Global Trade Compliance

Japan-Peru EPA enter into force on March 1, 2012

2012-01-24T18:20:00.001+09:00

On Jan 24, Ministry of Foreign Affairs of Japan ("MOFA") announced EPA between Peru and Japan will enter into force on March 1, 2012.

http://www.mofa.go.jp/announce/announce/2012/1/0124_01.html

The EPA was signed on May 31, 2011 after seven negotiating sessions since 2009. For Japan, the EPA with Peru is the 13th EPA that Japan has concluded, and the third with the Latin American economies, following Mexico and Chile. In fiscal year 2010, Japan exported US$ 1.1 billion worth of goods to Peru, while importing US$ 2.5 billion worth of goods from Peru. Tariffs on about 99 percent of total trade will be abolished between the two countries within 10 years after implementation of the EPA.

Peru’s import duty on certain industrial items, currently at nine percent for most of items, such as cars, automotive parts, steel products, machinery, and electrical items, will be reduced either progressively or immediately to zero percent in the 10th year.

Japan’s import duties on almost all industrial items will immediately be duty free upon implementation of the EPA. Import duties on some agricultural products will be reduced through a tariff quota system or progressively reduced within 10 years, such as pork, chicken, asparagus, and corn. However, some of Japan’s sensitive agricultural products are excluded from the tariff reduction, such as rice, wheat, and beef.

The noteworthy point of the EPA with Peru is the origin of goods certification system. A self-declared Certificate of Origin (“CO”) method is adopted in Japan-Peru EPA and can be issued by approved exporter, while an ordinary preferential CO issued by designated government authority (in Japan, issued by Japan Chamber of Commerce & Industry) is also available which is the common method in other EPAs Japan have concluded. An exporter who make use of Japan-Peru EPA can choose either method. The self-declaration CO system is expected to help exporters to minimize administrative costs and lead-time in export transactions.

So far, self-declaration CO systems is available only for Japan-Swiss EPA, and will be available in Japan-Mexico EPA shortly by amending existing agreement.

Japan Customs Posts Rules of Origin Outline for EPA

2012-01-17T11:13:00.002+09:00

Japan Customs web site provide English information, but notoriously it is far less than original information in Japanese. Recently, Japan Customs posts EPA Rule of Origin guidance in power point style pdf in web site as below.

http://www.customs.go.jp/english/origin/rules_of_origin_epa.pdf

This material is sufficient enough basic level for beginner and mostly exact translation of original material in Japanese.

Advance level guidance material is actually available in Japan Customs web site as below, but again, the material is not available in English.

http://www.customs.go.jp/kyotsu/kokusai/seido_tetsuduki/gensanchi.htm

Singapore adopt Advanced Export Declaration (AED) from 1 April 2013

2012-01-16T14:02:00.002+09:00

Singapore Customs announced on Jan 12, 2011 that they will implement Advance Export Declaration (AED) for all exports from 1 Apr 2013.

Currently, Singapore Customs requires advance customs export declarations only for controlled items (such as Strategic controlled goods under Tier 1 individual license) or exports by land. Export customs declaration of non-controlled items by sea and air are actually allowed to be made within three days of the goods leaving Singapore under existing administrative exemption (IE Notice No. 2/76). This exemption rule will be rescinded with effect from 1 Apr 2013.

In order to allow the industry sufficient lead time to complete the necessary changes to their work processes, Singapore Customs has announced the implementation date of 1 Apr 2013 in advance. In addition, there will be an 18-month adjustment period starting from 1 Apr 2013 to 31 Sep 2014. During the adjustment period, traders will generally not be penalised by Singapore Customs for non-compliance with AED requirements. However, all other customs offences and penalties will still be applicable during the AED adjustment period.

According to the media release by Singapore Customs, "this regulation development aims to strengthen Singapore's supply chain security and align its export declaration practices with international norm."
Yes, from AEO mutual recognition perspective, and also from Security Trade Control (international regimes as as Wassenaar Arrangement) perspective, this practice is norm for other countries, Japan, US, China, Australia as well as EU.

I'm accustomed to Japan's strict customs declaration procedure, so "the export declaration practice after leaving the goods" in Singapore has been something incredible, personally for me. This regulatory development in Singapore makes sense and is thought as "back to normal".

(Reference: Singapore Customs web site)
Circular: http://www.customs.gov.sg/NR/rdonlyres/6CEA916D-F762-46EE-9090-2D25FB3E3BDE/28740/Circular012012AEDImplementation1.pdf
Media Release: http://www.customs.gov.sg/NR/rdonlyres/6185D945-DC37-4EA6-B5B7-3EC35CC8C60E/28738/PressReleaseonAEDImplementation_FinalWeb.pdf

Singapore Customs Updates STS Handbook

2012-01-09T13:46:00.000+09:00

On December 1, 2011, Singapore Customs updated STS Hand book on their web site.
This is to reflect the update of TradeNet to Version 4.1 on January 1, 2012. So, no significant change of legal framework by itself. There are some changes in export declaration procedures and processing time in Tier 2/3 permit. The STS Hand book is available in Singapore Customs web site as below.

http://www.customs.gov.sg/stgc/topNav/res/Publications.htm

However, for traders, it is inconvenient that there is no indication what parts in the STS Hand book were updated. So, my colleagues in Singapore kindly made comparison chart of what part of STS Hand book were update in Trade Alert as blow.

http://www.bryancaveconsulting.com/sitebranches/publications/docs/BCIC%20Export%20Control%20Alert%20(STS)-Jan%202012.pdf

(Note: I find typing error in middle of page 2 of above Trade Alert.
4.2 - "How to declare a Tier 2 permit in TradeNet 4.1?" should be 4.6.
In same manner in the left column, 4.2.1 should be as 4.6.1.)

Malaysia STA update

2012-01-04T17:13:00.001+09:00

I find Malaysia MITI web site for Strategic Trade Act ("STA") 2010 is now beautifully streamlined. Until last month, the information was like "just pasted without order".

I was so busy in December for project relating to FTA, so I missed writing the article of Malaysia export control update, which was announced early December.
The significant (and welcomed) change for trader is transshipment permit is no longer required for 5A2 and 5B2 (encryption items) as long as it meets the requirement of Regulation 25.

See the English version of this notification as below:

http://www.miti.gov.my/cms/documentstorage/com.tms.cms.document.Document_21ed49c8-c0a81573-4c6f4c6f-caa55209/Circular%20on%20the%20Amendments%20to%20the%20Strategic%20Trade%20Regulations%202010.pdf

Singapore slightly update export control list Jan 01, 2012

2012-01-01T11:37:00.001+09:00

I come to know via Singapore Customs news letter on Dec 29, 2011, Singapore will update its export control list on 1st Jan 2012 in order to reflect latest amendment of international regimes such as NSG, AG, MTCR and WA. The news source is as follows.

http://www.customs.gov.sg/stgc/leftNav/str/Updates.htm

I quickly looked through the list and find the update is only limited to Category 1C351, 2A001, Category 3, Category 4, Category 5 - part I, and small number of deletion in Category 6, 7, and 8.
It is basically deletion and relaxation of items with some major changes in recent a few years.
The summary can be found in http://www.customs.gov.sg/NR/rdonlyres/F855FE58-01E3-4D86-B4CD-761306C37630/28694/StrategicGoodsControlAmendmentOrder2011.pdf

Singapore's policy in amendment of export control list is basically to follow EU dual-use items list.
As EU list is slow to reflect the update of international regimes, the latest EU list is still Regulation 428/2009.
http://trade.ec.europa.eu/doclib/docs/2009/june/tradoc_143390.pdf

While US and Japan have already reflected the Wassenaar list of December 2010 (e.g. US EAR on May 2011 and Japan list on July 2011), there has been discrepancy of list (items addition/deletion, and difference of technical parameter etc) between Singapore list between other nation's list. I hope Singapore's decision is welcomed for global traders. As soon as EU revise its list, Singapore will also update entirely its export control list upon release of the revised EU’s control list.

