Japan's government convened its expert panel on AI policy on 26 October 2026 and began reviewing the AI Act passed in May 2025, according to reports by the Sankei Shimbun and Kyodo News summarised by AI4Japan.
Penalties on the table
The current law allows the state to investigate and give guidance to AI businesses that infringe people's rights, but it has no penalty provisions. The central question for the review is whether an amendment should introduce penalties for malicious AI operators. The panel will catalogue risks including more serious AI-assisted cyber attacks and techniques by which AI systems improve themselves to raise their own performance sharply. The Digital Minister, Toshiharu Furukawa, told the meeting that Japan needed closer cooperation with partner countries on AI safety.
A voluntary code on intellectual property
On the same day, the Cabinet Office began applying its Principle Code for generative AI businesses. The code, drafted in August after a series of disputes over the use of copyright material, has three main commitments:
- disclosing an outline of training methods and the types of data used;
- answering inquiries from rights holders considering legal action; and
- answering inquiries from users.
The code is not legally binding. The Cabinet Office plans to publish a list of companies that accept it.
A shift in approach
Japan has so far favoured light-touch promotion of AI backed by guidance. Adding penalties would be a move towards enforcement aimed at the worst actors rather than the whole industry. The next signs to watch are the first list of companies signing the code and whether the panel recommends a penalty clause.
Why it matters financially
No fines are proposed yet, so the immediate cost is limited. However, Japan is a large market for AI services, and a move from guidance to penalties would add compliance costs for developers selling there. Being on, or missing from, the Cabinet Office's public list of code signatories could also affect enterprise buying decisions and licensing talks with rights holders.