Q: Enforcing the Rules: How Does the Japanese Government Ensure Compliance with Administrative Regulations and What Penalties Apply?

Japanese Attorney at Law - Bengoshi L.L.

• 11 min read

For any system of administrative regulation to be effective, government bodies must have mechanisms to ensure that individuals and businesses comply with their legal duties and the terms of administrative decisions. In Japan, a range of tools are available to administrative authorities to secure the performance of obligations and to sanction non-compliance. These can broadly be categorized into administrative compulsory execution (direct enforcement of duties), administrative penalties (for past violations), and other supplementary measures. Understanding these enforcement mechanisms is crucial for businesses to appreciate the potential consequences of non-compliance.

Part I: Ensuring Performance of Duties – Administrative Compulsory Execution (行政上の強制執行 - Gyōsei-jō no Kyōsei Shikkō)

Administrative compulsory execution refers to the direct enforcement by administrative authorities of obligations imposed by administrative law or specific administrative acts, typically without needing to first obtain a judgment from an ordinary court. This power is a significant feature of administrative law, allowing for more expeditious enforcement of public duties compared to relying solely on standard civil execution procedures. However, its use is strictly governed by law.

A key principle is that compulsory execution presupposes a pre-existing, unfulfilled legal duty on the part of the individual or business. This duty might arise directly from a statute or ordinance, or from a specific administrative act (like an order to demolish an illegal structure).

The legal framework for administrative compulsory execution in Japan shifted significantly after World War II. The pre-war Administrative Execution Act provided broad, general powers for various types of enforcement. This was abolished, and contemporary law is more restrictive:

  • The Administrative Vicarious Execution Act (AVEA - 行政代執行法 Gyōsei Daishikkō Hō) is the main general law, but it only authorizes one type of execution: vicarious execution.
  • Other methods of direct compulsory execution for non-monetary duties generally require specific authorization in individual statutes.
  • The National Tax Collection Act (国税徴収法 - Kokuzei Chōshū Hō) provides a comprehensive framework for the compulsory collection of national taxes and serves as a model that is often incorporated by reference into other laws for the collection of various public monetary obligations (e.g., social insurance premiums, administrative fines).

A point of legal debate has been whether administrative bodies can utilize standard civil execution procedures (which require court involvement) when specific administrative enforcement tools are lacking for a particular type of public duty. While some older case law was restrictive (e.g., Supreme Court, February 23, 1966, concerning an agricultural cooperative's attempt to use civil procedures when tax-like collection powers existed), the modern landscape is nuanced. The Takarazuka Pachinko Ordinance case (Supreme Court, July 9, 2002) limited a local government's ability to independently seek civil injunctions to enforce its public regulatory ordinances without specific statutory authorization allowing such recourse to civil courts. This distinguished the enforcement of public duties from the assertion of a local government's proprietary or contractual rights. However, the enforceability of specific contractual commitments, even with public entities, through civil means remains, as affirmed by the Supreme Court on July 10, 2009, in a case upholding a civil action to enforce a pollution prevention agreement.

Key Methods of Administrative Compulsory Execution:

