The emerging space-related private sector in Japan and the legal framework: background and recent updates on space policy

Takashi Nakazaki

Anderson Mori & Tomotsune, Tokyo

takashi.nakazaki_grp@amt-law.com

Tomoki Yamada

Anderson Mori & Tomotsune, Bangkok

tomokitdy.yamada@amt-law.com

Itaru Hasegawa

Anderson Mori & Tomotsune, Tokyo

itaru.hasegawa@amt-law.com

For the past few years, Japan has witnessed significant developments within the domain of space-related projects, especially in the private sector. Particularly since 2018 – the landmark year in which the fundamental regulatory framework for private space activities was launched – a great number of private entities, especially start-ups, have embarked on and expanded their participation in space-related business and this trend has been furthered by some important accelerators. Such accelerators include new national security initiatives emphasising the importance of space security, publicised in 2022 and 2023, and a national strategy on space technology, accompanied by an enormous amount of public funding that has been allocated to private entities engaged in research and development (R&D) aimed at commercialising space technology.

It has become obvious that Japan is now entering into a new era in terms of its approach to space, and its space-related enterprises are likely to expand their presence in the global market. This development only increases the likelihood that lawyers from other jurisdictions will turn their attention to the Japanese regulatory framework underpinning space-related businesses and its national space policy. This article will outline the relevant fundamental regulatory framework in Japan and provide an update on the recent and upcoming amendments to this regulatory framework, while unveiling the background to the existing legal framework and recent shifts in space policy.

From 2008 to 2018: the path to the new Japanese regulatory framework

It was only in 2018 that two fundamental acts providing for the regulatory scheme on space activities came into effect in Japan, ie, the Act on the Launching of Spacecraft, etc, and the Control of Spacecraft (often referred to as the ‘Space Activities Act’ or the SAA)[1] and the Act on Ensuring Appropriate Handling of Satellite Remote Sensing Data (often referred to as the ‘Remote Sensing Act’  or the RSA).[2] As many as 21 nations had already established their own legal framework for the regulation of space activities as of 2017.[3]

Obviously, at that moment, Japan faced the necessity of catching up with these states and was obliged to facilitate private space business. The turning point which led to these new Acts took place in 2008, when the Basic Space Act (BSA) was enacted, prior to which Japanese space development had been geared towards fulfilling non-military purposes as a reflection of the pacificism enshrined in Article 9 of the Constitution of Japan. In addition, notably, much emphasis had been placed on more high-level R&D, in which the government (mainly the Japan Aerospace Exploration Agency (JAXA) since its establishment in 2003) had been taking the lead, rather than on strategic utilisation and industrialisation by private entities. Hence, it was believed at this time that the government could secure compliance with the pertinent rules set out in international law relating to space activities without any domestic legislation of its own.[4]

Nevertheless, around the beginning of the 21st century, Japan was faced with increased international tension, especially in regard to some of its surrounding states, including North Korea, which carried out a test launch of its first Taepodong missile in 1998. Meanwhile, Japan witnessed the surging trend in terms of the commercialisation of space-related business that was emerging globally. This raised awareness in Japan of the necessity to take a more strategic approach in relation to space security and space-related business, all of which eventually crystalised into the adoption of the BSA in 2008. The significance of the BSA lies in its explicit declaration that outer space development and utilisation must contribute to national security and be conducted in a manner that strengthens the technical competence and international competitiveness of Japan’s outer space industry.[5]

Following on from the adoption of the BSA to the establishment of the first-ever regulatory framework in 2018, another strong driver played a significant role, that is, the formulation of the National Security Strategy (NSS), which was launched in 2013, where the importance of space defence was expressly stated. Subsequently, the Basic Plan on Space Policy (BPSP), launched in 2016, stressed that the foundation of industry and technology related to the space sector should be established as the key to realising ‘space security’. The necessity of establishing a regulatory framework is mentioned in the BPSP in order to facilitate the entry into the space sector by various companies and to ensure supervision by the government in regard to compliance with the rules stipulated in the relevant international laws, including the United Nations Office for Outer Space Affairs' (UNOOSA) Outer Space Treaty (OST), by such enterprises as required in Article 6 of the OST, which was formally set down in the form of the SAA and the RSA.