The inconvenient point for global traders are the existing export control list, or "Strategic Goods (Control) Order 2010" is not amended on Singapore Customs web site, therefore traders need to refer to both new list - the "Strategic Goods (Control) (Amendment) Order 2011", and the existing list "Strategic Goods (Control) Order 2010" when referring to the export control list. In other words, for certain period until whole list is revised, traders need to carefully refer two lists.

Japan Lifts Ban on Export of Weapons Policy

2011-12-31T10:45:00.001+09:00

Japan’s cabinet decided and officially announced as comment of Chief Cabinet Secretary on Dec 27, 2011 that Japanese government effectively lift a government policy of prohibiting weapons shipments that has banned Japanese arms makers export military items for joint development of military technology. This government policy change to abandon the Cold War-era restrictions was decided because Japan seeks to minimize costs for developing and manufacturing advanced military technology in areas such as a joint development program of jet fighters with the U.S. While there have been case-by-case exceptions in the past, such as return shipment to originating country, this decision is first major revision since the ban was introduced in 1967 and tightened in 1976. Japan’s commitment to refrain from arms exports, declared in its so-called “Three Principles”, was designed to prevent weapons shipments to the communist bloc at the height of the Cold War, as well as to countries under United Nations arms embargoes and war zones. Although the revision has been hotly debated for years, that proposal has been pending by strong opposition from a minority partner in Japan’s coalition government.

While Japan’s government policy is changed accordingly, the export related law and regulations such as Foreign Export and Foreign Trade Law and following Orders and Notifications are not expected to be amended. The basic policy to authorize export license of military items continue to be denial, and only for exceptional cases such as co-development of arms with U.S. and allies, the license may be granted with strict end-use review by Ministry of Economy, Trade and Industry (“METI”) which is export licensing government authority in Japan. In order to prevent proliferation and diversion risk to concerned countries, very strict license review by METI is likely to be conducted. From trader’s point of view, relax of prohibiting export of military item is likely to be limited effect only to the government involved transactions.

(Resource - Japanese: http://www.kantei.go.jp/jp/tyokan/noda/20111227DANWA.pdf )
(Resource - English: http://www.kantei.go.jp/foreign/noda/topics/201112/20111227DANWA_e.pdf )

Export control vs nationality discremination

2011-12-22T15:48:00.004+09:00

I find thought-provoking news article in Asahi News Paper on Dec 20.

http://ajw.asahi.com/article/behind_news/AJ201112200022

On Dec 19, Tokyo District Court sentenced as illegal that Tokyo Institute of Technology ("TIT" or locally called "Tokyo Koudai") rejected the admission of Iranian national to TIT's nuclear reactor engineering research center because of concern in nuclear related technology transfer to Iran.

Tokyo District Court mentioned TIT's refusal of the entrance is "against Constitution and discriminating treatment to nationality".

For export control professional, this is dilemma and very touchy issue, technology transfer concern vs nationality discrimination. From TIT's point of view, nuclear related technology education to Iranian national may lead to violation of FEFTL and TIT insist "to prevent nuclear proliferation concern, we follow UNSCR".

Above is university's case, but industry increasingly try to hire foreign nationals than ever, nationality and export control is sensitive issue, as this court case shows.

METI update WMD Proliferation Concerned Parties List on Dec 9, 2011

2011-12-09T15:33:00.001+09:00

According to the public announcement in METI export control web site, METI announced updated Foreign Users List (WMD Proliferation Concerned Parties List) on December 9, 2011.
This is the second update of this year following September 1st, 2011.

METI added 18 Iranian entities, and 2 entities in UAE, making it total 374 entities. This is to reflect UNSCR 1929 which is against Iran's missile and WMD activities.

Unique point is the entity of UAE have never been in this list. Below UAE entities are first UAE entities in this list.

Modern Technologies FZC (MTFZC)
Qualitest FZE

The list is available in below URL and update part is highlighted in color.
http://www.cistec.or.jp/members/report/express/111209/3_t08kaisei_kaiteikasho.pdf

Export Control Violation again in Japan

2011-12-07T22:20:00.000+09:00

According to major news papers in Japan on Dec 7, 2011, an export control violation is reported again in non-license export of carbon fiber to Taiwan and Hong Kong. Below is the news paper article.

http://www.yomiuri.co.jp/national/news/20111207-OYT1T00634.htm

The point of this violation case study is wrong use of low value license exemption. In order to shorten shipment lead time (by skipping the METI license application), the company falsely declared the value of the export items under JYP 50,000. We can know from this article what was the item category number.
I will make more analysis on this case study later.

The company web site who is supposed to make violation is here: http://www.krefine.com/en/guidance/index.html

Export control violation of semiconductor equipment to China

2011-11-30T10:33:00.000+09:00

According to some major newspapers in Japan, one of Japanese trading companies was raided by police of Kanagawa prefecture on November 29, 2011. The company name is Intertec Corporation (http://www.itcj.com/e/index.html) who is small company with about 50 employees, founded on 1994 with the capital amount JPY 100 millions, and sell semiconductor manufacturing equipments and parts.

The news paper report the company exported semiconductor manufacturing equipment with controlled software to China without required export license. It seems (simply my guess from limited news article) the items are likely to be controlled under Category 7 (16) and its related technology of Japanese export control list (or equivalent to Category 3B001 and 3D001 in US ECCN).

Also, the news article imply the goods and technology might be used for development of missile technology in China. If this is true, the case is also the violation of WMD catch-all control.

I find on Intertec's company web site they mainly sell "used" semiconductor equipment. As many of export control professionals know, the classification whether the used equipment is controlled or not is difficult and require special knowledge and skill. This operational challenge may be behind this violation case.

Hong Kong update Strategic Commodities List

2011-11-21T17:54:00.000+09:00

In order to comply with the controlled item list update of international regimes, such as Wassenaar Arrangement ("WA"), AG, MTCR, and NSG, Hong Kong announced their control list update on Nov. 18, 2011.

The announcement is available here: http://www.stc.tid.gov.hk/english/circular_pub/2011_stc07.html

I quickly looked through the Annex, which indicates the full details of amendment. I come to know it included the WA's latest list update (in December 2010) in Category 3 and Category 5 part 2, which means in link with US EAR and Japan's export control list.

Russia join WTO!

2011-11-11T10:24:00.001+09:00

Russia’s accession to the WTO cleared a major hurdle when the WTO Working Party on its accession approved on 10 November 2011, according to WTO news release.
After Ukraine, former Soviet Union country, joined WTO in May 2008, Russia has been "last big one" of non-WTO country.

The major interest for traders would be how tariff will be reduced.

See below URL, and "Market access for goods — tariff and quota commitments" provide the summary information how tariff will be changed.

http://www.wto.org/english/news_e/news11_e/acc_rus_10nov11_e.htm

BIS proposed new rules for aircraft and related items

2011-11-10T14:16:00.000+09:00

On November 7, 2011, BIS published proposed rules for aircraft and related items that no longer warrant control under Category VIII of the U.S. Munitions List ("USML").
http://www.bis.doc.gov/news/2011/fr_11072011.pdf

In short, this is another important step in US Export Control Reform, following by July 15 proposed rule this year, which was integration of USML Category VII with EAR's Commerce Control List ("CCL").
This time, it is USML Category VIII (aircraft and related items) into CCL, in new ECCN 9A610, 9B610, 9C610, 9D610, and 9E610. The third digit of ECCN ("600 series) are for ex-USML items after incorporated into CCL.

