Japan's Diet has enacted a law designed to support the domestic development and production of equipment that is supplied to the country's Self-Defense Forces.

A key provision of the law is that it allows the government to acquire production lines for equipment that is vital to the Self-Defense Forces' missions, and outsource them to other firms, if a company is unable to continue to do business.

The bill was approved at Wednesday's Upper House plenary session by a majority vote. It was supported by the ruling coalition of the Liberal Democratic and Komeito parties, as well as the opposition parties, including the Constitutional Democratic Party.

The law allows the Defense Ministry to designate confidential information that is provided to contractors as defense-equipment secrets.

If confidential information is leaked, those responsible can be criminally punished. They can be sentenced to up to one year in prison or fined up to 500,000 yen, or about 3,600 dollars.

The law also allows the government to shoulder costs incurred by defense equipment makers, when they strengthen their supply chain and cybersecurity systems.

The law permits the government to create a fund to help defense companies transfer their products overseas.

Increasing numbers of domestic companies have been pulling out of the defense industry. Observers believe this trend is behind the legislation.

In order to nationalize defense production lines, taxpayer money must be spent.

Throughout the Diet debate, the government has repeatedly said it hopes to transfer such lines to the private sector as soon as possible. But it is unclear whether any businesses are prepared to take them.

The government will have to fully explain this matter to taxpayers. If it does acquire production lines, it will also have to make sure that the acquisition is temporary.