Overview of existing regulatory framework

Space Activities Act

The SAA provides for two types of permission in order to carry out space activities: permission for launching a spacecraft from a launch site located in Japan (‘permission for launching’) and permission for controlling the launched spacecraft using a facility located in Japan (‘permission for spacecraft control’). The framework adopts the territorial principle, whereby permission is not required for the launching of a spacecraft involving Japanese satellites from outside Japanese territory.

The relevant factors which the applicant seeking permission for launching an object into space are required to meet include: (1) the launch vehicle and the launch site must be compliant with a specific site safety standard; (2) the launch plan must be appropriate in light of ensuring public safety and must indicate the applicant’s ability to execute the plan; and (3) the purposes and methods in terms of the use of the spacecraft must not be likely to have any adverse effects in regard to the accurate and smooth implementation of the relevant international treaties.[6]

Similarly, to be granted permission to carry out spacecraft control activities necessitates the fulfilment of other pertinent criteria such as: (1) the purposes and methods in regard to the use of the spacecraft must not be likely to have any adverse effects on the accurate and smooth implementation of the relevant international treaties; (2) a mechanism for the prevention of the dispersion of spacecraft components and parts must be implemented for the prevention of the harmful contamination of outer space, as set out in Article 9 of the OST; and  (3) the termination measures (ie, the measures to be taken upon the termination of the control of the spacecraft) must satisfy all the conditions relating to public safety.[7] The detailed criteria pertinent to each of these prescribed items are broken down in the official guidance publicised by the government, part of which refers to international discussions, such as on the relevant guidelines for the mitigation of space debris.

Another aspect to be noted is that the SAA provides for the fundamental principle regarding liability incurred by space activities, which will be applied to cases where the governing law is found to be Japanese law. Similar to the principles set out in the Convention on International Liability for Damage Caused by Space Objects, the SAA provides for strict liability for those who conduct the launch or control of a spacecraft, in order to compensate for damage caused to human life or the body, or to property on the ground[8] by the falling, collision or explosion of a launch vehicle or a spacecraft. To ensure the effectiveness of this principle, liability insurance and an indemnification arrangement with the government to cover all such damage is required before obtaining permission to launch.

One should be aware that this framework is not intended to comprehensively regulate all types of space-related business, since it lacks provisions concerning specific criteria for the licensing of relatively new types of businesses, including those related to the operation of manned spacecraft and on-orbit services. Attempts to fill such gaps in the regulatory framework have recently been made, as discussed below.

Remote Sensing Act and other relevant laws

Since remote sensing data obtained by a satellite in outer space can be sensitive, especially in terms of national security, the RSA stipulates a separate regulatory framework, in addition to that of the SAA. If a satellite operator intends to launch a satellite equipped with remote sensing instruments and to operate it from a ground station located in Japan, a licence pursuant to the requirements in the RSA will be required,[9] the focus of which is placed on the prevention of the unintentional leakage of information to, and access by, external parties. The RSA also prohibits the provision of remote sensing data to third parties unless the recipient is accredited by the government as being capable of putting in place appropriate measures for the handling of satellite remote sensing data.[10]

It should be noted that, whereas the SSA and RSA constitute the fundamental pieces of regulation that are of interest to lawyers practicing in the field of space-related business law, it is necessary to be aware of other relevant laws as well. For example, since the operation of a satellite necessarily entails the utilisation of radio waves, the Radio Act requires that the operator obtain certain permits pursuant to the regulatory regime established by the law before launching a satellite.

