2011年4月25日月曜日

Extra-territorial provision of Japan's export control?

Japan's export control is defined in the Foreign Exchange and Foreign Trade Law ("FEFTL").  The goods trade is prescribed in Article 48, and the technology transmission is in Article 25.

If you closely read the FEFTL, you may find Article 5 define the scope of application of FEFTL, and it gives impression that Japan's FEFTL has extra-territorial provision.

(Scope of Application)
Article 5:   This Act shall also apply to acts committed in a foreign state by a representative, agent, employee or other worker of a juridical person having its principal office in Japan in regard to the property or business of the juridical person.   The same shall apply to acts committed in a foreign state by a person having his/her domicile in Japan, or an agent, employee or other worker of that person in regard to the property or business of the person.


People may have question, hey, Japan's export control is extra-territorial effect in its implementation?
The answer is mostly No under export control.

The Article 5 provides the exception of the "principle of territorial jurisdiction".  FEFTL may be applied to Japanese company's employee or subsidiary overseas regardless of its residency.  Because the entity who is under influence of Japanese company and represent its interest should be restricted under the FEFTL for its strict enforcement.
However, in its interpretation and practice in this FEFTL Article 5, it is considered this provision is not applied to export of goods, but only to the transactions with non-resident such as international payment prescribed in Article 16. 
Also, it is important to note there is no Order, Ordinance, or Notification regarding re-export of Japan origin goods.  Japan don't regulate re-export of items from one foreign country to another foreign country.

What coming to my mind about this FEFTL Article 5 is that Malaysia Strategic Trade Act ("STA") which have extra-territorial clause in the STA.    STA Clause 4 is clearly titled as "Extra-territorial application", but it is very short and general, and the re-export (like US EAR) is not in scope of STA.  No regulation about re-export is found in Malaysia's export control scheme.  I'm wondering Malaysia STA's Clause 4 is just expected similar effect and with intention like Japan's FEFTL Article 5?

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