Plea bargaining: coming to Japan June 2018

A new regime of plea bargain style cooperation agreements will come into force in Japan this June, in a further instalment to reforms of the Japanese Criminal Procedure Code. The Japanese scheme provides a notable contrast to the regime in the UK and is a notable concern for those doing business in Japan or involved in investigations with a Japanese element.

Under the “New System”, Japanese prosecutors will be able to enter into cooperation agreements with individuals or corporations who are suspects or defendants in relation to particular types of offences. Those offences include bribery, embezzlement and fraud, as well as offences related to tax and financial products.  Deferred Prosecution Agreements (“DPAs”) in the UK are only available to companies.

In order to benefit from such agreements in Japan, the suspect or defendant will need to give a statement to the prosecution that implicates a third party, whether in connection with the same wrongdoing or in connection with an unrelated matter. Notably, unlike DPAs in the UK, cooperation agreements will not be available for reporting on one’s own misconduct.

In addition to providing a statement to the prosecutor, the suspect or defendant may be required to testify in court and to provide evidence to substantiate their claims. To further safeguard against self-serving accusations, it will be a criminal offence to abuse the system, such as by providing false testimony. On the other hand, the New System will afford the suspect or defendant the benefit of being accompanied by defence lawyers during negotiations on the deal, and the defence lawyer will need to co-sign the final agreement.

If acceptable cooperation is offered, the prosecution can recommend that a more lenient penalty be imposed by the court. Alternatively, the prosecution may modify or even dismiss the charges.

These changes will plainly have significant implications for those doing business in Japan and those involved in investigations which are multi-jurisdictional and have a Japanese element. Although DPA-type self-reporting will not prompt a cooperation agreement under the New System, corporates should reinforce their compliance and monitoring regimes so that they can anticipate any potential allegations that employees might make in seeking a cooperation agreement for themselves.

Notably, however, cooperation agreements such as those due to come into force in Japan are not necessarily capable of being replicated in the UK, given that DPAs are only available to corporate entities and since British prosecutors do not have the same powers to recommend sentences to a court.