Accelerating space development by private entities

Pursuant to the legal framework outlined above, steady progress has been made in regard to space development by private entities in Japan, according to which the Japanese government has been seeking to further strengthen its space policy and to accelerate the growth of space-related businesses in Japan. At the heart of this active policy lies a number of critical factors, including the increasing tension in regard to international affairs, as exemplified by the crisis in Ukraine, and by the further rapid commercialisation of space globally. Another critical factor is the realisation in Japan that space technology can be a highly tool useful in predicting and coping with the aftermath of natural disasters.

Such factors, as well as the revised NSS in 2023 and the subsequent Space Security Initiative, which was newly introduced in 2024, both of which focus on space security, have finally brought about a significant shift in the national strategy for the development of space technology in Japan, a strategy that has now been expressly laid out in the revised BPSP 2023 and in the Strategy on Space Technology 2024. In regard to this new approach, the government will provide intensive funding for specific technologies that are selected from a strategic perspective, the total amount of which is expected to reach JPY 1tn JPY (approximately US$6.8bn), and which is intended to create the right environment for the accelerated growth of space-related business in Japan.

The progress made in regard to space-related technologies has necessitated a further update to the existing legal framework to regulate space-related businesses that rely on these new technologies. As mentioned earlier, the existing legal framework is far from complete and below we highlight a few of the attempts that are being made to fill in the gaps.

Permission to carry out spacecraft control for new business activities: on-orbit services and moon exploration

With respect to on-orbit services (OOSs), such as the repair of launched satellites and active debris removal (ADR), an additional guideline was released in 2021 for applicants requesting permission to be involved in spacecraft control OOS undertakings. Considering that OOSs generally involve complex legal issues, the new guideline requires applicants to confirm the registration of target satellites and their compliance with the relevant regulations in other states, as well as the existence of preventive measures against debris generation and notification processes related to any change in its orbit. The successful, widely-reported experimental mission involving ADR by Astroscale, a Japan-headquartered space services company, in 2024, was conducted under the purview of this new regulatory framework.

Act on the Promotion of Business Activities for the Exploration and Development of Space Resources 

Another example of such supplementary legislation governing the granting of permission to carry out space-related operations is the Act on the Promotion of Business Activities for the Exploration and Development of Space Resources (often referred to as the ‘Space Resources Act’), which was enacted in 2021. As well as clarifying the requirements for applicants seeking permission for moon exploration operations, according to which the groundbreaking mission involving landing on the Moon by ispace in 2023 was conducted, it is noteworthy that this Act explicitly states that an explorer can obtain ownership of the extracted space resources subject to compliance with the Act, which is only the fourth example of such legislation in the world, following the enactment of similar legislation in Luxembourg, the United Arab Emirates and the US that addresses the same issue.[11]

Planned amendments to the SAA for permission regarding manned spacecraft and Earth return orbiters

In addition, in May 2024, the government stated that, given recent technological innovations in the field of space transportation, such as those facilitating a spacecraft’s return to Earth, landing with a reusable rocket and sub-orbital flights, the government will now consider carrying out amendments to the existing framework under the SAA by March 2025 and to link these amendments to the enactment of new technological standards. While details on the proposed amendments remain to be seen as of the writing of this article, our interest remains focused on how the government will achieve a balance between mission safety goals on the one hand and, on the other hand, ensuring that regulatory disincentives to the development of space-related business are not created. In establishing the revised criteria for obtaining the necessary permits, the government will undoubtedly examine closely the frameworks used in other countries, including the US and the EU, the latter of which is about to release its new legal framework in relation to the issues discussed above.

Conclusion

Accelerated by the increasing interest in space development and a significant shift in space policy, Japan’s regulation of space-related business is moving briskly ahead, which includes the necessity to update the existing regulatory framework. The recent developments in this field, described here, will undoubtedly be of interest not only to Japanese lawyers, but also to practitioners of space law everywhere, since they may provide a good indication of where this sector is heading in their own jurisdiction as well.