METI disclose EU-JPN ECCN comparison table on its web site

This is good news for global trader who frequently communicate in Japanese export control matter. Japanese export controlled items are substantially same as EU because JPN is members of international regimes such as NSG, AG, MTCR and Wassenaar Arrangement.
However, the difficulties are in its numbering scheme which is totally different from the rest of the world, and in addition, language barrier always exist.

For example, 5A002.a is defined as 輸出令９項(7) 省令第８条一項九号. In English, it is described as "Export Trade Control Order category 9, (7), Ministerial Ordinance article 8, paragraph (1), item (ix)".

METI announced on Oct 20 that they made up the conversion table of JPN-EU controlled items list in MS-Excel spreadsheet format and disclosed in their web site. It is; http://www.meti.go.jp/policy/anpo/hp/eulist_taihihyo.html

I downloaded and briefly looked through the list. Although it contains more than 2,600 rows, it is simple, concise and easy to use. Looks useful for communicating with counterpart in foreign country because EU list is adopted by Singapore, Hong Kong, and Malaysia etc, and similar to US ECCN. This is good initiative and worth while praising the significant effort by METI.

Export control web site of IBM Japan

I happen to find IBM Japan's export control web site, which advice general export control policy of IBM Japan and the procedure of providing the classification statement (in Japanese!).

http://www-06.ibm.com/ibm/jp/contact/dialibm/exempt.html

I like this site, this is really neat and concise, explaining embargo country policy, what is classification is, and what kind of their product is under control with very simple manner so that normal business people can easily understand.

One thing noteworthy is that IBM Japan declare they "don't issue parameter sheet". Perhaps this implies they issue self-classification statement whether the product is controlled or non-controlled and ECCN, but don't provide technical specification with parameter sheet as supporting document. This practice is actually not welcomed in Japanese business society, most of Japanese customers who intend to export the products by themselves strongly require parameter sheet by manufacturer. IBM Japan's decision is operational-friendly, but may not be customer-friendly in Japanese business perspective. I would like to see whether their practice will be accepted in Japan.

Japanese Customs Published Results of Annual Post-Entry Audit

In an effort to ensure compliance with Customs laws, particularly with regard to making correct import declarations and paying the correct taxes and duties, Japan Customs under the Ministry of Finance (“MOF”) conducts post-entry audit every year. The post-entry audit is conducted to review the import declarations of importing companies and determine if correct duties and taxes have been paid. On October 19, 2010, the MOF published on their website the results of the post-entry audit conducted between the period from July 2009 to June 2010. During this period, the Customs team conducted post-audits on a total of 6,204 companies. The post-entry audit team’s findings are summarized as below:

Amount of penalty collected on incorrect import declarations is the highest based on historical records
The total non-declared and short-declared related value of all investigated companies was approximately JPY198 billion (approximately US$2.4 billion). The amount of penalty including shortage of duty & tax was approximately JPY14.5 billion (approx. US$179 million), an increase of 12% compared with previous year’s post audit results. This amount of duty & tax shortage and its penalty are the highest and worst in the history of customs valuation relating to import declarations.

Increased Number of Non-Compliance Companies
The post-entry audit team investigated a total of 6,204 companies. Of these, 4,356 or 70.2% of companies investigated were found to have failed to make correct import declarations, the numbers of non-compliant companies increased 1.3% compared with previous year. The average penalty amount per company was JPY3.3 millions (approx. US$41,100).

The top 5 product categories and its short duty & tax declarations amount are as follows. These top 5 categories make up 52.2% of short duty/tax amount.
1. Electrical Machinery (Chapter 85) JPY2.63 billions
2. Processed Food (Chapter 21) JPY1.67 billions
3. Machine and Mechanical appliances (Chapter 84) JPY1.26 billions
4. Apparel and clothing knitted or crocheted (Chapter 61) JPY0.75 billions
5. Apparel and clothing not kitted or crocheted (Chapter 62) JPY0.73 billions

Typical short-declaration case examples are as follows;
- The cost of material which was provided free of charge basis to an exporter of finished goods was not included in the import declaration value.
- The transaction price was variable depending on the sales result in Japan and it was retroactively adjusted. The variance amount was paid to an exporter, and the adjusted amount was not included in customs declaration.
- False application of preferential tariff. Although an importer don’t have appropriate certificate of preferential tariff for importing goods from China, declared as eligible goods of preferential tariff.

Japanese Customs conduct this post audit in customs valuation every year by randomly picking up the target companies. For recent years, the non-compliance rate continue to be higher in level of approx. 70%, the penalty amount is slightly increasing year by year, and no sign of decreasing. Non-compliance with customs laws may result in imposition of huge penalties and loss of credibility, it is encouraged for importers to conduct customs health check in order to find potential problem and manage the penalty risk.