Tobita & Partners provides high quality legal advice and assistance to Japanese, foreign and foreign-based corporations and individuals.

I found a very interesting article in theNikkei newspaper evening publication dated July 12, 2018.

(Quotation from the article)

It appears that on the 12th, Hyogo prefectural police seized cryptocurrency equivalent to about 3,800 yen from a 59 year old man in the sameprefecture who was repeated delinquent in the payment of parking fines.According to the prefectural police traffic guidance section, this was thefirst time in the country where crypto currency was seized in relation to a parkingviolation.


Orders for seizure are normally levied on salariesor bank accounts, but the man in this case had no bank deposits or savings, andhis occupation was unknown, so the police seized his crypto currency. If he doesnot pay the relevant amount by the end of July, the dealer will exchange his cryptocurrency for cash at the current rate, and give such amount to the prefecturalpolice.

(end of quotation)


From the last sentence, I understand that theyseized crypto currency from an account that he opened at a crypto currencyexchange. Such seizure is similar to a seizure from a traditional depositsavings account, because remittance of crypto currency from the account can be stoppedby obtaining a court notice of seizure, which will be issued to the exchange.Therefore, although there are some theoretical problems, such seizure can inprinciple be carried out.


However, I am wondering about the case wherethe debtor does not deposit the crypto currency in the exchange's account, butputs the crypto currency in his own account (crypto currency wallet) that hemade by himself. Strictly speaking, a ‘crypto currency wallet’ is software thatmanages the password required for remitting crypto currency, and a wallet can easilybe made using a PC or smartphone. The password in a wallet gives orders to computersin different locations around the world which hold crypto currency information,in order to remit crypto currency to someone. As an example, rather than likehaving money in a bank account, this is more like the situation where you havecash in your own wallet. There is no third party such as an exchange, so acourt cannot deliver a seizure notice to a third party in respect of cryptocurrency.


In practice, can cash be seized from a debtor,utilizing a court execution officer? Of course the answer is yes. However, sincecrypto currency does not exist as a thing, even if you took a court executionofficer to the house of the debtor, the officer could not seize cryptocurrency. It may be possible if the debtor voluntarily told the officer therelevant password to the crypto currency wallet. But failing that, neither acourt nor creditors could obtain the debtors crypto currency. If a debtor has cryptocurrency in his own account (crypto currency wallet), we cannot use the usefullegal tool of ‘seizure’, and this raises some serious issues.


For example, consider the case of a debtorwho has been issued a court order to pay hundreds of millions of dollars. What ifhe converts his money into a crypto currency and transfers the money into acrypto currency wallet, instead of keeping the money in a crypto currency exchangeaccount? By such means he could escape ‘seizure’ and thereby avoid creditors.  Currently there are premium sushi shops Ginza,as well as luxury hotels and home electronics shops, etc., which allow paymentin crypto currency.  Our debtor couldcarry on a life of luxury, even with an outstanding court order to pay creditorshundreds of millions dollars.  As isplainly clear, this would be a terribly unfair outcome.


I believe that a new law must introducedwhich provides criminal penalties for debtors who conceal funds held in cryptocurrency.


Whatdo you think?

Do you know the rules of a conversion from a fixed-period worker to a non-fixed-period worker on labor contracts?

This is a newly stipulated rule in Article 18 of the 2012 revision of the Labor Contract Act.To briefly explain, this rule means that if a fixed-period labor contract is repeatedly renewed with the same employer for more than five years, the worker (for example, contract employee, part-timer worker, temporary employee etc.) has the right to a non-fixed labor contract. For example, if the contract period is one year, after the 5th renewal, the right to apply for the conversion applies. If he or she makes an application for a non-fixed labor contract, his or her employer cannot refuse the application. In other words, a non-fixed-term labor contract will be established.

Why was such a strange and complicated rule made?

In Japan, until about 30 years ago, with the background of high economic growth, the idea of viewing a company as a family was strong. So most people worked in the same company for their whole life. A seniority-based personnel system was mainstream. For that reason, most labor contracts had no fixed-period. The Japanese people and the Japanese court also eventually endorsed this system by almost never accepting the dismissal of non-fixed-period workers.

However, after that, the growth of the Japanese economy slowed down and Japanese companies no longer had the financial strength to hire many non-fixed-period workers who could not be dismissed in principle. For that reason, the number of fixed-period workers has gradually increased. Currently, 37.5% of all workers are fixed-period workers.

