Overview of Japanese Export
Control Legal Framework(Latest Update)November, 2010
CISTEC (Center for Information on Security Trade Control)
JAPAN1
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Contents
1. Administrative Authority & Policy
2. Legal Framework
3. The List Control & Relationship with Regimes
4. The End-Use Control (The Catch-All Control)
5. Licensing Policy
6. Penalties
7. Internal Compliance Program (ICP)
8. Challenge
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Section 1-1 Administrative Authority ofJapanese Security Trade Control
 The Ministry of Economy, Trade and Industry(METI)The Trade and Economic Cooperation
The Trade Control Department
Security Export
Control Policy
Division

Security Export
Inspection Office

Security Export
Licensing
Division3

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Section1-2 Feature of JapaneseExport Control
 In Japan, for the purpose of maintaining

peace and security of Japan and theinternational community, a license isrequired, based on the Foreign Exchange
and Foreign Trade Act, from the Ministerof Economy, Trade and Industry before
exporting/transferring specific kinds ofgoods/technologies.
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Section 2-1 Legal Framework of Export Control Regulation
Foreign Exchange andForeign Trade ActAct

Government orderGoods

Export Control
OrderTech.

ForeignExchangeOrder

List Control

Catch-All Control

Attachment List No.1
Category. １～１５

Category.１６

Attachment List
Category. １～１５
Subject toControl・Arms

Controlled
Area

・All destinations

・Dual use items
Highly possible to be
used for Military
purposeCategory.１６
・Other than Listed Items
and possible to be used
for the development ofW.M.D.＆Conventional
Arms・All destinations except
for certain 26 countries

Note） Goods ： Machine, Parts, Raw Materials
Technologies ： Tech. for Design, Manufacturing and Usage (inc. Software)
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5Section 2-2 List of Regulation
Foreign Exchange and Foreign Trade Act– Basic Act
 Export Trade Control Order– Listing goods to be controlled Foreign Exchange Order– Listing technologies to be controlled Ministerial ordinance stipulating goods, technologies
and software pursuant to provisions of the Attachment
List No1 to the Export Trade Control Order and theAttachment List to the Foreign Exchange Order.
 Notifications or Guidance
6
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Section 3-1 The List Control (Goods and Technologies)
Foreign Exchange and Foreign Trade Act Article 48

Export of Goods

Exporter needs to obtain export license when he exports specifickinds of goods to specified regions
Export Trade Control Order
Specific kinds of goods are listed in the Attachment List No.1

Service Transactions, etc.

Foreign Exchange and Foreign Trade Act Article 251)Resident needs to obtain export license when he provide specifickinds of technology to non-resident in the specific region.
2)Anyone needs to obtain export license when he bring out specificKinds of technology over Japan border to the specific region.
Foreign Exchange Order
Specific kinds of technology are listed in the Attachment list.
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Section 3-2 Difference between Export andTechnology Transfer－Japan－－Overseas－

Export Goods
Shipment

Sale

DesignPlan

TechnicalGuidanceTraining

Factory
FacilitynCautio

Accepting Trainee

Technical transfer can betaken place even in Japan

TransferTechnologies（Data transfer andTraining）

8
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Section 3-3

Technology or Software Transfer1) Technology (or Software) transfer from Japan to a foreign country
Any person, resident or non-resident, shall obtain a license when transferring listed
technology from Japan to a foreign country.
2) Technology (or Software) transfer within JapanAny resident shall obtain a license when transferring listed technology in Japan to anon-resident.
3) Technology (or Software) transfer within a foreign country
Any resident shall obtain a license when transferring listed technology in any foreigncountry. License is not required, however, when the technology was sourced in aforeign country and the transaction is completed only in a foreign country.


A technology or software transfer by intangible means like oral, e-mail or facsimile isalso subject to the control.
A non-resident generally means a foreign national, but a foreign national who isworking for a Japanese or foreign company in Japan, or who has been staying inJapan for more than six months is regarded legally as a resident.
Whereas, a Japanese national who is working for a Japanese or foreign company ina foreign country, or who leaves for a foreign country intending to reside there formore than two years is regarded legally as a non-resident.
9Copyright ⓒ CISTEC 2011 All rights reserved.

