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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Overview of Overview of Japan’s Export Control SystemJapan’s Export Control System
Nobuo TANAKASecurity Export Control Policy DivisionTrade and Economic Cooperation BureauMinistry of Economy, Trade and Industry (METI)JAPAN
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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1. Introduction ( Importance of Export Control)
2. Japan’s Export Control System
3. Recent Developments of Japan’s
Export Control
Contents
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
1. Introduction ( Importance of
Export Control)
3
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Terrorist attacks and WMD-related activities
A.Q. Khan Network (2004) North Korean missile tests (July 2006, April and July 2009) North Korean announcement on nuclear tests (October
2006, May 2009) Iranian issues
Terrorist attacks
WMD-related activities
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Sarin gas attack on the Tokyo subway ( March 1995) 9/11 attacks (September 2001) Bali bombings (October 2002, October 2005) Madrid train bombings (March 2004) London bombings (July 2005) 2008 Mumbai attacks (November 2008) Moscow bombings (February 2010, January 2011)
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Global Peace Index 2011
data from Global Peace Index
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Terrorist activities (reported in 2010) - Number of incidents: 11,604 - Number of dead: 13,186Main areas of terrorist activities
- Iraq, Afghanistan, Pakistan and African countries - Recently we see increased terrorist activity in Asia.
- There are high level of terrorist activities, resulting in serious harm to people’s lives.- Recently, terrorism has increased in Asia.
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- WMD (weapons of mass destruction) proliferation is occurring in countries of concern and with terrorists (non-state actor).- The United Nations has requested the introduction of export control systems.
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
72010 NCTC Report on Terrorism
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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2010 NCTC Report on Terrorism
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Terrorist activities (reported in 2010) - Number of incidents: 11,604 - Number of dead: 13,186Main areas of terrorist activities
- Iraq, Afghanistan, Pakistan and African countries - Recently we see increased terrorist activity in
Asia.
- There are high level of terrorist activities, resulting in serious harm to people’s lives.- Recently, terrorism has increased in Asia.
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- WMD (weapons of mass destruction) proliferation is occurring in countries of concern and with terrorists (non-state actor).- The United Nations has requested the introduction of export control systems.
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Terrorists or countries of concern can procure items through countries that do not implementexport control systems.
Country ACountry A
circumventing exports
Countries notimplementing export
control systems
Countries notimplementing export
control systems
Terrorists,countries of concern
Terrorists,countries of concern
Threats to world peace
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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Why must companies have export controls?
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Why must companies have export controls?
- Compliance
- Social responsibility Companies are punished if exported goods are used for terrorist activities or countries of concern, regardless of regulations.
- Reduces cost of export procedures Companies can simplify export control procedures in accordance with their own export systems.
- Enhanced evaluation by investors Companies with export controls are more highly evaluated because they pose lower investment risks.
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
2. Japan’s Export Control System
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Treaties,Convention
Export Control Regime
BWC CWC
Biological/chemicalweapons
Biological Weapons Convention
AG
Australia Group
MTCR
Missiles
Missile Technology Control Regime
WA
Wassenaar Arrangement
NPTNuclear Non-Proliferation Treaty
Nuclear weapons
NSGNuclear Suppliers Group
Conventional Weapons
ChemicalWeapons Convention
WMDs
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19701977
1975
1997
1985
1987
1996
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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Control Lists of the International RegimesControl Lists of the International Regimes
1. Nuclear Suppliers Group Trigger List (Part 1) Dual-Use List (Part 2)
2. Australia Group Chemical Weapons Precursors Biological Agents Plant / Animal Pathogens Dual-Use Chemical/Biological Facilities and Equipment
3. Missile Technology Control Regime Category I Category II
4. Wassenaar Arrangement Munitions List Dual-Use List (BL, SL, VSL)
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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Website(NSG)
• NSG: http://www.nuclearsuppliersgroup.org/Leng/default.htm
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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•AG:http://www.australiagroup.net/en/index.html
Website(AG)
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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• MTCR: http://www.mtcr.info/english/index.html
Website(MTCR)
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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• WA: http://www.wassenaar.org/
Website(WA)
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
(1)Law or Act Foreign Exchange and Foreign Trade Act - Basic frameworks and thoughts(2)Cabinet Orders Export Control Order - List of goods Foreign Exchange Order - List of technologies(3)Ministerial Orders - Details(specifications and interpretations of listed items
The legal structure in Japan
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Outline of Japan’s Export Control System
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In order to ensure the agreement of Treaties and International Regimes
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Check on List Control
BusinessInquiry
Need to apply for License
Check on Catch-all Control( End-use & End-user )
none none
listed item
may use for WMD
NoLicense
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
An export license is required for the export of listed items
- An export license is required even if items are exported for own company/factory in a foreign country.
