Act on Elimination and Prevention of Involvement in Bid Rigging, etc. and Punishments for Acts by Employees that Harm Fairness of Bidding, etc.


Published: 2006

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Act on Elimination and Prevention of Involvement

in Bid Rigging, etc. and Punishments for Acts by

Employees that Harm Fairness of Bidding, etc.

(Act No. 101 of July 31, 2002)

(Purpose)

Article 1 This Act shall provide for measures to be taken to eliminate and

prevent involvement in bid rigging etc, including demands by the Fair Trade

Commission to the Heads of Ministries and Agencies etc. regarding

improvement measures necessary to eliminate involvement in bid rigging etc.,

claims directed at employees involved in said bid rigging for damage

compensation, investigation of the reasons for disciplinary actions against said

employees, and coordination and cooperation among the administrative organs

concerned, and other matters, and provide for punishments to be imposed on

employees for acts that harm the fairness of bidding, etc.

(Definition)

Article 2 (1) The term "Heads of Ministries and Agencies" in this Act shall mean

the heads of Ministries and Agencies as stipulated in Article 20, paragraph 2,

of the Public Finance Act (Act No. 34 of 1947).

(2) The term "specified corporation" in this Act shall mean an entity that meets

any of the following conditions:

(i) A corporation in which the government or local governments have equity of

50 percent or over

(ii) Out of corporations established under a special Act, a business corporation

of which shares representing at least one third of the total outstanding

shares or one third of the total voting rights owned by all shareholders are

required by law to be owned by the government or a local government at all

times (excluding corporations stipulated in item 1 above and entities

stipulated under Cabinet Orders)

(3) The term "Heads of Ministries and Agencies etc." in this Act shall mean the

heads of Ministries and Agencies, heads of local governments as well as the

representatives of specified corporations.

(4) The term "bid rigging etc." in this Act shall mean, in respect of conclusion of

agreements by the government, local governments or specified corporations

(hereinafter referred to as "government, etc.") for the sale and purchase, lease,

contract, etc., with a counter party to be chosen by auction or other competitive

means (hereinafter referred to as "bidding, etc."), the acts in violation of the

provision of Article 3 or Article 8, paragraph 1, item 1 of the Act on the

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Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No.

54 of 1947), through such practices that a entrepreneur wishing to participate

in the bidding decides in conjunction with other entrepreneurs the successful

bidder or the successful bid price, or the trade association makes an

entrepreneur wishing to participate in the said bidding do the said acts.

(5) The term "involvement in bid rigging etc." in this Act shall mean the

involvement in bid rigging etc. by the employees of government or local

governments, or directors or employees of specified corporations (hereafter

called "the employees"), and falling under any one of the following items.

(i) Having an entrepreneur or trade association engage in bid rigging etc.

(ii) Nomination of the counter party of a contract in advance, or indication or

suggestion in advance of wishes to the effect that a specified person be the

counter party of the contract.

(iii) Out of various data concerning bidding or contract, indication or

suggestion of information held in confidential files to a specified

entrepreneur or trade association, access to which shall facilitate bid rigging

etc. by the specified entrepreneur or trade association.

(iv) In connection with a specific bid rigging, etc., aiding bid rigging, etc.

nominating a specific person as participant to a bid, or by any other method,

at the express or implicit request of an entrepreneur, trade association, or

any other entity or by voluntarily approaching these persons, for the purpose

of facilitating such bid rigging, etc., in breach of such employee's duties.

(Demand for improvement measures to the heads of Ministries and Agencies)

Article 3 (1) The Fair Trade Commission may, when it recognizes involvement in

bid rigging etc. as a result of its investigation of bid rigging cases, demand that

the Heads of Ministries and Agencies etc. implement improvement measures

on the administration of bidding and contracts that are necessary for

eliminating the said involvement in bid rigging etc. (hereinafter simply

referred to as "improvement measures").

(2) The Fair Trade Commission may, when it finds it particularly in cases where

it finds involvement in bid rigging etc. as a result of its investigation of bid

rigging etc. cases (even when said involvement in bid rigging etc. has already

been eliminated), demand that the Heads of Ministries and Agencies etc.

implement improvement measures to ensure that said involvement in bid

rigging etc. is eliminated.

(3) The Fair Trade Commission shall, in making demands under the provisions of

the preceding two paragraphs, deliver written statements describing the

content of the said demand and the reasons thereof to the Heads of Ministries

and Agencies etc.

