- Made transparent criteria in prohibition of transfer of defense equipments.
Overseas transfer is not allowed if:
a) The transfer is against world treaty or agreement Japan committed.
b) The transfer is against the obligation imposed by UNSCR.
c) The transfer is likely to be in the country where armed conflict happens.
- Limited permission of transfer, strict review of license, and make the judgement publicly transparent.
In case the transfer is other than above case in first rule 1, Japanese government may give permission of transfer with strict review of licence application, whether the transfer is, a) to cope with peace contribution and international collaboration, or b) to contribute to national security in Japan. In addition, if the transfer is very critical or sensitive case to national security or world peace, the permission is discussed in National Security Council which is the top tier of Japan's national security decision. The discussion there is publicly disclosed following the existing relevant law. (Act on Access to Information Held by Administrative Organs)
- Secure appropriate control of end-use and prevent re-transfer to third countries.
In order to satisfy the above case in second rule 2, the permission is only granted to the transaction which is appropriately controlled in end-use. This means, basically, thorough end-use confirmation is required and the usage for other purpose is not allowed. Also, the re-transfer to third country is required pre-approval of Japanese government. (This obligation is to be imposed to the government who is first and original importing country.)
Comment: The impact of this policy change would be rather limited to large Japanese companies who have manufactured defense equipment for Japan Self-Defense Forces. They will enjoy more flexible collaboration with overseas counter partners by exchanging related technology or samples (easier than past) in designing or developing defense equipments. The likely permissible transaction is basically government to government project, e.g. with US and allied countries. The licence review would be very severe and lead time would not be predictable. My personal feeling is the "basic idea is still prohibition with certain exemptions".
Note to export control professionals: The definition of "Defense Equipment" under this principle.
The "defense equipment" is defined as arm and its technology. "Arm" is among the items under Category 1 of Export Trade Control Order ("ETCO") Appendix 1, and to be used by military directly for battle. Its technology is the technology pertaining to the arm's design, manufacturing or use. (more broad meaning than "necessary to")
This means the definition of arms under this principle is narrower than simply Category 1 of ETCO, and dual use items are, off course, not defined as defense items. Even if the item is classified under Category 1, certain items may be excluded from defense equipments, namely, all items of Category 1 is not automatically regarded as arms under this new principle. For example, rifle gun used for sporting purpose is likely to be excluded from the review of this new principle.