  1. Vicarious Execution (代執行 - Daishikkō)
    • Application: This is used when a person or business fails to perform an "alternative obligatory act" (代替的作為義務 - daitai-teki sakui gimu) – a duty to do something that another party can physically perform in their stead.
    • Classic Example: Demolishing an illegally constructed building, removing an unlawful obstruction from public land, or restoring a site to its original condition after an unauthorized alteration.
    • Legal Basis: Primarily the Administrative Vicarious Execution Act (AVEA).
    • Procedure (AVEA Arts. 3-6):
      • A formal order must first be issued requiring the performance of the act.
      • If there is non-compliance, the administrative agency must issue a written warning (kaikoku - 戒告), specifying a reasonable new deadline and stating that if the duty is not met by then, vicarious execution will be carried out.
      • If compliance is still not forthcoming, the agency issues a written notice (tsūchi - 通知) detailing the specifics of the execution (e.g., the time of execution, the responsible official, the estimated cost).
      • The agency then either performs the act itself or commissions a third party to do so.
      • The costs incurred for the vicarious execution are then collected from the original obligor. If unpaid, these costs can be collected using the same compulsory procedures as for national taxes.
    • Conditions for Use (AVEA Art. 2): Vicarious execution is permissible only when (a) other means of securing performance are difficult, and (b) leaving the non-performance unaddressed would be significantly contrary to the public interest. The decision to initiate vicarious execution, even if these conditions are met, often involves administrative discretion. The warning and notice are considered reviewable administrative acts.
  2. Execution Fines / Penalties for Non-Performance (執行罰 - Shikkō Batsu)
    • Nature: This is a method of indirect coercion. A monetary penalty is imposed repeatedly, or threatened to be imposed, to create psychological pressure on an individual or business to comply with a non-alternative duty to act (a duty only they can perform) or a duty not to act (e.g., to cease an illegal operation). It is not a punishment for a past violation but an incentive for future compliance.
    • Current Status in Japan: This tool is largely obsolete in current Japanese administrative practice. While the pre-war Administrative Execution Act contained general provisions for execution fines, the primary remaining example in current national law is a provision in the Sabō Act (Erosion Control Act, Art. 36), which stipulates very low penalty amounts, rendering it practically ineffective. There is no general statute authorizing execution fines.
  3. Direct Compulsion (直接強制 - Chokusetsu Kyōsei)
    • Nature: This involves the direct application of physical force by administrative authorities against persons or their property to achieve the performance of an administrative duty when other means (like vicarious execution or execution fines) are ineffective or not feasible.
    • Legal Basis: There is no general law authorizing direct compulsion in Japan. Its use requires specific, explicit authorization in individual statutes. Such authorizations are rare in contemporary Japanese law due to concerns about its high potential for infringing fundamental rights, stemming from pre-war experiences.
    • Examples: Article 3 of the Act on Special Measures Concerning Narita International Airport Security allows authorities to, among other things, seal off structures that are being used to obstruct airport operations, after a non-compliance with an order to cease such use.
    • There's a theoretical concern that some duties could be framed by statute in such a way that their enforcement resembles direct compulsion but is characterized as "immediate coercion" (sokuji kyōsei), which operates without a prior unfulfilled obligation.
  4. Compulsory Collection of Monetary Obligations (強制徴収 - Kyōsei Chōshū)
    • Application: This is used to collect unpaid monetary obligations owed to public administrative bodies. This is highly relevant for businesses concerning taxes, social insurance contributions, and various administrative fees or levies.
    • Legal Basis and Procedure: The National Tax Collection Act provides the comprehensive general framework and detailed procedures. Many other laws that impose monetary obligations (e.g., local tax laws, social insurance laws, laws providing for administrative fines, and even the AVEA for collection of execution costs) adopt the procedures of the National Tax Collection Act by reference. The typical process involves:
      • A formal notice of payment due (nōzei no kokuchi - 納税の告知), specifying the amount and deadline.
      • If payment is not made by the deadline, a formal demand for payment (tokusoku - 督促) is issued.
      • If the obligation remains unpaid after the demand, the tax authority (or other relevant agency) can initiate procedures to seize the obligor's assets (sashiosae - 差押え).
      • Seized assets are then converted to cash, typically through public sale (kōbai - 公売) or other legally permitted methods of sale.
      • The proceeds are then distributed (haitō - 配当) to satisfy the public claim (and any other prioritized claims).

Part II: Sanctioning Non-Compliance – Administrative Penalties (Gyōsei Batsu - 行政罰)

Administrative penalties are sanctions imposed for past violations of administrative laws, regulations, or duties. Their primary purpose is to punish wrongdoing and deter future violations, rather than to directly compel performance of the original duty (though they serve as an indirect incentive for compliance).

Japanese law distinguishes between two main categories of administrative penalties:

