Following the yesterday's article, I have another concern for implementation of amended FEFTL in export control of technology transfer, and actually this is much more important for operation of real business world.
(2) When is the point in time of export in technology?
Question: If Japanese company export group of various software to foreign country through Internet and the software can be used only after the exporter give "virtual key" to foreign company, when is the point in time of export in technology? The assumption is that the software works only after activating with key, and foreign company cannot use the other software without the key. The security by key is never broken. The point of time of export is whether:
a) the time when foreign company receive the software? or
b) the time when they activate the software by key?
The answer is, it is b). The time when the software is activated by key.
This is based on the "Ekimu Tsutatsu" (Notification), it prescribe that the point of export of technology in such case is "the time when the technology is transferred to non-resident".
Trust me, this answer was verified by METI, and even in US EAR's case, the answer is same.
Actually, many of software company have similar business model. Give series of software to customers initially, and then provide activation key depending on customer needs and bill to customer based on the activation key accordingly.
Now, my concern is the amended new FEFTL have new provision that the permission is required if document, drawing, or electric media which have sensitive technology is exported.
In addition, this is applicable to transmission of technology. The amended FEFTL impose more "cross boarder" check of technology transfer. This is understandable to cope with actual business world and make the export control more reliable and practical.
Then, concern coming to my mind, the activation key business model as above may be affected by amended law? The software company may need to get license for not only key activated software, but also for non-activated software provided to overseas company even if it is never be used?
It is too early to give definite answer before Cabinet Order, Ministerial Order, and related notification are announced. We need to check and read carefully after they are disclosed.
As usual, the devil is in the details. Stay tuned.