Japan’s Intelligence Reform Has a Counterintelligence Problem

In order to deal with a worsening regional security environment, Japan is stepping up its intelligence capabilities. Since establishing the National Intelligence Council (NIC) this summer, Prime Minister Takaichi Sanae acknowledged the threat caused by leaks of sensitive technology to foreign intelligence services. 

“We will continue discussions on ‘enhancing foreign intelligence collection’ and ‘strengthening the prevention of improper foreign influence’ while maintaining a balance with the people’s ‘liberty and human rights,’” she said at a recent press conference. 

As Japan continues its intelligence reforms, the government must also consider how to strengthen its counterintelligence capabilities. This will impact not only the development of a Japanese foreign intelligence service, but also Japanese aspirations to play a larger role in intelligence liaison relationships with friends and allies like the U.S. and its Five Eyes partnership. It is critical that Japanese policymakers strengthen Japan’s ability to defeat foreign espionage.

Counterintelligence is a critical part to the broader intelligence mission. According to James Olson, formerly the head of the CIA’s counterintelligence section, counterintelligence is “all the measures a nation takes to protect its citizens, secrets, and technology from foreign spies.” 

At first glance, this seems to primarily refer to the groups like Olson’s former organization at CIA or the counterintelligence section of the National Security Branch of the FBI. But counterintelligence also includes organizations like the Committee on Foreign Investment in the United States (CFIUS), which provides oversight of business acquisitions between American and foreign companies. There is also the Defense Counterintelligence and Security Agency (DCSA), which investigates the suitability of a person to be granted access to classified information. Counterintelligence also includes counterespionage, which are activities used to penetrate, defeat, and manipulate foreign intelligence services. This creates an understanding of adversarial services, and create space for one’s own intelligence operations. What unites all of these activities and organizations is their ultimate objective being the defense of the state against foreign intelligence services.

Japan’s counterintelligence capabilities are minimal but like the broader intelligence community they have been getting stronger. Japan has two agencies that are broadly focused on countering foreign elements within Japan. The first is the National Police Agency (NPA), which is responsible for supervising the prefectural police forces in investigating criminal activity in Japan, including cyber crimes and terrorism. The second is the Public Security Intelligence Agency (PSIA), which also collects information on terrorist targets, which historically also included communist subversion. Together these are the main agencies responsible for protecting Japan’s domestic security.

Japan does not currently have a comprehensive anti-espionage law. The primary law that touches on counterintelligence is the Act on the Protection of Specially Designated Secrets. Passed in December 2013, the law allows Japanese government agencies to limit access to information “which is publicly undisclosed and which is particularly required to be kept secret due to the risk of causing severe damage to Japan’s national security.” The law also says that unauthorized disclosure of covered information can result in incarceration up to ten years. 

To strengthen Japan’s counterintelligence regulations, the Takaichi administration supports passing a law requiring the registration of foreign agents in Japan. Like its counterparts in the United States, the law would strengthen Japanese counterintelligence through tracking the activities of foreign intelligence officers and agents and deter espionage through prosecution.

However, there remains important regulatory and institutional work that needs to be done in order for Japanese counterintelligence to be successful. The first is clearly establishing what kind of information is and is not covered by anti-espionage laws. Japan is an open society and generally protects the free flow of information in public. But states like China have exploited this openness and conduct significant open-source intelligence (OSINT) collection, especially against technical and scientific targets. According to scholars, China engages in a broad spectrum of collection activities, from “scanning technical literature to analyzing patents, reverse engineering product samples, and capturing conversations at scientific meetings. Nothing is overlooked.” Given the threat posed by China and OSINT collection, Japan should create a legal definition of covered information that both defends Japanese national security, but also protects civil liberties.

Although intelligence oversight is important to any state, it is especially acute in Japan. In the first half of the 20th century, the Imperial Japanese government strictly controlled the dissemination of information. This fear of political repression was instrumental to defeating postwar efforts to establish a Japanese version of the CIA. These concerns are still prevalent in Japan some seven decades on. Social Democratic Party lawmaker Fukushima Mizuho said that that the new NIC “infringes upon the right to privacy and other rights and paves the way for a surveillance society.” To address concerns about abuses by intelligence agencies, Japan should consider creating legislative committees dedicated to intelligence and provide oversight. Through legislative hearings and control over funding, a Diet Committee on Intelligence would provide public oversight of counterintelligence enforcement activities.

Finally, counterintelligence needs to be inculcated across the Japanese intelligence community. Most of the Takaichi administration’s intelligence reforms have been focused on centralizing operations in the Kantei. While this may be important to prevent stovepiping and turf battles, the counterintelligence mission cannot be siloed in one independent agency. Intelligence benefits from compartmentalization, especially through authority that enforces that need-to-know principle is necessary. It would also be easier to allow each intelligence agency to conduct its own counterespionage operations, as they have the best insights on how to manipulate their intelligence targets. While centralization has been a primary outcome of the Takaichi administration’s intelligence reforms, not all aspects of the counterintelligence mission can benefit from this perspective.

The Takaichi administration should be congratulated for its efforts to strengthen its intelligence capabilities. Counterintelligence has received less attention but is extremely important to the broader strengthening of Japanese intelligence. Its primary objective is protecting Japanese intelligence, whether it be through recruiting agents, hacking into secured systems, or old-fashioned break-ins. But counterintelligence’s offensive aspect is also important to understanding foreign adversary operations in Japan and creating space for Japan’s own intelligence operations. Japan also needs to decide how to both carry out this mission while also respecting important democratic norms protecting free speech and expression. Strengthening its counterintelligence capabilities through new legislative developments and establishing institutions will be critical if Japan hopes to achieve its goal of intelligence reform.