(4) The Heads of Ministries and Agencies etc. shall, when they receive a demand

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under the provisions of paragraph 1 or paragraph 2, perform the necessary

investigation, and shall, when it becomes evident that there is or was the said

involvement in bid rigging etc., implement the improvement measures, based

on the results of the said investigation, necessary to eliminate the said

involvement in bid rigging etc. or to ensure that the said involvement in bid

rigging etc. has been eliminated.

(5) The Heads of Ministries and Agencies etc. may, when it finds it necessary in

the investigation of the preceding paragraph ask the Fair Trade Commission to

provide data and other necessary cooperation.

(6) The Heads of Ministries and Agencies etc. shall publicize the results of the

investigation of paragraph 4 and the content of the improvement measures

implemented under the provisions of the same paragraph, and notify the Fair

Trade Commission thereof.

(7) The Fair Trade Commission may, when it finds it particularly necessary in

cases where it has received notification under the preceding paragraph,

express its opinions thereon to the Heads of Ministries and Agencies etc.

(Claim against employees for compensation for damage)

Article 4 (1) The Heads of Ministries and Agencies etc. shall, when there was a

demand under the provisions of paragraph 1 or paragraph 2 of the immediately

preceding Article, perform the necessary investigation if there is any damage

to the government, etc., due to the said involvement in bid rigging etc.

(2) The Heads of Ministries and Agencies etc. shall, when it has been recognized,

as a result of the investigation, that there was damage to the government, etc.

make the necessary investigation if the employees involved in said bid rigging

etc. are liable to the government for damage as well as the amount of damage.

(3) The Heads of Ministries and Agencies etc. may, when it finds it necessary in

conducting the investigation of the preceding two paragraphs, ask the Fair

Trade Commission to provide data and other necessary cooperation.

(4) The heads of Ministries and Agencies shall publicize the results of the

investigation made in accordance with paragraph 1 and paragraph 2 of this

Section.

(5) The Heads of Ministries and Agencies etc. shall, when as a result of the

investigation it has been found that the employees involved in said bid rigging

etc. caused damage due to willful or gross negligence, demand compensation

for the damage promptly.

(6) In respect of cases where the employees involved in said bid rigging etc. are

liable for damage under the provisions of Article 3, paragraph 2, of the Act on

the Responsibility of Government Employees who Execute the Budget (Act No.

172 of 1950) (including the case of application under the provisions of Article 9,

paragraph 2, of the same Act mutatis mutandis), the Heads of Ministries and

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Agencies or the heads of government corporations (meaning the heads of

government corporations stipulated in paragraph 1 of the same Article) shall,

irrespective of the provisions of paragraph 2, paragraph 3 (limited to the part

concerning the investigation of paragraph 2), paragraph 4 (limited to the part

concerning the publication of the results of the investigation of paragraph 2)

and the preceding subsection, paragraph, as provided for by the same Act,

necessary measures promptly. In this case, "without delay" in Article 4,

paragraph 4, of the same Act (including cases of application under Article 9,

paragraph 2, of the same Act mutatis mutandis) shall read "promptly

accompanied by the result of the investigation of Article 4, paragraph 1, of the

Act concerning involvement in bid rigging etc. by the said government

employees who execute the budget (meaning the involvement in bid rigging etc.

stipulated in Article 2, paragraph 5, of the Act on Elimination and Prevention

of Involvement in Bid Rigging etc. and Punishments for Acts of Employees that

Harm Fairness of Bidding, etc. (Act No. 101 of 2002))."

(7) In cases where employees involved in said bid rigging etc. are liable for

damage under Article 243-2, paragraph 1, of the Local Autonomy Act (Act No.

67 of 1947) (including the application mutatis mutandis of Article 34 of the

Local Public Enterprise Act (Act No. 292 of 1952)), the provisions of paragraph

2, paragraph 3 (limited to the part concerning the publication of the results of

the investigation of paragraph 2), paragraph 4 (limited to the part concerning

the investigation of paragraph 2) and paragraph 5 shall not apply, and the

term "request decision" in Article 243-2, paragraph 3, of the Local Autonomy

Act shall read "request a prompt decision," and the provisions of the said

Article shall apply (including the application mutatis mutandis of Article 34 of

the Local Public Enterprise Act).