Public comments will be accepted until December 22, 2011.

Japan will change definition of "Use"

2011-11-08T13:41:00.001+09:00

On November 7, 2011, Japan METI announced new notification draft to seek public comment regarding export control term's new definition. It is to change the definition of "Use". Perhaps export control professionals are familiar with this term in technology transfer, the controlled technology is defined as "development", "manufacturing", or "use" relating to controlled item. The notification draft specifically define the interpretation of "Use" with the change of the notification.

In Japan, the definition of "Use" is not defined in controlled item's list, but in METI notification called "役務通達 or Ekimu Tsutatsu". Currently, the definition is described as below.

Use is defined as "Operation, installation (including on-site installation), maintenance (inspection), repair, overhaul, refurbishing etc which are stages other than development and manufacturing.

In new notification draft, it will be changed as below, specifically limiting the words:
Use is defined as "Operation, installation (including on-site installation), maintenance (inspection), repair, overhaul, and refurbishing" (Please be noted the 'and' here is not same as the definition of US EAR. Perhaps 'or' may be better in Japan, as all six activities are not necessary to trigger a license requirement. Any one of them is fine to be recognized as sufficient. )

The difference is that the new definition is narrowed by removing "etc., stages other than development and manufacturing". At this point of time, with this phrase, Japan's definition of "Use" tend to be interpreted more broadly and to cover more "use" technology than other countries who follow Wassenaar Arrangement.
This change is to reflect and to follow the Wassenaar's definition which will make Japanese export control practice same as other WA countries.

The schedule when this draft will be in effect is still unknown.

Update: METI officially updated the notification and announced this new definition of "use" is effective on December 26, 2011.
http://www.cistec.or.jp/export/express/111226/4ef02a6e5dfe8.pdf

(Source: http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595111066 )

Japan list Libya as restricted country, remove Sierra Leone

2011-11-05T11:00:00.001+09:00

On November 2, 2011, Ministry of Economy, Trade and Industry ("METI") of Japan posted public comment of export control regulation change on government web site.
http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595111060

The proposed change is to add Libya into restricted country list (UN arms embargo list) under conventional weapon catch-all rule, while removing Sierra Leone from this list
The tentative enforcement date is February 1st, 2012. This proposal is to follow United Nations Security Council Resolution ("UNSCR") 1970 which impose more strict export control of arms to Libya.
As for relax of control to Sierra Leona, it is to follow the UNSCR 1940 which clear the arms embargo to Sierra Leone.

What would be the impact to trader? This change does not affect to license management of WA dual-use controlled items, because this is under conventional weapon catch-all scheme. A trader who export industrial goods (nearly all goods except food or wooden product) to Libya need to conduct end-use screening to check whether the goods are used for development, manufacturing or use of conventional weapon items. (In other words, the end-use screening for conventional weapon to Libya have not been not required so far. Only WMD end-use check.) As for Sierra Leone, the obligation of the above mentioned end-use screening will not be required.

This is to impose more strict end-use control to export operation to Libya, while relaxing it to Sierra Leone. I don't think so many Japanese companies have big business with Sierra Leone, while Libya may be attractive emerging market especially for energy industry.

AEO mutual recognition between Japan - Korea effective on Nov. 1, 2011

2011-10-17T16:12:00.000+09:00

As announced in May 2011, Japan and Korea signed the mutual recognition of AEO in both countries.
http://japantradecompliance.blogspot.com/2011/05/aeo-mutual-recognition-between-japan.html

Japan Customs announced the implementation of mutual recognition with Korea will be in place on Nov. 01, 2011. The procedures how the AEO operations will make use of the benefits in customs declaration can be found in following Customs web site.

http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-10.pdf

Japan-Mexico EPA protocol amending signed

2011-10-02T11:43:00.000+09:00

According to press release issued by METI and MOFA on September 23, 2011, the protocol amending between Japan and Mexico was signed. The Japan-Mexico EPA entered into force on April, 2005 and it greatly contributed to the trade volume increase for both countries.

The new protocol is expected to promote trade liberalization, and main topics are as follows.

Further improvement of market accesss conditions related to trade in goods:
Mexican side:
- Acceleration of the elimination of tariffs imposed on certain auto parts and paper for ink-jet printers (They will be eliminated in 2012, two years earlier than the original schedule).
- Elimination of tariffs on mandarin oranges and the establishment of tariff rate quotas for apples and green tea.

Japanese Side:
- Expansion of tariff rate quotas and reductions of in-quota tariffs applied to beef, pork, chicken, orange and orange juice
- Establishment of a tariff rate quota for agave syrup: Fructose syrup from Agave (Negotiations regarding pineapples, durum wheat, cane sugar, etc. will take place in 2014.)
The application of most-favored nation (MFN) applied tariff rates on particular goods in case these rates are lower than those under the EPA:
- A provision has been added to apply MFN applied tariff rates under the WTO on particular goods in case the MFN rates are lower than the corresponding tariff rates under the EPA.
Introduction of the Approved Exporter System:
- In order to facilitate procedures for certification of origin, the rules on the Approved Exporter System will be introduced.

(Source: MOFA web site http://www.mofa.go.jp/announce/announce/2011/9/0923_01.html )

Update of license exception of technology transfer in Japan

2011-10-01T13:33:00.001+09:00

On September 30, 2011, the change of regulation regarding technology transfer license exception was announced in Japanese METI web site.
http://www.meti.go.jp/policy/anpo/law09.html#019

This update is not significant change, but slight words addition in order to prevent evasion of the law or abuse in license exception under "publicly available" technology.

The regulation change is the Article 9 (2) (ix) of "Ministerial Ordinance on Trade Relation Invisible Trade, etc." which define various license exceptions of technology transfer. Like any other countries, Japan also define the licence exception of publicly available technology, currently as below.

Article 9 (2)
(ix) transactions through which technology in the public domain is provided or technology is provided to make said technology known to the public, and which fall under any of (a) to (e) below:

As of September 30, 2011, following new additional provision is added and effective immediately.
(Except the transaction which aim to provide specific technology to specific person by making it in public domain)

What does it mean? Well, let me give one example case.

One Japanese company aims to provide license required technology to a foreign company. But, as the license application is troublesome and takes time, they try to make use of the license exception of publicly available technology. For example, a Japanese company upload the licensed technology into their web site (making it publicly available) and the upload time onto the web was actually informed to the partner foreign company beforehand. Just after the foreign company download the specific information, the Japanese company immediately delete the information on their web site.

This transaction was not illegal (but seems evasion of the law), but not any more.

Export control violation of pump for chemical

2011-09-18T10:05:00.001+09:00

According to several major news papers on Sept 13, a Japanese machine manufacturer exported pump for chemical plant illegally to China, without obtaining export license by METI.
The company name is Shin Toyo Kikai Kogyo Co., Ltd, medium size pump manufacturer, located in Saitama in Kanto region. They allegedly exported pump for chemical use to a company in China. The end-user is Japanese company's subsidiary, which is auto manufacturing and one of subsidiaries of JFE Steel, steel manufacturing giant in Japan.

Not sure what category the chemical pump is classified. My guess is Japanese Category 3 (2) (or US ECCN 2B350). Because the end-use is auto-manufacturing site of Japanese subsidiary, it is not likely this case is violation of WMD catch-all control. (The detail of the product is not disclosed, this is my guess.)

The president of Shin Toyo Kikai Kogyo admit they prioritized lead time and quick delivery, rather than applying export license to METI which they considered time loss. The lead time of export licens by METI is typically about 1 week, but METI tend to require several supporting documents or end-use statement etc., case by case, the preparation of export license require significant time, energy and cost, especially to an exporter who is not familiar with export control system.