Section 3-4 Relationship between InternationalRegimes and Japanese Regulation
International Control Regimes

Category

１Arms

Wassenaar Arrangement (WA)２

DualUseItems

Weapons of Mass
Destruction

３

NSGAG３-２
４

Controlled Items in Japanese System
NSG Part 1
NSG Part 2

Exclusive for Nuclear Items
Dual Use Items

Equipment and Materials for Chemical Weapons
Equipment and Materials for Biological Weapons

MTCR

Equipment for Missile

WA

Category１

Advanced Materials

６

Category２

Material Processing

７

Category ３

Electronics

８

Category ４

Computers

９

Category ５

Communications/Information Security

１０Category ６

Sensors and Lasers

１１

Category ７Navigation and Avionics

１２

Category ８Marine

１３

Category ９

Aerospace and Propulsion

１４

Munition List

（Except for Sec. 1)

１５Very Sensitive Item

５１６Conventional Arms

W.M.D.& Conventional Arms

Catch All Item
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10Section 4-1 The WMD Catch-All Control
Even if the exporting items are not on the control lists, Export license is also required in thefollowing 3 cases①Exporting items may contribute to the proliferation of WMD.
②Exporter is aware that the end-user of the items is related to the development of WMD.
③Exporter is informed by the government (METI) to apply for E/L.

Subject Area

All areas（Except for 26 certain countries）

Subject Item

All items except for Food and Timbers.
Examples of 40 items with high risk of diversion
for development of WMD.

Conditions（１）Judgment by Exporter①End Use condition

・Whether the items will be used in the development of WMD.

②End User condition

・Whether the end user is/was involved for the development of WMD.

・Whether the end user is listed on the End-User List or not.

（２）Judgment by METI＝Inform Condition
・In case the Exporter is informed by METI to apply for a license.
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11

Reference

The Commodity Watch List

40 items with high risk of diversion for the development of WMD or their delivery


Examples of suspicious Goods & Application of concern (N=Nuclear weapons, M =Missiles,
B=Biological weapons, C=Chemical weapons)

1.Tributyl Phosphate (TBP) (N)
2.Carbon fibre･Glass fibre･Aramid fibre( N, M)
3.Titanium alloy (N, M)
4.Marageing steel (N, M)
5.Aluminum tubes of an inside diameter of 75mm or larger (N)6.Spin-forming Machine (N, M)
7.Numerically-controlled machine tool (N, M)
8.Isostatic Press (N, M)
9.Filament-winding apparatus (N, M)
10.Frequency converter (N)11.Mass spectrometer or ionization source (N)
12.Vibration test facility (N, M)
13.Centrifugal balancing machine (N, M)
14.Corrosion-resistant manometer; pressure sensor (N, M)
15.Large-size nondestructive inspection system (N, M)
16.High-frequency oscilloscope and wave form memory
device (N)17.Direct current-electric power unit for current or voltage withlow variation (N)18.Large-size generator (N)19.Large-size vacuum pump (N)20.Radiation-proof robot (N)






21.TIG welding machine、electron beam welding machine (N,M)
22.Radiation meter (N)23.Micro-powder producing grinding machine (M)24.Moisture content measurer (Carl Fisher-method) (M)25.Prepreg production device (M)26.Artificial graphite (N, M)
27.Gyroscope (M)28.Rotary encoder (M)29.Large-size trucks (incl. tractors、trailers、dump-trucks) (M)
30.Crane equipped vehicle (M)31.Closed system-fermenter (B)
32.Centrifuge (B)33.Freeze-dryer (B)34.Corrosion-resistant reactor vessel (C)35.Corrosion-resistant agitator(C)36.Corrosion-resistant heat exchanger OR condenser (C)37.Corrosion-resistant distillation OR absorption column/tower(C)
38.Corrosion-resistant filling machine (C)39.Unmanned Aerial Vehicles(UAV) designed to mountsprayers, excluding leisure or sports use (M, B, C)
40.Sprayer designed to be mounted on UAV (M, B, C)

12Copyright ⓒ CISTEC 2011 All rights reserved.

