What possible penalties are there for not properly getting rid your original nationality or re-acquiring your old one or getting new ones?

PASSPORT CONFISCATION POLICY
Actually, a passport is not proof of nationality.
A Japanese family registry is, however.
This question was actually posted in the Reddit group "Residents in Japan", and I answered it there, but unfortunately the moderators removed the good question (in my opinion) due to their strict rule of requiring its participants to actually reside in Japan. Thus, I will re-post my answer here:

The worst case "penalty" for not properly getting rid your original nationality or re-acquiring or re-instating your old one or getting new ones is that they can unilaterally annul ("cancel") your Japanese citizenship on the grounds that you did not properly complete all the mandatory required steps to obtain it as prescribed by the nationality law.

This procedure is called "administrative denaturalization":

the loss of citizenship by an annulment of naturalization without the government needing to sue them in a court, also known as "administrative denaturalization" where the original act of naturalization is found to be invalid, for instance due to an administrative error or if it had been based on fraud (including bribery).
This would leave you in Japan without Japanese citizenship, and without a Japan residency and work visa, and with slim chances of receiving a new residency visa to remain in Japan as immigration tends to frown on applicants who have a documented history of immigration fraud.

So if you do this, your ability to stay in Japan is arguably more in peril than a non-Japanese who, say, obtains PR (permanent resident) status properly.

If you're caught, your life in Japan can possibly come to a Game Over scenario, where you will be ironically forced to leave Japan with the status of foreigner without a visa.

There are some that do it anyway, and they usually mentally rationalize their decision using one or more of these seven trains of thought:
  1. Other people got or are getting away with it, so I can get away with it too
  2. If they do catch me, surely they will feel pity on me and give me a chance to rectify the situation
  3. They obviously know that I haven't gotten rid of my other nationality, so surely this is some kind of proof that they secretly approve of it and they will never enforce the law sometime in the future.
  4. If they catch me, surely all the Japanese (and other naturalized Japanese [most of whom did give up their nationality]) will rally to my defense, and the government will be forced to change their enforcement policy and back off
  5. They will allow dual nationality by the time they catch me
  6. There isn't enough of us to make it worth Japan's time or it's too hard to find us and go after us and punish us or make us
  7. I don't really plan of being here forever, and I'll leave either before or if they catch me
I think you can spot the classic "wishful thinking" fallacy in the above seven arguments.

It should be pointed out that a lot of people, pre-COVID19, believed that having a Permanent Resident (PR: 氞䜏者 {eijÅ«sha}) Status of Residence (SoR: 圚留資栌 {zairyÅ« shikaku}) was essentially identical to naturalization except for voting and running for office, in that a person's right to enter and leave Japan as a Permanent Resident was basically unconditional, and they would never dare rescind that "right". These people got a splash of cold water in their face when the gov shut the doors temporarily on PRs being able to enter.

It's quite easy to catch somebody who hasn't actually properly completely naturalized — without ever needing to see their passports — because:
  • your previous nationality(s) (if you have them)
  • whether or not you acquired nationality by naturalization (and the date and where you did it),
  • and if you renounced your nationality (and the date you did it)
are all recorded on your 戞籍 {koseki} (Japanese family registry), which these days is digital and in a networked database. Authorized government officials can audit the entire population of Japanese nationals (domestic and overseas) and discover people that haven't properly done it with a simple database query in seconds.


FOR_ALL koseki IN NATIONAL_JAPAN_FAMILY_REGISTRY_DATABASE() DO {
    IF (DEFINED(koseki.records["naturalized"]) AND
       (NOT_EQUAL(koseki.records["naturalized"].previous_nationalities[0], STATELESS()) AND
       (koseki.records["naturalized"].naturalization_date + TWO_YEARS() > CURRENT_DATE())) {
        FOR_ALL x IN koseki.records["previous_nationalities"] DO {
            IF (x NOT_IN koseki.records["loss_of_foreign_nationality"].lost_nationality[]) {
                ERROR("{familyname} {givenname} HAS FAILED TO PROPERLY COMPLETE NATURALIZATION",
                    koseki.familyname, koseki.givenname
                );    
            }
        }
    }
}


Given my position on how many people I've known and met and advised with the naturalization process, I actually am aware of a lot of people who skirt this law. I will never "out them", but I will comment on them generically:

The primary westerners that do this are Americans.

That is because unlike say the British, which must renounce prior to getting Japanese citizenship, Japan gives a two year grace period after receiving Japanese nationality to get rid of your U.S. nationality. And the only reason Japan allowed this exception is because of the U.S.'s byzantine law that differentiates between "renouncing" (which is outrageously expensive and almost always has exit tax implications) and "relinquishment", which used to be free (not anymore) and does not always have exit tax implications. By letting them delay to after receiving JP citizenship, the 法務省 {hōmushō} (MoJ) was allowing Americans to qualify for "relinquishment" rather than "renunciation."

Thanks (?) to FATCA & FBAR laws regarding U.S. taxation, the proportion of Americans trying to keep their U.S. nationality is going down, not up.

Even if a U.S. Citizen (or a non-Citizen U.S. Lawful Permanent Resident aka LPR) owes the U.S. IRS nothing in taxes, they are required to report their income and assets, without error and promptly, every year for the rest of their life, or risk fines and possibly imprisonment.

They usually just want CoC (Citizen of Convenience) privileges.

It has been my experience over 10 years that most (>50%) of westerners that covertly keep their original nationality end up leaving Japan anyway — usually for other overseas job opportunities or because they want to raise their children overseas. Those that try to keep their first passport never had it truly in their heart that they wanted to stay in Japan forever.

Most people that naturalize do follow the law (who are the vast majority) and accept giving up their other nationalities.

Those that do follow the law to the letter usually have a dim opinion of their fellow naturalized that skirt the law — because it makes them as a group look bad and reinforces the belief among critics that naturalized Japanese are mostly lawbreakers and most are committing 䞍正垰化 {fusei kika} (improper naturalization) and not really 真面目 {majime} ("earnest" / honest) regarding becoming Japanese.

Some politicians I've talked to do have it on their agenda to eventually start cracking down on this, as while their numbers are few, there have been a few very high profile news cases of people abusing their possession of a second nationality ("forum shopping": leveraging incompatibilities and differences in two countries' laws for personal gain, and sometimes at the expense of a Japanese victim).

Couldn't you just give up your original nationality(s), get Japanese nationality, then re-acquire or re-instate your original one(s) — often with the encouragement of and expedited procedures of your original government?

This may be possible (some governments provide this service), but it should be noted that the act of voluntarily acquiring (or semantically, re-acquiring or re-instating) another citizenship while being Japanese is grounds for the unilateral revocation of Japanese citizenship, as per the Japan Nationality Law, Article 11.1.

And this law was very recently challenged and upheld as valid by Japan's high court.

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