However, they will pay much more time loss (and also credibility loss & money loss!) by this violation.

METI add more FAQ in post-license manegement

2011-09-07T17:10:00.001+09:00

Japanese METI updated the export control license management FAQ on Sept 5, 2011.
Unfortunately for most of global traders, this FAQ is written only in Japanese and no English translation.
What is written in this FAQ is about the procedure of supporting documents and post-license management in exporting Japanese control item Category 4 (18) - Batch mixers and Continuous mixers - or equivalent to US ECCN 1B117 and 1B118.

In exporting such goods, the export license is required with various supporting documents. The supporting documents include (in case by case) the statement of end-user, factory layout plan where the equipments are installed, the oath of NOT relocating the equipment to another location even in another floor in the same property, etc. etc.
What is written here is guideline of such supporting documents and METI's policy of post-license management. As long as the license applicant follow up to clear the diversion risk and non proliferation concern and report to METI in advance if required so, METI don't prohibit relocation of the equipments.

When I talk with non-Japanese export control specialist, some of them complaint about Japanese METI's extra-territorial control. In principle, Japanese export control law is NOT extra-territorial, but some believe the METI's post-license management is substantially extra-territorial effect. That may be partly true from operator's point of view. Why foreign end-users need to have approval of METI when they relocate the controlled equipments which were exported legally under METI license? In order to mitigate such Japan extra-territorial license management practice, METI try to refine the FAQ by providing much guidance with details. Hope this FAQ is provided in English.

(Resource from below URL - in Japanese.)

Q＆A「６．連続式の混合機関連　別表第1の4の項(8)」 ttp://www.meti.go.jp/policy/anpo/qanda065.html

Q＆A「７．連続式の混合機関連別表第1の4の項(8)＜添付資料関係＞」http://www.meti.go.jp/policy/anpo/qanda0655.html

Update of proliferation concern list in Japan

2011-09-01T16:31:00.003+09:00

On September 1st, 2011, Ministry of Economy, Trade and Industry ("METI") announced its update of Proliferation concerned parties list (otherwise called Foreign Users List or Gaikoku User List) on its web site.
This list is similar to Entity List of US BIS. The listed entities are considered as have been involved in development, manufacturing, use or storage of weapon of massive destruction ("WMD"). Please be noted this list is not embargo list. Although trader needs to have close attention to WMD proliferation concern when doing trade with listed entities, if it is obviously clear the item is not used for WMD purpose, the trade is not denied. This list have been updated in practice once a year, last update was September 2010.

The new list can be found here: http://www.meti.go.jp/policy/anpo/law_document/tutatu/t08kaisei/110901EUL/t08kaisei_userlist_kohyo.pdf

In total, the number of entities are increased to 354. I didn't closely check the entity name, but most of the increased entities are in Iran and in North Korea. Indian entities are decreased much.

For global traders, what entity is decontolled, especially in India & China, would be point of interest. The entity names which are removed from the list are as follows.

・【India】Armament Research and Development Establishment (ARDE), DRDO

・【India】Bharat Dynamics Ltd. (BDL)

・【India】Indian Rare Earths Ltd. (IRE), DAE

・【India】Liquid Propulsion Systems Centre (LPSC), Indian Space Research Organisation (ISRO)

・【India】Satish Dhawan Space Centre (SDSC), ISRO

・【India】Solid State Physics Laboratory, DRDO

・【India】United Phosphorous Limited

・【China】China Electronic Product Reliability Environmental Testing Research Institute (CEPREI)

Above entity names are no longer in the list as WMD proliferation concerned parties of Japanese METI.
However, for traders who handles US origin items, it is important to note Indian Rare Earths Ltd. (IRE), Department of Atomic Energy, is still listed on Entity List of US EAR. It is encouraged to double check with other restricted parties list issued by US government.

Export ban sanction again to violator North Korea trade

2011-08-01T14:16:00.004+09:00

According to News Release of METI on July 28, 2011, METI announced again the export prohibition sanction to a violator who made export to North Korea without approval. The penalty sanction is to First Shokai (or First Trade) K.K. who is likely to be a small trade house in Sakaiminato, Tottori prefecture.
The export Prohibition sanction to First Shokai K.K. is for six months (from August 3, 2011 to February 2, 2012) of all goods to all destinations. This export prohibition is applied also to the transaction by third parties.

First Shokai K.K. exported piano and candies etc to North Korea without METI approval via Dalian in China. I believe export control expert easily understand the difference of export "permission" and export "approval" under Foreign Trade and Foreign Exchange Law ("FEFTL"). Obviously, First Shokai K.K. did not export dual-use items which may contribute to the development, manufacturing, and use of Weapon of Massive Destruction ("WMD"), they exported piano and candies which are luxury goods or commodities.

Export Permission = for weapon, dual-use goods, non-controlled items under catch-all based on Article 48 (1) of FEFTL. The items list is in Appendix 1 of Export Trade Control Order ("ETCO")
Export Approval = for luxury goods or commodities, in this particular case, North Korea trade sanction due to UNSCR and Japanese government policy based on Article 48 (3) of FEFTL. The items list is in Appendix 2 (and 2-2) of ETCO.

As for penalty sanction, violation of export "without permission" is much heavier than "without approval".

Export prohibition sanction in violation of without permission = not more than 3 years based on Article 53 (1) of FEFTL.
Export (or import) prohibition sanction in violation of without approval = not more than 1 year based on Article 53 (2) of FEFTL.

Many of export control specialist tend to focus on dual-use items only, but it is also important to pay attention to export approval of Appendix 2 of ETCO, which covers broad range of items.

(Source: http://www.meti.go.jp/press/2011/07/20110728006/20110728006.html )

Update: By the way, apart from METI sanction, it is worth while noticing this violation case is the first criminal prosecution that the offender got imprisonment sentence (1 year and 4 months) without suspended period. This is the first case in the history of export control violation in Japan. In other words, all other export violation cases in Japan have been with suspended sentence.
(http://www.cistec.or.jp/export/ihanjirei/fuseiyusyutu_jiken.pdf)

Japan, India EPA entering into force on August 1, 2011

2011-07-29T11:08:00.000+09:00

On June 30, 2011, Ministry of Economy, Trade and Industry (“METI”) and Ministry of Foreign Affairs (“MOFA”) in Japan announced on their press release that Japan and the Republic of India exchanged diplomatic notes concerning the entry into force of the Comprehensive Economic Partnership Agreement (“EPA”). Accordingly, the EPA between Japan and India enter into force on August 1, 2011. This EPA is Japan’s 12th EPA that enter into force and expected to liberalized and facilitate trade, promote investment, and improve systems in related field of both countries. Tariffs on approximately 94% of total trade will be abolished between the two countries within 10 years after implementation of the EPA.

The tariff concession schedule is available in METI web site as “Annex 1:　Schedules in relation to Article 19” which shows preferential tariff rate of applicable item agreed in this EPA. Traders are encouraged to examine whether the HS code of trading goods are covered in this EPA. We would like to give caution some operational aspects in making use of this Japan-India EPA in following points.

 Rule of Origin (“ROO”) requirement in General Rule

In verification of eligibility of origin of goods, the Japan-India EPA ROO have General Rule and Product Specific Rules (“PSR”). The goods except those in the PSR list must satisfy the General Rule in order to qualify for the Japan-India EPA preferential tariffs. Under the general rule, the qualification of origin is described as "CTSH (change in HS code at the 6-digit level) and local content of not less than 35%”. The “and” indicates that both criteria must be satisfied for the goods to qualify for preferential tariff. This ROO may be operational challenge for traders, as all other EPAs Japan have implemented have rule of “either” HS code change or local value content percentage.