1. Administrative Criminal Penalties (行政刑罰 - Gyōsei Keibatsu)

  • Nature: These are genuine criminal sanctions, such as fines (罰金 - bakkin), imprisonment (懲役 - chōeki / 禁錮 - kinko), etc., that are stipulated in administrative statutes for more serious violations of administrative law (e.g., operating a hazardous facility without a crucial safety license, illegal waste dumping, serious violations of food safety laws).
  • Procedure: Their imposition follows the standard criminal justice process:
    • Investigation by police or other specialized law enforcement officials (sometimes initiated by a formal complaint - kokuhatsu - 告発 from the relevant administrative agency).
    • Prosecution by public prosecutors.
    • Trial in a criminal court, where general principles of criminal law (e.g., presumption of innocence, requirement of intent or negligence unless strict liability is clearly specified by the statute) apply.
  • Vicarious Liability for Corporations (Ryōbatsu Kitei - 両罰規定): Many administrative statutes that carry criminal penalties include "dual liability provisions." These provisions hold not only the individual employee who committed the violation but also their employer (the corporation or business entity) criminally liable (usually through fines), provided the corporation failed to exercise due diligence in supervising its employees.
  • Special Summary/Simplified Procedures:
    • Traffic Infractions: Minor traffic violations under the Road Traffic Act are often handled through a system of non-penal administrative "infraction fines" (hansokukin - 反則金). If the offender voluntarily pays this infraction fine within a specified period after receiving a notification (the "blue ticket" system), criminal prosecution for that minor offense is typically avoided.
    • "Notification Dispositions" (Tsūkoku Shobun - 通告処分): Under laws like the Customs Act or certain tax evasion control laws, for specific offenses, the customs or tax authorities may issue a "notification disposition." This involves notifying the alleged offender of the violation and offering them the option to pay a sum equivalent to a fine. If this sum is paid, formal criminal prosecution is usually averted. The Supreme Court, in a judgment on July 15, 1982, held that such a tsūkoku shobun itself is not an "administrative disposition" subject to revocation litigation under the ACLA; rather, non-payment simply leads to the initiation of ordinary criminal proceedings.

2. Administrative Non-Criminal Fines / Order Fines (行政上の秩序罰 - Gyōsei-jō no Chitsujo Batsu)

  • Nature: These are monetary penalties imposed for relatively minor breaches of administrative order or procedural duties (e.g., failure to file a required report on time, minor violations of public facility usage rules). They are not considered criminal punishments, and the general provisions of the Penal Code do not apply. Their purpose is primarily to maintain administrative order.
  • Imposition:
    • By Courts: Some chitsujo batsu are imposed by courts (often summary courts) through non-contentious case procedures (hishō jiken tetsuzuki - 非訟事件手続), which are simpler and less formal than full criminal trials.
    • By Administrative Authorities (especially Local Governments): Significantly for businesses, the heads of local public entities (governors, mayors) are often empowered by the Local Autonomy Act (Articles 14(3) and 15(2)) and specific local ordinances or regulations to impose chitsujo batsu (also referred to as karyō - 過料) as administrative dispositions for violations of those local rules. These administratively imposed fines are subject to administrative appeal and judicial review (as administrative dispositions).

Part III: Other Means of Ensuring Administrative Effectiveness

Beyond direct compulsory execution and formal administrative penalties, a range of other measures are employed to ensure compliance and administrative effectiveness:

