Japanese Ministry of Economy, Trade and Industry (“METI”) will have seminar to public business audiences on August 29, 2008 in Tokyo to make it widely known for planned new export control regulation. The new additional regulation in export control is called “Conventional weapon catch-all control”, which is planned to be effective on November 1st, 2008. This new regulation is introduced to reflect the agreement of Wassenaar in December 2003, which aim to prevent the diversion of conventional arms and sensitive dual-use goods and technology from being used to assist terrorist acts.
According to the METI web site, the summary of planned change of export control is as below.
Newly list up the restricted country group (as United Nations arms embargo countries) for tighter export control, which are Afghanistan, Democratic Republic of the Congo, Cote d'Ivoire, Iraq, Lebanon, Liberia, North Korea, Sierra Leone, Somalia, Sudan.
Add up new product list category #15-2 in Export Trade Control Order Attachment List No. 1 and in Foreign Exchange Order Attachment List. The products are consisted by 32 items which are sensitive dual-use items such as carbon fiber, machinery tool, computer and its peripheral (having an APP exceeding 0.5 WT), Jamming equipments, radar, gyroscope, rocket propulsion etc.
In case the exporter come to know under normal course of business that above mentioned goods or technology in category #15-2 will be exported to United Nations arms embargo countries for the development, manufacturing and use for conventional arms, the export license is required and the exporter needs to submit license application to METI for their review.
The existing catch-all control regulation of weapons for massive destruction (“WMD”) are still valid and unchanged.
The “White countries” which adopted major international regime (NSG, AG, MTCR, WA) and have solid export control in place are also exempted of this conventional weapon catch-all scheme. The White Countries are 26 countries, such as Argentina, Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxemburg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States of America.
The “Intermediate countries” which are countries other than White countries and United Nations arms embargo counties, are imposed less strict implementation on conventional arms catch-all. For Intermediate countries, such as most of Asean counties, are applicable to this regulation only when they are “Informed” (*) by METI. This will release the exporter from their responsibility to screen proactively the end-user and end-use of business for Intermediate countries.
In short, Japan will have duplicated catch-all control schemes, catch all for WMD and for conventional weapons. In order to narrow the controlled product list for conventional arms catch-all, METI developed new product list category #15-2.
The response of Japanese business society is somewhat mixed emotion. Although they understand the necessity and criticality to make contribution to global security, the new regulation is quite complicated and is likely to make additional burden to business operation such as additional compliance screening of clients, compliant to customs procedure, and training and awareness to employees for new regulation etc. With such a response from industries, Center for Information on Security Trade Controls (“CISTEC”) which is association of exporters in Japan, gave their opinion as representative of Japanese industries to METI that such new regulation is too complicated to effectively implement in day-to-day operation and proposed more simplified alternative regulations and rules.
Until its effective date on November 1st, 2008, some minor modifications of the rule may be in place, but the implementation of this conventional arms catch-all control is inevitable, the traders need to catch up the new regulation and understand its implication to each business to be compliant to the export control law.
(*) “Informed” condition
METI monitor export activities by closely working with Customs, foreign government and other sources. If an exporter has been so informed by METI on a particular export, the exporter must obtain an export license. The “inform” is given when METI considers that the items to be exported may be used for the development, manufacturing, use of storage of WMD and/or missiles. Over 40 “informed” cases took place during the period from April 1st, 2002 to the end of March 2006, according to METI.