42JAPAN LAWYERS GUIDE 2018/19Even before the amendment, certain cross-border M&A transactions were subject to a pre-notication ling, but the sale and purchase of shares of a non-listed Jap-anese company between foreign shareholders had been excluded from such notication requirements. Under the amendment, such share transfers of non-listed Japa-nese companies in certain industries between the foreign shareholders have become subject to the pre-notication ling. e government may now review such transac-tions and, if necessary, the government may recommend or order discontinuation or change of such transactions.M&A pracces relang to an-corrupon regula-onsAs described above, we are still seeing a strong trend of out-bound investments by Japanese companies into emerging markets including ASEAN countries. Expan-sion into these new markets has heightened concerns about potential corruption and other compliance risks, which have begun to have an impact on outbound M&A transactions. For example, Japanese companies have in-creased their focus on compliance issues in the conduct of M&A due diligence. e Japanese government has also begun looking more closely at corrupt practices involving Japanese companies and foreign ofcials. In 2014, the Tokyo District Public Prosecutor’s Ofce in-dicted a Japanese railway consulting rm and its exec-utives on charges of making illegal payments to ofcials in Vietnam, Indonesia and Uzbekistan. In July 2015, METI published an amendment to the “Guideline to Prevent Bribery of Foreign Public Ofcials”, and also in July 2016, the Japan Federation of Bar Association pub-lished the “Guidance on Prevention of Foreign Bribery”. In this very active situation relating to anti-corruption practices in Japan, we expect to see further developments in M&A practice from the perspective of compliance with anti-corruption policies.Amendment of M&A-related taxaonere were several M&A-related tax amendments in 2017 and 2018, which will potentially have a signicant impact on M&A structuring. Among others, there were amendments to the taxation of: (a) a squeeze-out trans-action; (b) a spin-o transaction; and (c) a share-to-share tender oer transaction. Due to these amendments, we will have broader structuring options for squeeze-out transactions, and we may also newly be able to conduct a tax-free spin-out transaction under certain conditions. Additionally, we will be able to enjoy a tax deferral in a share-to-share tender oer transaction under certain conditions. Since a share-to-share tender oer has not been used mainly for tax reasons, this amendment to tax law will likely result in the use of this type of transaction in the near future.Representaons and warranes insuranceRepresentations and warranties insurance is a relatively new topic on the Japanese M&A scene. is insurance is infrequently used in Japanese M&As, except for certain cross-border M&As. But recently Japanese insurance companies have started to actively provide representa-tions and warranties insurance in Japan. Also, in recent Japanese M&A practice, we have started to see transac-tions where the representations and warranties provided by the seller are limited compared to previous practice, and buyers are seeking alternative protection. As a re-sult, this insurance is becoming much more common, and will become more widespread even in domestic M&As. Since this insurance is relatively new in Japan, practitioners face practical or legal issues in introducing it under the Japanese M&A legal framework and prac-tice. But we believe that representations and warranties insurance will become an important tool to hasten nego-tiations between sellers and buyers.The year aheadOverall M&A trends Given the current Japanese economic conditions and intensi ed global competition, coupled with the abun-dant cash reserves of Japanese companies, we believe that outbound M&A activities will continue to grow strong-ly, with particularly strong growth in outbound deals into Asian countries. Outside Asia, North America and Europe are likely to continue to be favourite destinations but increasingly, Latin American countries and African countries are also being added to the mix. Amendment of the Companies Act; the Corporate Governance CodeAs discussed above, the Additional Amendment of the

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