  1. Administrative Sanction Dispositions (行政上の制裁処分 - Gyōsei-jō no Seisai Shobun):
    • Nature: These are adverse administrative acts imposed as a sanction for past violations of administrative duties or conditions attached to beneficial acts (like licenses). They often involve the revocation or suspension of previously granted licenses, permits, or other beneficial legal statuses, or the imposition of new disadvantageous conditions on business operations.
    • Examples: Suspension or revocation of a driver's license for repeated or serious traffic violations (Road Traffic Act Art. 103); temporary suspension of business operations or revocation of a permit for a restaurant that has caused a food poisoning incident (Food Sanitation Act Art. 55); debarment from participation in public procurement bids for companies involved in bid-rigging.
    • Procedural Requirements: As these are typically "adverse dispositions" (furieki shobun - 不利益処分) that significantly impact the rights and interests of businesses, their imposition is subject to the procedural safeguards of the Administrative Procedure Act, such as prior notice, an opportunity for a hearing (chōmon) or to submit an explanation (benmei no kikai).
    • Proportionality: The severity of the administrative sanction must be proportionate to the gravity of the underlying violation.
    • Relationship to Criminal Penalties: Administrative sanctions can generally be imposed alongside criminal penalties for the same conduct, as their primary purposes are seen as different (administrative sanctions often aim at ensuring future fitness to operate or restoring public order, while criminal penalties focus on punishment and general deterrence).
  2. Surcharges (Kachōkin - 課徴金) and Additional Taxes (Kasanzei - 加算税):
    • Kachōkin (Surcharges): These are significant monetary levies primarily designed to disgorge unjust profits obtained from illegal activities, particularly in the realm of economic regulation, and to deter such conduct. A prominent example is the surcharge imposed under the Antimonopoly Act (Article 7-2) for illegal cartels, bid-rigging, or other unfair trade practices. The Supreme Court (judgment of October 13, 1998) has held that the imposition of kachōkin and criminal fines for the same anticompetitive conduct does not violate the constitutional prohibition against double jeopardy (Article 39 of the Constitution), reasoning that their purposes are distinct (the kachōkin being an administrative measure to restore fair competition and remove illegal gains, rather than a purely punitive criminal sanction).
    • Kasanzei (Additional Taxes): These are additional amounts of tax imposed as administrative penalties for various types of non-compliance with tax laws, such as failure to file tax returns, underreporting of income, or failure to properly withhold taxes at source (as stipulated in Articles 65-68 of the National Tax General Act). Similar to kachōkin, the Supreme Court (judgment of April 30, 1958) found no double jeopardy issue with the concurrent imposition of these additional taxes and criminal fines for tax evasion, viewing the former as administrative measures to ensure proper tax collection and the latter as punishment for culpable conduct.
  3. Public Disclosure of Information / "Naming and Shaming" (公表 - Kōhyō):
    • Administrative agencies may publicly disclose information about businesses' non-compliance with regulations or violations of law as a means to encourage adherence or to warn the public. This can be a powerful tool due to the potential impact on a company's reputation.
    • Legal Basis and Fairness: If such public disclosure is likely to significantly disadvantage a specific business, particularly if it functions as a de facto sanction, a clear legal basis for the disclosure is generally considered necessary. Procedural fairness would also suggest that the affected business should have an opportunity to be heard or to correct any inaccurate information before adverse public disclosure. The principle of proportionality also applies: the disclosure should not be excessive, misleading, or disproportionate to the public interest served.
  4. Withholding of Unrelated Benefits (給付の留保 - Kyūfu no Ryūho):
    • This refers to the practice where an administrative agency might attempt to pressure a business into complying with administrative guidance or an unrelated regulatory requirement by threatening to withhold, or actually withholding, an unrelated benefit (e.g., refusing to issue a separate permit, denying a subsidy, or even refusing essential utility services like water supply).
    • Legality: This practice is generally considered highly problematic and often unlawful in Japan. The Administrative Procedure Act emphasizes that compliance with administrative guidance should be voluntary (Art. 32(2) prohibits disadvantageous treatment for non-compliance) and that guidance should not be used to obstruct a party's application rights (Art. 33). The Supreme Court (judgment of November 8, 1989) held that a municipality could not refuse to supply water to a new development project solely because the developer had failed to comply with non-statutory administrative guidance on development matters. Withholding essential services or unrelated benefits to coerce compliance in other areas is generally viewed as an abuse of administrative power, permissible only in very limited "just cause" scenarios that are directly and intrinsically linked to the benefit being sought (e.g., refusing water supply if providing it would immediately endanger public health or safety due to the applicant's actions, or in genuine cases of extreme, unavoidable resource shortages directly impacting the ability to provide that specific service).

Conclusion: A Spectrum of Enforcement

The Japanese government possesses a spectrum of tools to ensure administrative effectiveness, ranging from direct compulsory execution of duties to various forms of administrative penalties and other sanctioning measures. While direct physical compulsion for non-monetary obligations (other than vicarious execution) is relatively rare due to restrictive legal frameworks, administrative penalties (both criminal fines and non-criminal administrative fines) and adverse administrative dispositions like license revocations or surcharges play a significant role in the enforcement landscape.

For businesses, a clear understanding of these mechanisms is vital. This includes knowing the specific legal obligations that apply to their operations, the procedures that administrative authorities must follow when seeking to enforce these obligations or impose penalties, the potential consequences of non-compliance, and the avenues available for challenging improper or unlawful enforcement actions. Proactive compliance programs, coupled with a readiness to seek legal counsel when faced with significant enforcement measures, are key components of navigating Japan's complex but structured regulatory environment.