- License exceptions
• Shipment of Limited value
• Replacement of parts and equipment etc
- Bulk license
List control
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Check on List Control
BusinessInquiry
Need to apply for License
Check on Catch-all Control( End-use & End-user )
none none
listed item
may use for WMD
NoLicense
A Flowchart of the A Flowchart of the classification classification procedure procedure in companiesin companies
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
- All items related to WMD cannot be covered by export control regimes’ lists
- It takes time to revise lists in the export control regimes, but technologies continue to advance
Limitations of List Control
It’s difficult to implement sufficient export controls by list control only!
Non-listed control, Catch-all control is necessary for effective export control
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Target All of the items except which do not clearly contribute to WMDs proliferation programs
Licensing Conditions
(1) Judgment by exporters- End-use: whether the exporters are aware that the items are used for the development of WMDs. - End-user: whether the exporters are aware that the end-user got involved in development of WMDs.
Catch-all Control (WMDs) – End Use Control
(2) Informed by METI Exporters are informed of the need for licensing by METI
Assistance Tools for Effective Enforcement a. Preliminary Consultation b. Risk Information of end-use ( Commodities ) c. Risk Information of end-user
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
b. Risk Information of end-use ( Commodity)
Commodity Watch List - Not a controlled list
Examples of 40 items with high risk of diversion for development of WMDs.
a. Preliminary Consultation
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Consultation service for exporters
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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c. Risk Information of end-user
Foreign End-user List - Not an embargo list
354 entities on which there are concerns for development of WMDs.
*The guideline to clear the concernThere are 17 items to confirm whether there is a concern or not, such as: - The customer’s need for the items is reasonable for their business and their technological capabilities. - The requirements for spare parts are not excessive. - The shipping route is reasonable for export items and destination. etc…
If the end-user is the listed end-user, exporter has to check carefully using *the guideline provided by METI.
If end-use has clearly not a concern with WMDs
If end-use has a minor concern or a clear concern with WMDs
Licensenot needed
Licenseneeded
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Foreign End-user List (extraction)
Country Number
Israel 2
Iran 164
India 12
North Korea 111
Syria 13
Chinese Taipei 2
China 15
Pakistan 33
Afghanistan 2
Total 354
Foreign End-user List (Revised Sep. 2011 )
No.
国名、地域名Country or
Region
企業名、組織名Company or Organization
別名Also Known As
懸念区分Type of WMD
1イスラエル
IsraelBen-Gurion University (of the Negev)
核N
2イスラエル
IsraelNuclear Research Center Negev (NRCN)
核N
3イランIran
7th of Tir
・ 7th of Tir Complex・ 7th of Tir Industrial Complex・ 7th of Tir Industries・ 7th of Tir Industries of I Isfahan/Esfahan ・ Mojtamae Sanate Haftome Tir・ Sanaye Haftome Tir ・ Seventh of Tir
核N
4イランIran
Abzar Boresh Kaveh Co. ・ BK Co.核N
5イランIran
Aerospace Industries Organisation (AIO)
・ Sazemane Sanaye Hava Faza ミサイルM
6イランIran
AMA Industrial Company AMA Industrial Co.
核N
http://www.meti.go.jp/policy/anpo/law_document/tutatu/t08kaisei/100903EUL/t08kaisei_userlist_kohyo.pdf
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
• An exporter needs to apply the Ministry of Economy, Trade and Industry (METI) or its regional branches for the export license.• An exporter is required to attach documents including the documents provided by an end user such as the Letter of Assurance.• METI will examine the application referring to the criteria to issue an export license.
the end user the exporter METI
applicationdocuments
Licensing Procedure
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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Application Form ( Goods ) Application Form ( Technology )
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
• Application Form (available from the METI website)
• Supplementary Details regarding the Application– Name of manufacturer– Quantity and Value – Outline of end use etc.