Reference

The End-User List （September 2010 Version)

・The Ministry of Economy, Trade and Industry (METI)
has issued the “End User List” providing exporters
with information on foreign companies/organizations
for which concerns over the development, etc. ofweapons of mass destruction, etc. remain, with theaim of strengthening the effectiveness of catch-all
control on weapons of mass destruction-related
cargos, etc. METI usually updates the “End User List”
once a year or more.
・Exporters are required to check “end-use” carefully
before exporting any items toCountryNo.
the enteritis on the list.
Israel2
Iran145

India

19

North Korea

106

Syria

11

Taiwan

2

China

15

Pakistan

29

Afghanistan

2Total331

Extract of the List

Note: Please check the latest list from METI’s Home Page
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Section 4-2 The Military End-Use Control
 Introduced on Nov.1, 2008 based on the WA

agreement in Dec., 2003
 Even non-listed Goods, exporter needs to apply for
approval from the Minister of Economy, Trade andIndustry, in case the exporter know the possibility
that the cargoes will be used for Military purposes.
 The control varies depending on the security
situation of countries of destination, making it
efficient and effective.
 The control is not applied to export destined for thecertain 26 countries.

14
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Section 4-3 Brokering and Transshipment
Control○ UNSC Resolution 1540 (April 2004)
・Refrain from supporting the non-governmentorganization under suspicions of W.M.D.
development
・Enforce appropriate export controls on Brokering,Transit, Transshipment against W.M.D. relatedmaterials and equipment⇒ Japan started to control Brokering andTransshipment from June 2007
15
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Section 4-4 The Brokering Control
A（Other than 26
certain countries）

Car Parts

B（Other than 26certain countries）

Export Goods（Category 1～16）

Car manufacturing

Contract

Contract
Head Office andBranch (Domestic and Overseas)

16
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Section 4-5 Legal Framework ofThe Brokering Control
 Arms: License is required in brokering anyArms.
 Other items: License is required in case abroker notices that the brokering item isgoing to be used for WMD proliferation ora broker is informed to apply for a license
by METI.
17
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Section 4-6 Legal Framework ofThe Transshipment Control
 Arms: Transshipment of arms on theCategory 1 list requires a license.
 Other items: A company in Japan mustobtain a license when transshipping goods
if the company has been so informed byMETI or the company has come to knowthat the items will be used for thedevelopment, manufacture or storage ofWMD.
18
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Section 5-1 Licensing Policy(Licensing Authority)
 Export license is issued from the Minister ofEconomy, Trade and Industry
 Exporters must submit license applications toSecurity Export Licensing Division of METI
 Licensing officers review the applications andcheck the end-use and end-user in view of
security concerns
 A license will be issued if METI judge that theexport will not materially contribute to thedesign, development or production of WMD
19Copyright ⓒ CISTEC 2011 All rights reserved.

Section 5-2 The Individual Export License Exporters are required to obtain anIndividual Export License unless Bulk
Export License is eligible.
 The license is valid for six months after theissue date. The exporter can submit anapplication to extend the validity.
 In Japan, over 12,000 Individual licenses
are applied for each year
20
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Section 5-3 Condition to obtain any type ofThe Bulk Export License