(Investigation of the reasons for disciplinary actions against employees)

Article 5 (1) The Heads of Ministries and Agencies etc. shall, when there is a

demand under the provisions of Article 3, paragraph 1 and paragraph 2,

perform the necessary investigation if it is possible to impose disciplinary

actions based on the National Public Service Act and the Local Public Service

Act, upon the employees involved in said bid rigging etc. Such action shall

mean dismissal, suspension of duties, a cut in salary, or warning and other

sanctions in the case of specified corporations (excluding specified incorporated

administrative agencies - meaning incorporated administrative agencies

(stipulated under Article 2, paragraph 2 of the Act on General Rules for

Incorporated Administrative Agencies (Act No. 103 of 1999); hereinafter the

same shall apply in this paragraph) and excluding specified local incorporated

administrative agencies - meaning specified local incorporated administrative

agencies (stipulated under Article 2, paragraph 2 of the Act on Local

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Incorporated Administrative Agencies (Act No. 118 of 2003); hereinafter the

same shall apply in this paragraph). Provided, however, that the Heads of

Ministries and Agencies, heads of specified incorporated administrative

agencies or heads of specified local incorporated administrative agencies, in

cases where they do not have the appointive power of the said employees

(including cases where the appointive power of the said employees was

assigned), it shall suffice if the notification was made to the person with

appointive power (including the person who was assigned the appointive power

of the said employees; hereinafter referred to as "appointer") to the effect that

the demand under the provisions of Article 3, paragraph 1 or paragraph 2, was

received.

(2) The appointers, who received notification under the proviso of the preceding

paragraph, shall perform the necessary investigation if it is possible to impose

disciplinary actions upon the employees involved in the said involvement in bid

rigging etc.

(3) The Heads of Ministries and Agencies or the appointers may, when it finds it

necessary to perform an investigation based on the main clause of paragraph 1

or the preceding paragraph, ask the Fair Trade Commission to provide data

and other necessary cooperation.

(4) The heads of Ministries and Agencies or appointers shall publicize the results

of the investigation made in accordance with the main clause of paragraph 1 or

paragraph 2 of this Article.

(Investigation by designated employees)

Article 6 (1) The Heads of Ministries and Agencies etc. or appointers shall have

the employees designated by them (hereinafter in this Article referred to as

"designated employees") perform the investigation as provided for in Article 3,

paragraph 4; Article 4, paragraph 1 or paragraph 2; or the main clause of

paragraph 1 or paragraph 2 of the preceding Article, (hereinafter in this Article

referred to as "investigation"). In this case, Heads of Ministries and Agencies

etc. or appointers shall implement the necessary measures to secure an

effective investigation by designating employees equipped with abilities and

experience to properly perform the said investigation.

(2) The designated employees shall, in performing the investigation, conduct it

from a fair and neutral standpoint.

(3) In cases where the designated employees conduct the investigation, the

employees of the said Ministries and Agencies (meaning the Ministries and

Agencies stipulated in Article 21 of the Public Finance Act; hereinafter the

same shall apply), local governments or specified corporations shall cooperate

with the said investigation.

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(Coordination and cooperation among the administrative organs concerned)

Article 7 With regard to the prevention of involvement in bid rigging etc.,

governmental administrative organs concerned shall cooperate by maintaining

mutual coordination.

(Disturbance of bidding, etc. by employees)

Article 8 If an employee, in respect of concluding an agreement for the sale and

purchase, lease, contract, etc., by bidding etc. by the government, etc. for which

such employee works, has conducted any acts that harm the fairness of such

bidding, etc. by inciting any entrepreneur or person to conduct bid rigging,

informing any entrepreneur or person the target price or any other secret

concerning such bidding, etc. or by any other method, in breach of his/her

duties, such employee shall be sentenced to imprisonment with labor not

exceeding five years or punished with a fine not exceeding 2,500,000 yen.

(Consideration in application)

Article 9 In the application of this Act, due consideration shall be paid to the

independent efforts of local governments in properly administrating bidding

and contracts.

(Assignment of administrative work)

Article 10 The Heads of Ministries and Agencies may assign administrative

work stipulated in this Act to affiliated agencies of the said Ministries and

Agencies (limited to those whose heads are equivalent to Ministers of State

under the Act).

Supplementary Provisions [Act No. 101 of July 31, 2002]

This Act shall come into force as from such a day as is fixed by a Cabinet

Ordinance within a limit not exceeding six months counting from the date of its

promulgation.

Supplementary Provisions [Act No. 110 of December 15, 2006]

This Act shall come into force as from such a day as is fixed by a Cabinet

Ordinance within a limit not exceeding three months counting from the date of

its promulgation.

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