 GSP tariff is no longer available in importing Indian items into Japan

Under the Generalized System of Preferences (“GSP”), GSP preferential tariff has been available to use to Indian origin items in importing into Japan. Upon implementation of Japan-India EPA, basically GSP tariff is not applied to Indian origin items except the case GAP tariff is lower than EPA tariff. Traders who have made use of GSP tariff in trade with India need to take care of the lose of validity of GAP scheme with India upon August 1, 2011. In addition, type of Certificate of Origin (“CO”) is different, GSP require form A, but the Japan-India EPA require the designated CO format called “IJCEPA”. In import declaration in Japan, CO type form A cannot be used for claiming the preferential tariff of EPA.

 Other technical notes in Japan-India EPA.

HS code: HS2007 version
Third Country Invoice: Available to use. Need to fill in Field 7 and 8 on CO form IJCEPA.
For the import of the goods which value are under JPY200,000 into Japan, the CO submission to Customs can be exempted in claiming EPA preferential tariff.

(Reference: Japan - India EPA tariff staging chart: http://www.customs.go.jp/kyotsu/kokusai/gaiyou/india/india_staging1108.pdf )

Violation case study - Seibukosan to North Korea

2011-07-22T17:16:00.000+09:00

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 )

AEO benefits implementation starts in Japan-Singapore

2011-07-22T13:18:00.000+09:00

With mutual AEO recognition with Singapore, Japan start its implementation of benefits of AEO from August 1, 2011. The customs guidance how to make it in declaration transaction is announced in Customs web site.

http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-07.pdf

Malaysia export control update

2011-07-14T15:24:00.000+09:00

As many of traders who are involved in Malaysia export operation are interested in, Malaysia implement the export control regulation based on Strategic Trade Act 2010 ("STA") from July 1, 2011.

Recently I find "Slides for STA 2010" in Malaysia MITI web site. It is presentation material concisely summarizing the STA rule and implementation. Most of information in this slide is not new, but good reference material for briefing how the regulation works.

But I find interesting topics as below which imply the full implementation is practically not on July 1, but will be on August 1. Belows are page number 28 and 29 of the slides. Yes, the rule is from July 1st, but still the customs declaration & online permit application is under trial basis until July 31.

SELF DECLARATION
- Effective 1 July 2011, there will be a compulsory field in the K2 and K8 forms (*) to declare whether the products being exported are strategic items or non-strategic items.
(*) These forms are customs declaration forms in exporting out of Malaysia.
- If your product is ticked as strategic item, the system will then prompt for the STA export permit license number to be entered.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011. (Highlighted by blog author)

ONLINE PERMIT APPLICATIONS
- Effective 1 July 2011 and export permit applications under the STA will go online.
- Every permit application should be accompanied with end-user statements from all end-users that the product is being exported to.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011. (Highlighted by blog author)

(Sourece: http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99 )

Japan-India EPA entry into force on Aug 01, 2011

2011-06-30T18:34:00.000+09:00

According to press release of METI and MOFA, EPA between Japan and India will enter into force on August 1, 2011.

See http://www.meti.go.jp/english/press/2011/0630_01.html

India wary of NSG move to restrict ENR exports

2011-06-23T15:27:00.001+09:00

One of my good export control friends in India sent interesting news topic. Here it is. Thanks!

(source : Times of India local news paper)
As the Nuclear Suppliers Group (NSG) meets for a plenary session in The Hague next week, India said it was opposed to any move to restrict enrichment and reprocessing technology (ENR) by the 45-nation body. This would have the effect of negating the nuclear exemption given to India in September 2008, government sources said.

"We have expressed deep reservations with the move to withhold transfer of ENR technology (to India) which would dilute the whole message of exemption given to us in September 2008," they said. This came even after foreign secretary Nirupama Rao reportedly had a positive meeting with the NSG troika recently, as well as the US' Ellen Tauscher, in charge of non-proliferation and arms control.

However, India is continuing to work on countries to build its case for membership to the NSG. "Our outreach programme is going on. We don't believe the next NSG meeting will decide on India's membership but would like timelines so that a positive decision is there for the four processes," a source said. India wants a "package deal" for membership to all four international non-proliferation bodies -- Wassenaar Arrangement, Australia Group, NSG and MTCR.

New License Exception STA is now announced

2011-06-18T06:25:00.000+09:00

Long awaited new license exception Strategic Trade Authorization ("STA") was announced on June 16, 2011 from BIS, and implemented immediately.

http://www.bis.doc.gov/news/2011/bis_press06162011.htm

This rule is part of the Administration's Export Control Reform Initiative, undertaken as a result of the fundamental review of the U.S. export control system that the President announced in August 2009.

Japan sign EPA with Peru

2011-06-01T08:47:00.001+09:00

After 7 negotiating rounds, starting in May 2009, Japan and Peru governments reached mutual agreement to conclude the Economic Partnership Agreement (“EPA”) in November 2010. On May 31, 2011, the Japanese government signed the EPA with Peru to enhance trade ties with the South America economy. The Japan-Peru EPA is expected to be implemented sometime in 2011. For Japan, the EPA with Peru is the 13th EPA that Japan has concluded, and the third with the Latin America economies following Mexico and Chile. In fiscal 2010, Japan exported US$ 1 billion worth of goods to Peru, while importing US$ 2.4 billion worth of items from Peru.

Tariffs on about 99% of total trade will be abolished between the two countries within 10 years after implementation of the EPA. Peru’s import duty on certain industrial items, currently 9% for most of items such as cars, automotive parts, steel products, machinery, and electrical items will be reduced either progressively or immediately to 0% in the 10th year. On the other hand, Japan’s import duties on almost all industrial items will immediately be duty free upon implementation of the EPA. Import duties on some agricultural products will be reduced with tariff quota system or progressively reduced in 10 years, such as pork, chicken, asparagus, and corn. Some of Japan’s sensitive agricultural products are excluded in the duty reduction schedule, such as rice, wheat, and beef.

Compared with most of other EPAs Japan have concluded, the EPA with Peru has practical facilitation measure for traders with regard to origin certification. A Certificate of Origin can be issued by approved exporter’s self-declaration. (Article 58 in Chapter 3 Rules of Origin of the main text of the Agreement) The ordinary certificate of origin issued by designated authority is also available as used to be as other EPAs. Among the EPAs Japan have concluded, this self-declaration method by approved exporter has been adopted first in Japan – Swiss EPA since September 2009. Peru is the second country Japan will introduce self-certification by approved exporter. In addition, among existing EPA, Japan-Mexico EPA will also adopt self-declaration method by amending the Agreement. This self-declaration system helps exporters to minimize administrative cost and lead time in export transaction.

Peru has recently enacted FTAs with the United States, China, Singapore and Canada, and in March 2011, signed an FTA with South Korea, which will reduce tariffs for TVs and certain automobiles once it is implemented. Considering the competition with Korean rivals in electronics and cars industries, the EPA with Peru gives competitive edge to Japanese industries. As for Peru side, they can expect investments from Japan in manufacturing and technological products. Peru have FTAs with the rest of South America and is located in middle of pacific coast of South America. As being in the process of building more ports, airports and highways, Peru may become a hub for Japanese, Korean or Chinese business in South America in future.

MOFA announcement: http://www.mofa.go.jp/announce/announce/2011/5/0530_01.html
Overview of EPA: http://www.meti.go.jp/press/2011/05/20110531002/20110531002-2.pdf

BIS amend CCL to reflect Wassenaar 2010 dual-use list

2011-05-25T20:42:00.000+09:00

On May 20th, BIS published amendments to the CCL corresponding to the changes multilaterally agreed by the Wassenaar Arrangement December 2010.
We can already see the amended CCL in web site.

