On the Update to the Application of Export
Controls to the Republic of Korea
Misconceptions Regarding theImplementation of Export Controls―Accurate Understanding Avoids Confusion!―
August 5, 2019
CISTEC OfficeExtreme Misconceptions and Assumptions
Cause Confusion■ In the absence of basic understanding of export controls, extreme misconceptions in both Japan and theRepublic of Korea (ROK) are escalating incorrect statements, leading to the current confusion.
(For example) “It’s an embargo,” “By exclusion from the whitelist, all of exports to that country would require the license.”“Under catch-all control, many items designated by the government will require license applications,” and so on.
⇒ It is clear these views are totally wrong in terms of the common sense of people actually working in the export control field.

■ Japanese exporters are the ones who must acquire licenses⇒ The export control departments of Japanese companies practicing appropriate self-management are not worried in the first place.
⇒ They have a good record of exporting various items smoothly, including subjects of both individual and bulk export licenses, to all
regions of the world.
⇒ Even if the ROK is removed from the whitelist, exports to ROK will still be able to proceed smoothly, as they do to countries
participating in international export control regimes.
⇒ Special general bulk and special bulk licenses can be still used. Even individual licenses, where preparation and scrutiny of various
documents is required, will get on track shortly.
*It should be noted the cooperation by the ROK companies is necessary for preparing documents such as end-use and end-user
descriptions, certificates etc.

■ Extreme misconceptions and assumptions, which stoke crisis and expand confusion, do nothing butharm, not just to Japan and the ROK, but also to the global economy.
■ Exports will be under way shortly. There is no possibility of impact on international supply chains.
2

Three items to the ROK are now subject to individual
licensing!?
An embargo in principle!?
Quantitative restrictions?!

Every item,regardless ofspecs?!

Per eachshipment?!

Every export
takes 90 days!?

Will we be able tosupply local factories
in third countries?

NO! NO!
This cannot happen!
Licenses will be issued promptly ifthere are no concerns

Are people confusing thiswith
US Entity List operation?

Limited toadvanced items,
based oninternational
export control
regimeagreements

Per each contract!
The period ofvalidity of a licenseis 6 months, inprinciple (and may
be longer)
Goods loaded
within the period
are covered

90 days is the standard
processing period. If
there are no concerns, itwill not take even thatlong.

Scrutiny becomes more careful
if concerns cannot be eliminatedor/and military use is involved,etc.

(1) Naturally, the end
use and end user
should be within theROK.
(2) If supply to a thirdcountry is the intent
from the start,
licenses must be
acquired on that basis

These are common sense for those working in the field of national security export controls.
Such misconceptions are untenable!
There is no possibility of impact on international semiconductor supply chains!

Exclusion from the whitelist... !?
We won’t be able to use
general bulk licenses!
(White bulk)

Individual licenses inall exports?

Usable with white countries, grantedeven to exporters who practice simple
self-management

NO! NO!
Granted to exporters who practice strict
self-management(Usable in whitelisted and non-whitelistedcountries)

Catch-all controls
will apply?!

Yes
Individual licenses inmost cases?
NO! NO!

Special general bulk
licenses are OK!

Even individual licenses
will be issued promptly ifthere are no concerns

Also applied to whitelisted
countries in the ROK

Check this carefully!
(1) Existence of concern about
end use and end user
(2) Existence of concern abouttransfer to third countries, etc.

Items not subject to list control require licenses if
there is specific individual information about transfer
to military use or users, but the cases of concern arevery limited, and licenses are not required in mostcases

Fundamental Misconceptions Which Particularly
Invite Harm and Confusion―The Meaning and Operation of Catch-all Controls―

Media report example 1: “From August 28, the Ministry of Economy, Trade and Industry will beable to perform individual review for license on exports of almost all items to the ROK”
Media report example 2: “In a wide range of items, such as screws and ferrous metals notunder list control, it will become necessary to get individual licenses if METI has determinedthat there is potential for diversion to military use.”

1. Catch-all control means individual exports of non-listed items requires license if there is specific individual informationof concern indicating the strong possibility of use for the development of weapons of mass destruction or of military use.
(Example 1) There is information indicating that goods to pass through customs clearance are used for missile
development in Nation A.
(Example 2) There is information indicating that a product of Company B is used for chemical terrorism by a terroristgroup in Nation C.
2. Reporting to the effect that licensing will be required for all non-listed items, regardless of the exporter or whether there is
any specific information of concern, is entirely incorrect.
3. Case with specific individual information of concern, is extremely limited, and licenses are not required in most cases.
5Reference１

TradeSecurity

WTO“Japan practices security export control under
the Foreign Exchange and Foreign Trade Law,on the basis of these Security Council
Resolutions, international treaties, andinternational export control frameworks. Thereis concern over nuclear development by North
Korea, Iran, and other nations. If the advanced
goods and technologies in the possession ofJapan and other countries were employed bysuch countries for purposes such as thedevelopment of weapons of mass destruction,that would pose an enormous threat, not just toJapan, but to international society. Therefore, itis essential to prevent that menace throughstringent security export control. Furthermore,
GATT Article XXI permits security exceptions
on the basis of that perspective.” (From “UnfairTrade White Paper, 2016 edition, p262-263,
Column: Security export control,” Ministry ofEconomy, Trade and Industry)

Security export control
UN Security Council Resolution 1540 (2004)
Export controls etc. to prevent theproliferation of weapons of mass
destruction, military use, andterrorism use are legal obligationsof UN member nations.

International export control regime
Nuclear (’78 - ) 48 countries (NSG)
Biological and chemical (’85 - ) 42 countries (AG)Missiles (’87 - ) 35 countries (MTCR)
Conventional weapons (’96 - ) 42 countries (WA)<Prevention of the unauthorized use and thirdcountry re-transfer of items>* The decision whether individual or bulk licenses isat the discretion of each countryReference２■ On the Update of the Application of Export Controls
to the Republic of Korea
Basic Interpretation Regarding the Implementation ofJapan’s System of Export Controls（ver.2:August 7, 2019)7