[Home](/)/[Resources](/resources)/Japan Economic Security Supply Chain JapanSupply chain guide # Japan Economic Security Promotion Act: What Electronics Companies Need to Know Japan's Economic Security Promotion Act addresses supply chain resilience, critical infrastructure protection, sensitive R&D, and patent secrecy across four coordinated policy pillars. For electronics hardware companies — especially those in semiconductors, batteries, or critical infrastructure supply chains — ESPA creates new government interactions, enhanced scrutiny for hardware procured by Japanese critical infrastructure operators, and potential access to significant supply chain diversification subsidies. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Fjapan-economic-security-supply-chain) At a glance Law ESPA (経済安全保障推進法, 2022) Key categories Semiconductors, batteries, rare earths Patent secrecy Dual-use electronics (new) Support Supply chain diversification subsidies ## ESPA provisions for electronics supply chains ### Japan's Economic Security Promotion Act (ESPA) Japan's Economic Security Promotion Act (経済安全保障推進法, ESPA), enacted in 2022 and progressively entering into force, is a landmark law addressing supply chain vulnerabilities, critical infrastructure protection, sensitive technology development, and patent secrecy orders. The Act reflects Japan's recognition that economic security — including reliable supply of critical goods — is inseparable from national security. For the electronics industry, ESPA's supply chain provisions and the designation of 'specified critical goods' are the primary compliance considerations. ### Specified critical goods and supply chain resilience ESPA designates categories of goods as 'specified critical goods' whose stable supply is considered essential to national security. The initial designations include semiconductors, batteries, rare earths, pharmaceutical materials, and certain medical devices. For companies in these supply chains, ESPA creates a framework for government support for supply chain diversification — including subsidies for companies investing in Japan-domestic production or in stockpiling arrangements. For electronics OEMs, being a supplier of designated critical goods may create both compliance obligations and access to government support. ### Critical infrastructure operators and security requirements ESPA designates critical infrastructure sectors (including telecommunications, electricity, gas, finance, and transportation) and requires operators in those sectors to notify the government before introducing specified facilities or equipment — particularly equipment that could pose security risks from foreign suppliers. For electronics hardware companies that supply IT and communications equipment to Japanese critical infrastructure operators, this creates a new layer of due diligence scrutiny: operators must assess and disclose the provenance and security of hardware and software they procure. ### Patent non-disclosure (invention secrecy) orders ESPA established Japan's first patent secrecy order system — patent applications that disclose technology with national security sensitivity can be designated as non-disclosure orders (特許出願非公開制度), preventing public publication and international filing until the government completes its security review. This affects foreign companies filing patents in Japan that relate to dual-use electronics technologies, advanced sensing, military-applicable communications, or other security-sensitive fields — ESPA screening adds time to the Japan patent process for affected applications. ## ESPA compliance and engagement steps 01 Assess whether your products fall within the categories of 'specified critical goods' under ESPA — semiconductors, batteries, rare earth materials, and communications equipment are particularly relevant for electronics hardware — and determine whether being in this supply chain creates government reporting or support programme eligibility. 02 If you supply electronics hardware to Japanese critical infrastructure operators (telecoms, utilities, transport, finance), assess whether your equipment falls within the 'specified facilities and equipment' category requiring advance notification under ESPA — engage directly with your Japanese operator customers about their notification obligations. 03 Review your Japan patent filing strategy in light of ESPA's invention secrecy order provisions: if your innovations could be classified as security-sensitive (dual-use electronics, advanced communications, military-applicable sensing), factor potential secrecy order delays into your Japan patent timeline and international filing strategy. 04 Monitor ESPA's progressive implementation: the law phased in its various provisions over 2022–2025 — check Japan's Cabinet Office and Ministry of Economy, Trade and Industry (METI) guidance for the current status of specific provisions relevant to your sector. 05 Evaluate eligibility for ESPA-linked supply chain diversification subsidies: METI administers support programmes for companies investing in Japan-domestic production or supply chain resilience for designated critical goods — these can provide significant financial support for electronics components and battery manufacturing in Japan. 06 For connected devices and IoT hardware sold in Japan, assess whether your products could be implicated in critical infrastructure security assessments — as critical infrastructure operators in Japan review their supply chain security under ESPA, foreign-made hardware may face enhanced scrutiny. 07 Engage a Japan government affairs adviser if you are in a designated critical goods sector or supply critical infrastructure in Japan — ESPA creates ongoing policy interactions between regulators and industry that are best navigated with specialist government relations support. ## Frequently asked questions ### Does ESPA apply to foreign electronics companies without a Japan entity? ESPA's supply chain resilience provisions primarily apply to Japanese operators and companies receiving government support. However, the critical infrastructure equipment provisions apply to Japanese critical infrastructure operators — who in turn impose requirements on their suppliers including foreign companies. If your hardware is procured by a Japanese critical infrastructure operator, their ESPA obligations effectively reach your supply chain through procurement requirements even if you have no Japan entity. ### What are the 'specified critical goods' and which electronics categories are included? As of 2025, Japan has designated 11 categories of specified critical goods under ESPA cabinet orders: semiconductors, batteries (including secondary batteries), rare earth magnets, machine tools and industrial robots, aircraft components, maritime transport vessels, cloud computing, antibiotics, pharmaceuticals (APIs), medical devices, and fertilisers. Semiconductors and batteries are the most directly relevant to electronics hardware companies. The designation list can be updated — monitor METI announcements for additions. ### How do ESPA patent secrecy orders work in practice? Patent applications filed in Japan that contain technology potentially sensitive to national security are screened by the JPO (Japan Patent Office) and referred to a government security review process under ESPA. If a secrecy order is issued, the application is not published (unlike standard applications which publish after 18 months), and the applicant cannot file in other countries based on that application while the secrecy order is in force. Secrecy orders can be maintained for a year (renewable) and the applicant receives compensation for lost business opportunity. The affected technology categories are defined by government ordinance and include advanced dual-use electronics. ### Is ESPA similar to the US CHIPS Act or European critical infrastructure frameworks? ESPA has elements in common with multiple frameworks: the supply chain resilience and subsidy provisions are similar in intent to the US CHIPS Act (domestic production support for semiconductors and critical goods); the critical infrastructure protection provisions parallel EU NIS2 and US CISA frameworks; and the patent secrecy orders mirror similar provisions in the US (35 U.S.C. § 181) and other jurisdictions. What is distinctive about ESPA is its scope and integration — it addresses all four dimensions (supply chains, infrastructure, R&D, patents) in a single act, creating a comprehensive economic security framework. **Disclaimer:** Educational resource only. ESPA implementation is ongoing with new cabinet ordinances and METI guidance. 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