As posted in blog, Japan also updated the control items list to accomodate Wassenaar 2010 list and will implement it on July 02, 2011. This quick change of the list both US and Japan will positively affect both US and Japan exporters. Operational concern for traders are the disparities with other EU list following countries such as Singapore, Malaysia, and Taiwan.

AEO mutual recognition between Japan - Korea

2011-05-19T13:07:00.002+09:00

According to Nikkei Newspaper on May 19, 2011, government of Japan and Korea is likely to announce mutual recognition of AEO shortly. At this point of time, I find no official announcement on Japan Customs web site, but perhaps will be available soon.

As for AEO operators, 370 companies are registered in Japan such as Toyota or Nippon Express, while Korea has 141 companies. Ministry of Finance expect the trade between Japan and Korea increase in area of steel industry or semiconductor industry.
Japan have had AEO mutual recognition with New Zealand, US. Signed with EU and Canada. On progress with Singapore, China and Malaysia.

(Additional Update)
This news was officially annoucned on May 20 by MOF press release.
http://www.mof.go.jp/customs_tariff/trade/facilitation/ka230520.htm

Japan reflect WA Dec 2010 list update on July 1st, 2011

2011-05-14T15:20:00.001+09:00

As of March 05, 2011, Japanese METI published new export control list update in its public comment web site. The list update is to reflect the list change of international regimes, such as Wassenaar Arrangement ("WA") December 2010 list update.

On May 13, 2011, METI announced the list update will be officially issued on May 18, and be forced in place on July 1, 2011. I will analyze the list change after May 18.

(Reference: http://www.meti.go.jp/press/2011/05/20110513001/20110513001.html )

Japan-EU AEO mutual recongnition implement on May 24, 2011

2011-05-10T15:55:00.000+09:00

On June 24, 2010, Ministry of Finance ("MOF") in Japan announced that Japan and EU signed the Decision establishing mutual recognition of AEO between the EU and Japan. This mutual recognition offers enhanced trade facilitation opportunities provided by customs to certified AEO traders in both sides who have invested in securing their supply chains.

Now, Japanese MOF and Customs jointly announced that Japan-EU AEO mutual recognition will be implemented on May 24, 2011.
AEO trader in Japan will be treated as good compliance trader in EU by informing JPN-EU mutual recognition code to their trade counter part in EU. The benefits would be their goods will go through a so called "green lane" in customs clearance.
Likewise, in order to have mutual recognition benefits in Japan in trade with EU porters, Japanese trader request their JPN-EU mutual recognition code to EU partners, and input the code into NACCS system in customs declaration, will be treated accordingly. The code is 12 digits number like A1B34567NL00.

(Reference: http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-05.pdf )

Navigating Japan's Export Control Regime

2011-05-05T12:24:00.002+09:00

I wrote an export control article, with contribution of my colleagues, for professional export control magazine, WorldECR issue 2, April 2011.
My part is page 17 to 21, total 5 pages of article, outlining key elements of Japan's export control summary, such as Legal structure, Reasons for control, Framework of control, License management, ICP, Recent update, and FAQ for traders.
The article can be found here: http://www.bryancavetrade.com/sitebranches/publications/docs/Japan%20-%20Bryan%20Cave.pdf

(reference: www.worldecr.com )

What's the most popluar FTA for Japanese exporter?

2011-05-02T13:27:00.002+09:00

Japan currently implement total 11 FTAs, with Singapore, Malaysia, Mexico, Chile, Thai, Indonesia, Brunei, Asean, Philippines, Switzerland, and Vietnam. What FTA is the most popular for Japanese exporter?

METI announced one interesting statistics to answer this question. It is the number of Certificate of Origin ("CO") in Japan. Please be noted this number shows the FTA utilization in export from Japan, so import into Japan is different.

In March 2011, total 10,305 COs for FTA were issued in Japan. Among them, the top is for Thailand (4,785 issued), and the second is for Indonesia (2,504 issued). The combination of Thailand and Indonesia consists of 71% of FTA COs. Then, following countries are:

3rd: Malaysia (788)
4th: Chile (523)
5th: Mexico (462)
6th: Asean (429)

Although this is the result of the latest one month record, but representing comprehensive picture what FTAs are popularly used for Japanese exporters.

(Reference: http://www.meti.go.jp/policy/trade_policy/epa/file/co_issuance.pdf )

Additional obligation in General Bulk License and new benefit as return exemption in export of dual-use items

2011-04-30T09:26:00.001+09:00

As of April 01, 2011, additional new obligations and one exemption benefit in General Bulk License (“GBL”) came into effect in Japan based on the amendment of Notification of Bulk License （包括許可取扱要領）which was issued by Ministry of Economy, Trade and Industry (“METI”) on December 6, 2010. This amendment imposes additional end-user screening requirements when GBL holder export eligible items to non-white countries in using this bulk license. The new benefit is that the GBL now covers, as one of its options, an foreign origin dual-use item can be returned for repair or replacement to originating country without individual export license. For convenience of exporter, the GBL holder does not necessarily conduct accurate classification of the item if he/she is not able to do so, as long as it is identified as non-military items.

The additional obligations are following two points, and only applicable to the export transaction to non-white country only. In other words, if the export transaction under GBL is to white country, there is no new obligations at all.

1. To make sure the possible end-user and final destination is compliant in “stock sales”.

If an export transaction is for “stock sales” which is defined as “no end-user is specified at the time of export” or “movement of goods for inventory accumulation”, the GBL holder needs to make sure the possible end-user name, and to confirm an item will not be re-exported to third country where the GBL does not cover as eligible destination. For example, the exporter under GBL needs to keep in record like, “This item is for that industry, possible end-user would be ABC company in XYZ country”. This is the a kind of diversion risk management so that the item is not re-exported to Iran, North Korea, or Iraq etc., which are non-eligible countries of GBL under stock sales operation. In addition, METI impose to GBL holder that this stock sales screening “should be conducted by designated internal procedure”, therefore GBL holder may need to amend Internal Compliance Program (“ICP”) and relevant operational procedures accordingly. There is no requirement to report this stock sales screening each time of the transaction to government authority, but should be kept in record for anticipated audit by METI

2. If the end-user is military entity or relevant to army, police, or intelligence organization, the report to METI is required in advance to the export transaction.

There has been restriction in GBL if an eligible item is likely to be used for Weapon of Massive Destruction (“WMD”) or conventional weapon purpose, the GBL lose its validity or report to METI is required depending on the destination country and the sensitivity of the situation. In addition to the current restriction, if an end-user is military entity, the report to METI is required before the export transaction as additional requirement.

The amendment of GBL obligation is “carrot and stick” to exporter. As benefit to GBL holder, return shipment in free of charge basis is added as new eligible transaction. Although there has been return export exemption in Japan based on Export Trade Control Order Article 4, but the exemption was limited to an item which was originally exported from Japan, thus could not cover the return of foreign origin item. Now for GBL holder with relevant documents stating the reason of return, the import declaration copy, and Bill of Lading in importing, it is possible to export dual-use items without individual license and without classification of items, as long as it is not arms or weapons.

The additional exemption benefit may not be relevant to all exporters, but new requirements are possibly applicable to all GBL holders, because amendment of ICP and operational procedure may be required according to each exporter’s status, regardless of the frequency of the transaction under GBL. In case an exporter amend ICP, it should be submitted to METI within one month. Also, ICP holder must submit annual compliance “check list” to METI in July every year as obligation. The reporting form of this check list is also updated to reflect this GBL obligation amendment, ICP holder is encouraged to review whether these new obligations are relevant to the export operation.