As conditions for obtaining a bulk export license,
exporters are required:
1. to establish an appropriate internal control
system based on Internal Compliance
Program (ICP) that must be submitted toMETI.
2. to implement the control complying strictlywith the ICP, and3. to participate in specific seminars held byMETI.
21
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Section 5-4 Four types of Bulk Export LicenseThe System of Bulk Export License simplifies thelicensing procedures by permitting an exporter to makemultiple exports of controlled items under suchconditions i.e. items’ classification, destinations, enduse and so on.
There are four types of bulk license:
The General Bulk Export License
The Special Bulk Export License
The Special Bulk Export License for Repair or Replacement.
The Special Bulk Export License for Overseas Subsidiaries
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Section 5-5 The General Bulk Export License
Under this License, an exporter can make multiple
exports of controlled but less sensitive items depending
on destinations.
 The license is not eligible to any export to Iran, Iraq,
North Korea and Libya. The eligible items and eligible
destinations are designated in the matrix tables issued
by METI as part of the regulation.
 The validity is 3 years from the issue date, which may beextended if applied for. But the license will lose its
validity, If the exporter knows that the export items will
be used for the development, manufacture, use or
storage of WMD or for military end-use.
23
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Section 5-6 The Special Bulk Export License This license allows an exporter to makeexports of specific items repeatedly to a
specific customer with whom he/she has
been keeping a continued trade
partnership.
 The validity is two years, which may beextended if applied for.
 Other conditions are basically the samewith those of General Bulk Export License.
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Section 5-7 The Special Bulk
Export License for Repair or Replacement This license is issued to allow re-exports ofCategory 1 items (arms and related items) for a
return to the country of origin for repair orreplacement. The eligible destinations arelimited to certain countries advanced in exportcontrols.
 The validity is two years which may be extended
if applied for.
 A person exporting under this license mustsubmit export records to METI every threemonths. The report must be submitted even if noexports have been made during the three-month
period.
25
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Section 5-8 (1) The Special Bulk
Export License for Overseas subsidiaries
 This license allows a manufacturer to makerepeated exports of specific items it
manufactured to its overseas subsidiary(Subsidiary A)--directly or via another overseas
company (Subsidiary B) as an importer.
 In this case:1) Subsidiary A shall be 100% owned by theJapanese manufacturer (the exporter), or by
Japanese companies, in which case themanufacturer shall be the majority shareholder.
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Section 5-8 (2) The Special Bulk
Export License for Overseas subsidiaries
2) Subsidiary B shall be 100% owned by aJapanese company--a trading firm, for example-or by Japanese companies, in which case thecompany shall be the majority shareholder.
3) The end user of the items to be exported under
the license shall be Subsidiary A.
4) This license can be used for the export ofgoods and for the transfer of technology that isrequired for the 'use' of specific goods.

27
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Section 5-8 (3) The Special Bulk
Export License for Overseas subsidiaries
 Each of the Japanese parent companies (themajority shareholders) shall conduct audits on its
subsidiary and give advice or instructions whennecessary to maintain its export control
compliance properly. The parent company must
report the compliance status when asked byMETI.
 The validity is three years which may beextended if applied for.
 This license may not be used, however, for theexports to or via Iran, Iraq, North Korea or Libya.
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Section 6 Penalty for the Violation
Export of the listed goods or transfer of the listed
technologies without obtaining license is subject to penalty
Criminal Penalty（If the 5 times amount of the subject items
is more than 10 mil Yen, the maximum
amount of the penalty is 5 times amount.)

Administrative Sanction
・Impose a ban on exporting andtransferring technology for up to 3years.
ionCaut

Public Announcement

・Imprisonment for up to 10 years
・Penalty of up to J.Yen 10 Mil

・Lose corporate reputation
・Social Sanction
・Court action byshareholder

Warning by METI

※Not only the company, Japan may get huge damage and lose her reputation in the world.
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Recent Violation Case

Reference

６．Intentional

3.6%

５．Violation of license
condition

8.1%
４．Shipment control

6.6%
53.7%
３．Misinterpretation ofThe Regulation

14.3%

１．Without, or Insufficient
check of the control list

２．Classification Error

13.7%

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30

Section 7 Internal Compliance Program(ICP)
Aim: To strictly comply with related export control act
and regulations when the exporter exports goods ortransfer technologies.
 Establish own internal program for export control – covermanagement policy, export control organization,procedure, shipment confirmation, internal audit, training,record keeping etc.
 Required for exporter’s bulk license application to METI Registration of the program with METI.
- Over 1,450 enterprises registered as of March, 2009
- Required for bulk export licensing procedure
31
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Section 8Challenge New Regulations dedicated for Security

Export Control
 Change of Numbering Structure ofControl List into Global Standard Change of Bulk License for Overseas
subsidiaries into Easier one to use

32
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Thank you!

33
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