• Back Ground Documents (e.g. a written contract)– Back ground documents are required to check whether the
transaction meets the Export Licensing Criteria.
• Other Documents– Commodity in Detail (e.g. catalogue)– End-User in Detail (e.g. leaflet)– The Letter of Assurance by the End-User– Any other documents requested by METI
Exporters are required to submit documents as follows;
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
① Will items actually reach the stated end-user?② Will the stated end-user really use the item?③ Will the actual use exactly match the stated end-use ?④ Will the stated end-user strictly control the item?
Key points for Export Authorization
Japan’s licensing requirements are all to be confirmed by licensing officer.
The requirements are different according to the items or destinations.
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Exporter
Importer
End-user
①Will items actually reach the stated end-user?
②Will the stated end-user really use the item?
Factory for dice
Very small factory
Unnatural rout
e ?
Nomal route
Are there consistent contacts from the exporter to the end-user through the importer?
Are there any unnatural route from exporter to end-user?
Is the business of the end-user consistent with the uses of the
items?
Is the number of items consistent with the scale of
business?
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
We deal …
The main customers are
…
Company related to Military Fund from the Military
Restricted entries of outsiders
Maintain appropriate depository
③Will the actual use exactly match the stated end-use?
④Will the stated end-user strictly control the item(s)?
Does the end user deal with military items?
Does end user concern with the military industry?
Is the place where item is used decided?
Are the items controlled appropriately?
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Enforcement
Cooperation with relevant organizations
• METI cooperates with other related government agencies to enforce export control
− Customs− National Police Agency (NPA)− Ministry of Foreign Affairs (MOFA)− Japan Coast Guard (JCG), etc.
Cooperation with relevant organizations
• METI cooperates with other related government agencies to enforce export control
− Customs− National Police Agency (NPA)− Ministry of Foreign Affairs (MOFA)− Japan Coast Guard (JCG), etc.
Cooperation with private companies etc• METI encourages exporting companies and universities to strengthen their export control, and provides them with a variety of support.
− Measures for promoting ICP− Guidance for the control of sensitive technologies (ITT)− Outreach seminar, etc.
Cooperation with private companies etc• METI encourages exporting companies and universities to strengthen their export control, and provides them with a variety of support.
− Measures for promoting ICP− Guidance for the control of sensitive technologies (ITT)− Outreach seminar, etc.
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
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3. Recent Developments of Japan’s Export Control
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Amendment of Foreign Exchange and Foreign Trade Act
1. Reviewing export control on technology transfer
Date of issue: 30th Apr. in 2009Effective: 1st Nov. in 2009
2. Strengthening the penalties
Main points of amendment
3. Establish the system according to the standard to observe ICP (Internal Compliance Programme)
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
- Target all persons who offer or tend to offer to foreigners
- Limitation of dealing between residents and non- residents
1. Reviewing export control on technology transfer
Before After
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Resident
Need a license
offer
Non-resident
offer
Need a license
Before
After
1. Reviewing export control on technology transfer
Any person
Any person
Border
Any person
40
USB etc
offer
offer
Need a license
Resident
Non-resident
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
- Imprisonment up to seven years, fine up to 7 million JPY- Especially in case of WMD, imprisonment up to ten years, fine up to 10 million JPY- Establish new punishment for obtaining of license through illicit means
After
- Imprisonment: up to five years- Fine: up to 2 million JPY
Before
- Tighten punishment of control- Establish new punishment for obtaining of license through illicit means
2. Strengthening of penalty
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※77 JPY = 1 USD
Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
- Defined clearly in law- All exporter need to observe the standard of ICP
After
- Necessary condition just for Bulk License
Before
- Establishment of the standard to observe for exporters- Making instructions, counseling and orders to exporters not to observe the standard of ICP
3. Establish the system according to the standard to observe ICP (Internal Compliance Programme)
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Joint Industry Outreach Seminar in Malaysia (Nov. 17, 2011)
Security Export Control Policy Division 、Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry (METI)