(Reference: http://www.meti.go.jp/policy/anpo/law09.html#015 )

Japan have different legal framwork in mass market exemption

2011-04-26T16:19:00.003+09:00

In Wassenaar Arrangement ("WA") dual-use item, Category 5 Part 2 (Information Security) have exemption Note 3, it is so-called mass market exemption. For example, if the encryption goods falling under 5A002 technical parameter, by satisfying below conditions, the goods is treated as "Not Controlled" under 5A002.

Note 3 Cryptography Note

a. Generally available to the public by being sold, without restriction, from stock at retail selling points by means of any of the following
1. Over-the-counter transactions;
2. Mail order transactions;
3. Electronic transactions; or
4. Telephone call transactions;
b. The cryptographic functionality cannot easily be changed by the user;
c. Designed for installation by the user without further substantial support by the supplier; and
e. When necessary, details of the items are accessible and will be provided, upon request, to the appropriate authority in the exporter's country in order to ascertain compliance with conditions described in paragraphs a. to c. above. (*)

(*) Please be noted (e) is reflected into local regulation in Japan since April 2010, but not all countries are implementing yet.

Japan implement this mass market exemption substantially in local regulation, but the difference of legal framework tend to create some disparities in communication with foreign supplier/customer.

Here is the logic of exemption in Japan.

In Japan's control list, WA Category 5 Part 2 Note 3 is NOT incorporated into the control list, but incorporated into Export Trade Control Order ("ETCO") Article 4 and its subsequent Notification. The Japan's control list only provide technical parameter equivalent of 5A002 without Note 3. Therefore, the No License Required ("NLR") logic of 5A002 equivalent item is like "Controlled, but exempted by Order and its subsequent Notification".

As US EAR or EU list incorporate Note 3 into the list, it is merely indicated as "Not Controlled under 5A002".

Eventually it is NLR, but wrong understanding may arise in communication with foreign partners.

If your Japanese partner advises to you, "This encryption item is controlled but exempted.", it means "Not controlled as 5A002 by Note 3". Please communicate carefully about "Controlled" or "Not Controlled" in 5A002.

To make things complicated, Note 4 (Ancillary encryption exemption) is reflected different manner from Note 3. Note 4 is not in ETCO with relevant Notification, but other Notification called "Unyo Tsutatsu".

For the countries who adopt EU list would not have such communication difficulty. This kind of problem arise in Japan because Japanese regulation have different numbering system from WA type list.

Extra-territorial provision of Japan's export control?

2011-04-25T15:00:00.000+09:00

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?

Self-Certification of Origin by ASEAN

2011-04-15T15:09:00.000+09:00

Many of traders may be already aware of this topic, as this is not latest hot news.
Singapore, Malaysia, and Brunei conduct pilot program of ASEAN Self-Certification Scheme since 1st November 2010 for a one year period. It is expected to roll out in all ASEAN member states by 2012.

Trade professionals who have business with EU countries are perhaps familiar with self-certification of origin, as most of EU's FTA have this self-certification system. In Japan's FTA, only Japan-Switzerland FTA adopt this scheme since 2009.

This pilot program is applicable only to intra-ASEAN trade, it means that trader make use of self-certification instead of apply for Form D. Exporter can simply self-declare the country of origin for their goods on the commercial invoice, or if the invoice is not available at the time of export, on a billing statement or delivery order. Currently, 22 certified traders in Singapore participate in this project.

Although the registration to Singapore Customs are required in advance, the exporter can enjoy benefits of self-declaration, e.g. eliminating the Form D application cost which is about S$15, simplifying the administrative operation, and flexible in operational timeline.

(Reference: Singapore Customs News Letter http://www.customs.gov.sg/insync/Issue11/article_5.html )

Whether sanction is applied to "Southern" Sudan?

2011-04-14T11:11:00.001+09:00

As most of trade practitioners are aware, Sudan is defined as terrorist supporting country and sanction is applied to Sudan under US export control. But in their southern part, a new state is expected to be formed on July 9, 2011 as "Southern Sudan", how US sanction is applied to Southern Sudan?

On April 12, 2011, Office of Foreign Assets Control ("OFAC") in Department of the Treasury announced as a guidance that the sanction to (current) Sudan will continue to be applied, but Southern Sudan will NOT be subject to the sanction. The new state of Southern Sudan will no longer be directly subject to OFAC sanctions.

However, tricky thing is that the guidance indicates that "the sanction will continue to prohibit U.S. persons from dealing in property and interests in property of the Government of Sudan, from performing services that benefit Sudan or the Government of Sudan, from engaging in transactions relating to the petroleum or petrochemical industry in Sudan, and from participating in exports to or imports from the new state that transit through Sudan."
As the map shows, Southern Sudan does not face ocean, surrounded by land boarders, so they have no sea ports for export/import. For international trade with other countries, Southern Sudan may need to rely (current) Sudan in some cases.
Traders should be cautious with this point in interpretation of this OFAC guideline.

(Reference: OFAC guidance http://www.treasury.gov/resource-center/sanctions/Programs/Documents/sudan_secede_guide.pdf )

It was "out of assumption" in license exemption

2011-04-12T17:57:00.002+09:00

The earthquake and tsunami disaster in Japan is called “out of assumption” for its immeasurable power and devastating damage. Japanese government’s slow and insufficient response to the post-earthquake activities are sometimes criticized and they apologize because the earthquake power was “out of assumption”. Here is one short story & fact relating to export control in Japan to illustrate their comment is true.

Japan’s Export Trade Control Order (“ETCO”) have exemption of license requirement in one of the provision in Article 4 for exporting free of charge goods.

“Goods imported without charge for the purpose of export without charge, which are specified by the METI in public notice.” This case is subject to license exemption.

As noted in Article 4, the applicable case is specified in METI notification, such as re-export of repaired or replacement of goods, re-export after the exhibition in Japan, or re-export by ATA Carnet etc.

On March 16, 2011, one additional case was announced in METI notification and implemented immediately upon the announcement. The summary of this additional case is that:

“Re-export of the goods used for nuclear disaster relief by foreign government or international organization after the rescue completed.”

OK, this is great. Nobody have objection under such disaster emergency and appreciate immediate action by METI.

However, it is irony. Actually similar case has been exempted under ETCO Article 4 since long time ago in opposite case for nuclear disaster relief in:

“Goods to be exported without charge for the purpose of import without charge, which are specified by the METI in public notice.”

In notification, this exemption case is stated, in summary like, “Export of goods which are requested by foreign government who suffered nuclear disaster, and being returned & imported into Japan after the rescue complete.”

This means, Japanese government have expected Japan help foreign country in nuclear disaster, but did NOT expect Japan is rescued by foreign government, therefore the such case was not included in the exemption notification.

Now Japan definitely needs the assistance of US and France in Fukushima Dai-Ichi nuclear plant accident, so METI quickly issued new notification after 5 days earthquake happened. This apparently shows the nuclear disaster in Japan and rescue by foreign government was “out of assumption” for METI.

(Reference: 輸出貿易管理令第四条第一項第二号のホ及びヘの規定に基づく経済産業大臣が告示で定める無償で輸出すべきものとして無償で輸入した貨物及び無償で輸入すべきものとして無償で輸出する貨物の一部を改正する件（平成２３年経済産業省告示第四十二号）
http://www.meti.go.jp/policy/anpo/law09.html#016

BIS support Japan emergency and humanitation relief efforts

2011-04-11T11:09:00.000+09:00

On April 6, 2011, BIS posted below announcement on the top page for Japan's humanitarian relief support activity. Appreciating flexible license practice for emergency support to Japan!

