Violation case study - Seibukosan to North Korea

On July 20, 2011, Ministry of Economy, Trade and Industry ("METI") published press release announcing the administrative penalty of small Japanese trader, Seibukosan, who exported a power shovel to North Korea without export license.  The penalised company is very small company located in Kumamoto prefecture in Kyushu island, western part of Japan.  According to the press release, after beingf "informed" by METI (this "inform" means the order by METI to apply export license under Catch-all control regulation), the Seibukosan exported the power shovel (which is supposed to be under Category 16 of Export Trade Control Order) to North Korea via China without export license.  This illegal export was made in April 2009 and the violation of Article 48 (1) of Foreign Exchange and Foreign Trade Law ("FEFTL").

As administrative sanction by METI to this trader, export prohibition (both to a company and to a individual who run this company) for One year and one month (from July 27, 2011 through August 26, 2012) is imposed.  According to Article 53 of FEFTL, the maximum penalty is for a period of not more than three years.  (So, 13 months are not so bad?)

As for criminal penalty, METI already prosecuted Seibukosan in July 2009 in violation of FEFTL, the judgment in Fukuoka District Court was monetary penalty JPY 1,200,000 and the imprisonment for one year and half.  (but with suspended sentence for 3 years)

I hear recently lots of FEFTL violations to North Korea.  Not only WMD catch-all violation, but Japanese government have embargo stance to North Korea, even export of luxury item or commodity items are basically prohibited.  Most of violations are by small companies who seek easy profit without compliance mind.

(Reference source: http://www.meti.go.jp/press/2011/07/20110720003/20110720003.pdf    )