Export Violation by Japanese Machine Tool Company Sugino Machine Ltd.

According to the announcement by METI on Oct. 17, a medium size Japanese machinery tool manufacturer, Sugino Machine Ltd. (number of employee 719) illegally exported their machine, which had needed export license by METI due to its high technical specification. The violation had been from 2000 to 2006, and exported hundreds of machines to Germany, China, Thailand, USA etc. It is not reported their machines were found in concerned countries such as North Korea.

Their machines have high specification which is required to get export license in exporting to basically all countries.
According to Nikkei newspaper, they neglected this license application by intentionally lowered technical specification because they wanted to make the delivery earlier by skipping license application to METI.

According to Sugino's company website, this violation was found in their internal investigation in December 2007 and voluntary disclosed this violation to METI in March 2008.
METI gave penalty to Sugino, however it is warning only, and required them to improve their internal compliance. Based on Foreign Exchange and Foreign Trade Law ("FEFTL"), it would be possible for METI to give penalty of export prohibition less than 3 years. This time, METI just gave warning rather than giving severe penalty because :

- Their products were not exported to Iran or North Korea and not used for development of weapons for mass destruction.
- The end-users were not denied party or concerned parties which may threat the national security.
- They voluntarily reported their violation to METI and committed to improve their export compliance operation.

Above facts are important factors to decide the magnitude of penalty by METI.
Companies who export such high technical specification must understand their importance of keeping this export regulation.

(Source: METI web site http://www.meti.go.jp/press/20081017006/20081017006.pdf )
(Source: Sugino Machine Ltd http://www.sugino.com/sitemap/1017.html)
(Source: Nikkei Newspaper http://www.nikkei.co.jp/news/shakai/20081018AT1G1703217102008.html )