Japanese Trader arrested in violation of Catch-all

According to various newspaper report, the president of small trade house in Tokyo, Toko Boeki, and the president of two other companies who cooperated with Toko Boeki were arrested in violation of Foreign Exchange and Foreign Trade Law ("FEFTL") by attempting the export of magnetic measuring devices supposedly to North Korea via Myanmar and Malaysia.

A magnetic measuring device is considered as dual-use item which can be used for development and manufacturing of missile. Any of news report don't indicate the ECCN for this device, and reported as violation of Catch-all control. In Japanese classification, it is reported as Category 16 in Export Trade Control Order Appendix I, which covers almost all general industrial goods except food and wooden products.

Actually, the name of Toko Boeki is not new in the export violation to North Korea. It was reported in end of Feb this year.

Newspaper resource report Toko Boeki was once "informed" by METI to apply export license, but they disregarded this warning from METI, and tried to export again without license in Customs declaration under another exporter's name. The companies who cooperated with Toko Boeki are as below.

Taikyo Sangyo Co., Ltd. http://www.taikyosa.co.jp/index.html

Riken Denshi Co., Ltd http://www.rikendenshi.co.jp/

Toko Boeki tried to export the device with receiving order inquiry from the Beijing office of North Korea related entity. This entity is reported as "New East International Trading Ltd." which have close relation with North Korea government and have been involved in Weapon of Massive Destruction ("WMD") and listed as restricted entity in METI's proliferation end-user list.

With the recent development of missiles and nuclear facility in North Korea, the export control is getting more focused in terms of risk management of company. It is critical for trader to understand and manage export control properly, and is encouraged to conduct end-use screening and minimize diversion risk as due diligence.

(Source: METI web site: http://www.meti.go.jp/press/20090629014/20090629014.pdf )