The problem is that for fixed-period workers, there is always the possibility of losing their jobs when their contract expires and is not renewed. Furthermore, in general, the salary of fixed-period workers is lower than non-fixed-period workers in spite of doing the same work. Fixed-period workers are sometimes subject to discrimination in the workplace by non-fixed-period workers (regular employees) calling them “irregular employees”.

Therefore, in order to upgrade fixed-period workers to non-fixed-period workers, such rules were revised 2012.

There was some opposition to this revised rule, as follows. Since the difficulty of firing non-fixed-period workers is one of the reasons for the increase of fixed-period workers, making such a rule without addressing this difficulty would make the rule ineffectual. For example, there is the risk that companies will terminate labor contracts before reaching five years ('stopping employment').

However, due to the effects of an aging society in Japan now-a-days, the number of workers has decreased. Companies are now suffering from a shortage of workers. So some companies have switched from offering fixed-period labor contracts to non-fixed ones in order to attract new employees. So the aforementioned 'stopping employment' has not became a social problem at this time.

The period of five years in this conversion rule will be calculated from April 1, 2013. So there are fixed-period workers who can apply for the conversion from as soon as April 1, 2018, next year. With this rule, companies that hire fixed-period workers should pay attention to the following points:

(1) Confirm whether or not there will be a fixed-period worker who acquires the conversion right after April 1, 2018.

(2) Before a fixed-period worker exercises the indefinite conversion right, consider what will be the contractual relationship between the company and this worker.

According to Article 18 of the Labor Contract Act, in principle, if a fixed-period worker exercises the conversion right, the terms of the previous labor contract should be carried over to the new contract, the only change being that the fixed-period becomes a non-fixed-period. In other words, if the worker goes to the office 3 days a week, this will not change. The salary also remains the same. However, if employer make a new employment rule that is applied to those who exercised the conversion right in advance, the terms of that new rule exceptionally become the conditions between employer and them. Therefore, if an employer wants different terms to be applied to them regarding working days, working time, overtime and relocation or so on, he or she needs to make a new employment rule.

Regarding this conversion rule, preparation is important. We recommend you prepare as soon as possible for those who have not yet applied for the conversion.


Our office is located in Ginza, which is known for being the most luxurious area of Japan. There are many popular department stores and brand outlets here. However, if you venture into the backstreets of Ginza, you will find some restaurants (mostly Chinese restaurants) that allow their guest to smoke, even during lunch time.

Also, not only in Ginza, but all over Japan, most Izakayas (Japanese-style bars) do not prohibit smoking. Actually, we often go to an Izakaya at night with our clients, colleagues or friends. As some Izakayas serve a lot of cheap food, some guests come there with their families (including their children) to have casual dinners. But most of the Izakayas allow guests to smoke. So when we go to an Izakaya, we need to be aware that we will be exposed to cigarette smoke.

Why is this terrible situation occurring in Japan?

This is because in Japan, there is no strict legal restriction regarding smoking in restaurants and bars.

It is true that Article 25 of the Health Promotion Law stipulates as follows.

Those who manage facilities such as schools, gymnasiums, hospitals, theaters, exhibition halls, meeting places, exhibition halls, department stores, offices, government agencies, eating and drinking places, and other facilities that are used by many people, must endeavor to take the necessary measures to prevent passive smoking (which means to be forced to smoke others' tobacco smoke in indoor or similar environments).

However, this article stipulates only an "obligation to endeavor to take the necessary measures" (not an "obligation to take the necessary measures"). Therefore, there is no penalty for those who do not take any measures to prevent passive smoking.

Now, the Japanese government is trying to ban smoking in facilities that a large number of people use in principle by revising this law, but even now since there are many people who want to smoke in restaurants and bars (especially men in their 40s and 50s; almost 40% of them are smokers). Since dissenting opinions are also strong, the ban cannot be easily established.

Yet, recent good news has emerged. On September 8, Governor Yuriko Koike of Tokyo announced that Tokyo is trying to establish a regulation that bans smoking in public facilities, including restaurants and bars in principle. This excepts only the restaurants and bars that meet all of following items:

(1) The area is less than 30 square meters.

(2) They do not use any employees, or all employees agree to work in smoky conditions.

(3) Children do not enter there.

(4) Posting that they allow smoking.

If this Tokyo Metropolitan Ordinance is enacted, I will no longer have to go to an Izakaya or restaurant where I will have cigarette smoke blown into my face. I hope that this ordinance is established at once.