a tsūtatsu could have, and perhaps should have, clarified or formally altered) can significantly affect the fairness of subsequent enforcement actions, particularly concerning the imposition of penalties.
  3. Structuring Agency Discretion and Influencing Judicial Review:
    • Administrative agencies often use tsūtatsu and internal guidelines to structure the exercise of their own discretionary powers, aiming for consistency and fairness in application.
    • While courts are not bound by these internal standards, they may refer to them when reviewing whether an agency has abused its discretion. If an agency has established rational internal standards (e.g., via a tsūtatsu) for exercising discretion and then acts consistently with those standards, its decision is more likely to be upheld by a court, provided the standards themselves are lawful and reasonable.
    • The Mitsubishi Taxi Case (Supreme Court, July 19, 1999; related to case 6-10[C]) touched upon this. The Ministry of Transport had issued a tsūtatsu that established an "average cost method" as a concrete internal standard for reviewing applications for taxi fare increases. The statutory criterion for fare approval was broad (requiring fares to cover "appropriate costs under efficient management and include appropriate profit"). The Supreme Court acknowledged that the tsūtatsu's calculation method was a rational way to give concrete meaning to this broad statutory criterion and to guide the exercise of administrative discretion. Applying fares based on this average cost method was generally considered a permissible exercise of discretion.
    • However, the Court also held that if a taxi operator submitted an application for a different fare and provided all the legally required supporting documentation (such as its own detailed cost calculations), the administrative agency still had a duty to individually examine that specific application to determine whether it met the statutory criteria, based on the evidence submitted. The agency could not simply reject the application outright solely because it deviated from the calculation method set out in the internal tsūtatsu, without undertaking a proper individual assessment against the law itself.
    • This implies an important dynamic: Tsūtatsu can provide rational and valuable guidelines for the consistent exercise of agency discretion, and administrative actions that conform to such well-reasoned tsūtatsu are often judicially supported. However, these internal standards do not absolve agencies of their fundamental duty to consider individual applications on their merits and to make decisions that ultimately align with the requirements of the governing statutes. Tsūtatsu are intended to structure and guide discretion, not to rigidly replace individualized judgment where the law and the specific facts of a case demand such judgment. This can be seen as an "indirect" legal effect, stemming from general principles of administrative law such as equal treatment (treating like cases alike) and rational administration. If an agency establishes a tsūtatsu, it is generally expected to follow it unless there is a good and articulated reason for departure in a particular case; and if it does depart, it should be able to justify that departure.

Distinguishing Legally Binding Regulations from Non-Binding Administrative Standards

For businesses, it is vital to distinguish between:

  • Legally Binding Regulations: These include statutes, Cabinet Orders, Ministerial Ordinances (shōrei), and some kokuji that are issued based on a specific delegation of legislative power from a statute. These create legally binding rules for the public and have the force of law, provided they are within the scope of the delegation and constitutional limits. Non-compliance can lead to direct legal sanctions.
  • Non-Binding Administrative Rules and Standards: This category primarily includes most tsūtatsu, as well as various guidelines, manuals, and FAQs issued by administrative agencies. These are primarily internal directives or interpretations. They do not, in themselves, create new legal rights or obligations for the public. Their "bindingness" or legal relevance for the public is more indirect and flows from:
    • Their utility in signaling how agencies are likely to interpret and enforce actual laws and legally binding regulations.
    • The potential for reliance on long-standing practices reflected in or informed by them to be protected under principles of good faith or legitimate expectations, particularly concerning the fairness of imposing penalties for past conduct (as seen in the Stock Option Taxation Case).
    • Their use by courts as evidence of reasonable administrative practice or as a benchmark for reviewing the consistency and rationality of an agency's exercise of discretion (as indicated in the Mitsubishi Taxi Case and the Liquor Sales License Case (Supreme Court, July 16, 1998; related to case 6-10[B]), where rational standards set forth in a tsūtatsu meant that administrative dispositions conforming to them were, in principle, considered lawful).

Conclusion

The legal bindingness of administrative standards in Japan presents a spectrum rather than a simple dichotomy.

  • Public Notices (Kokuji): These can be fully legally binding on the public if they constitute a valid exercise of delegated legislative power (e.g., setting specific regulatory standards or detailed educational guidelines based on clear statutory authority) or if the kokuji itself functions as an administrative disposition directly affecting legal rights.
  • Circulars (Tsūtatsu): These are generally considered internal administrative directives and are not directly legally binding on the public or the courts. However, they exert significant practical influence. They guide the actions of administrative officials, leading to more predictable agency behavior. If their content accurately reflects the correct interpretation of the law, administrative actions based on them will likely be upheld. Conversely, unannounced or unfair deviations by an agency from established practices that could have been (or were) shaped by tsūtatsu may affect the legality or fairness of imposing penalties or other disadvantages on businesses that relied on those prior practices. Furthermore, rational tsūtatsu that structure agency discretion can serve as important reference points for courts when reviewing the consistency and reasonableness of discretionary administrative decisions.

For businesses operating in Japan, navigating this landscape requires careful attention. While a tsūtatsu might not be "law" in the strictest sense that can be directly enforced against a business in court, ignoring it can be perilous if it accurately reflects how an agency intends to interpret and enforce actual legal obligations. Conversely, relying blindly on an outdated, unpublished, or legally incorrect tsūtatsu offers no ultimate protection if it conflicts with the law itself. The key is always to scrutinize the underlying statutory and regulatory authority for any administrative standard encountered and to understand its specific function and intended audience within the Japanese legal system.