"The BIS supports all efforts for Japan involving items subject to the EAR. However, most shipments of dual-use items extended to Japan do not require a Commerce license. If you plan to export items in support of current relief efforts in Japan and you think that a license may be required, you should contact BIS for guidance. If a license is required, expedited processing may be requested."

Japan extend ban on all trades North Korea

2011-04-06T14:31:00.005+09:00

On April 5, 2011, Ministry of Economy, Trade and Industry ("METI") announced on its press release that Japan continue the ban on all export and import with North Korea, which have been imposed since 2006 with one year term extension each year. This measure is substantially trade embargo, including prohibition of export, import, brokering, and financial transaction for all items, based on Foreign Exchange and Foreign Trade Law ("FEFTL").

Outline of the measure
1. Prohibition of export of all items to North Korea by imposing an approval by METI. (Implying the denial of all approval) - FEFTL Article 48 (3)
2. Prohibition of import of all items from North Korea or originating items of North Korea by imposing an approval by METI (implying the denial of all approval) - FEFTL Article 52.
3. Prohibition of brokering between third country and North Korea (including buy/sell, lease and donation of all items) - FEFTL Article 25 (6).
4. Prohibition of payment for importing goods from North Korea or North Korea origin item (without approval by METI) - FEFTL Article 16 (5).

However, an exemption of above restriction may apply to humanitarian purpose aid. This notice is valid from April 14, 2011 until April 13, 2012 for one year.

Tips for legal professional:
It is important to know the difference between "permission" and "approval" of export license under FEFTL. Here is quick comparison below.

- Permission （許可） is under FEFTL Article 48 (1) which is used for trade control of national security, international peace, or trade of dual-use controlled items, such as NSG, AG, MTCR, and Wassenaar Arrangement.
- Approval （承認） is under FEFTL Article 48 (3) which is used for equilibrium of international balance of trade or for achievement of sound development of foreign trade, such as for CITES Washington Convention or Hazardous wastes under Basel Convention.

The difference of this license type leads to the different window of license application to METI, different procedure, different penalty and sanction in case of violation. As for penalty under FEFTL, the violation "without permission" is much severer than "without approval". For example, the sanction of export prohibition to offender is not more than 3 years for "without permission" of FEETL Article 48 (1), but for offender of "without approval" of Article 48 (3), it is not more than 1 year.
In other words, if a guy sends WA dual-use items illegally to North Korea, it is "without permission".
If a guy sends Gucci handbag to North Korea illegally, it is "without approval" and the penalty is less severe than dual-use items export.

Violation case study - import prohibition sanction

2011-04-04T16:37:00.008+09:00

On April 01, 2011, Ministry of Economy, Trade and Industry ("METI") announced the trade sanction to a Japanese national individual who violated the import control of Foreign Exchange and Foreign Trade Law ("FEFTL"). The sanction is the prohibition of any kind of import (including the import transaction through third party) for 1 month from April 08, 2011 to May 07, 2011 based on Article 53 (2) of FEFTL.

The law prescribe the sanction is for a period of not more than one year, therefore the 1 month sanction is not so severe one. The violation of this individual was to import bird's feather from United States which is restricted under CITES without import approval. (Violation of Article 52 of FEFTL). The bird's feather is in CITES Appendix I, that are threatened with extinction and the trade in wild-caught specimens of these species is illegal (permitted only in exceptional licenced circumstances).

So, why this guy imported the feather into Japan? What purpose? If you search this guy's name in google, you can easily find his profile and web site. He sold the bird's feather as fishing imitation bait through online sales! I'm not so familiar with fishing technique, but the CITES Appendix I bird's feather is worth while violating FEFTL?

(Source: http://www.meti.go.jp/press/2011/04/20110401012/20110401012.html )

Additional sanction Libyan entities

2011-03-24T15:51:00.002+09:00

Following the sanction announcement to Libya by Japanese government earlier this month, Japan announced additional Libyan sanctioned entities on March 23 on its News Release issued by METI. This sanction follows the decision of UNSCR 1970 to freeze the asset of relating entities close to Qadhafi, they are 5 organizations and 7 individuals.
The payments and asset transactions to these sanctioned entities are subject to approval by Japanese government. The asset transactions include a contract of deposit, a contract of trust, and money lease contract etc.

The names of additional 5 sanctioned organizations are as follows:
1. Central Bank of Libya
2. Libyan Investment Authority
3. Libyan Foreign Bank
4. Libyan Africa Investment Portfolio
5. Libyan National Oil Corporation

(Source: METI News Release on March 23, 2011 http://www.meti.go.jp/press/20110323010/20110323010.html )

Safety of Tokyo in Radiation Measurements

2011-03-21T13:26:00.004+09:00

Many of foreign companies get out of Tokyo, some expatriates left Japan, or some moved to Osaka to fear of radiation of Fukushima nuclear plant accident.
As Japanese government and TEPCO's PR presentation was very poor and not comprehensive, it is natural response that many foreigner left Japan for the time being.
I also had impression from their announcement that it is difficult to get reliable, truthful, concrete information about the situation, true risks, short term and longer term assessments, etc.

Although I'm not scientist, not familiar with nuclear technology, what I learned so far is that radiation level in Tokyo is pretty much safe level, we don't have to be panic, not necessary to rush out of Tokyo to evade from radiation.

First, what we need to understand is the radiation measure unit, what Sievert ("Sv") means, and the difference of micro SV, mille Sv, and Sv.

Micro Sv x 1,000 = Mille Sv.
Mille Sv x 1,000 = Sv

So, from what level is harmful to human? It is said as above 200 mille Sv. This means 200K micro Sv.

So far, radiation in east Japan is reported as micro Sv level, e.g. Tokyo Shinjuku area's radiation level as of March 20 is 0.0452 micro Sv per hour. If a guy stands out of building most of a day (10 hours), it means this guy receive 0.452 micro Sv. (But as you imagine, this is unlikely behavior.) As long as TV or news report "micro Sv" level, there is no concern at all in human health. Just for comparison, CT scan health check is 6,900 micro Sv.

Tokyo is 200-300km far from Fukushima Daiichi plant. As IAEA reported recently on their web site, "Tokyo and other areas outside the 30-kilometre zone remain below levels which would require any protective action. In other words, they are not dangerous to human health." IAEA verified Japanese government announcement was not lie.

Also, compared with Hiroshima atomic bomb in 1945, my grandparents and parents lived in a city just 100km away from Hiroshima. Atomic bomb radiation level was estimated as about 30 Sv (please be noted this means 30 millions micro Sv!) in 500meter from the ground zero point. This radiation level leads to immediate death or die within 1 month. But even in this extremely high radiation level, the people living 100km away from Hiroshima, they didn't have any health concern and my parents still live healthy, never suffered from cancer in 70 years time. I know it is not scientific analysis to refer the atomic bomb more than 60 years ago, but this idea personally relieve myself.

Libyan Sanctions by Japan

2011-03-09T14:43:00.004+09:00

Following the recent Libyan sanctions by US and EU, Japanese government also announced similar sanctions to Libya by Japan. Followings are the summary of the sanction. It is effective immediately on March 08, 2011.

Financial sanction: Frozen assets of Qadhafi and his family and relatives
Based on the Notification issued by Ministry of Foreign Affairs in Japan ("MOFA"), the payment to Qadhafi and his relevant persons is required permission. Asset transactions (including deposit contract, trust contract, and loan contract) are also required permission. The Qadhafi and his relevant persons are listed in http://www.mofa.go.jp/mofaj/press/release/23/3/PDF/0308_01_01.pdf
Prohibition of import of arms from Libya
By issuing the Notification based on Foreign Exchange and Foreign Trade Law ("FEFTL"), the import of arms originating in Libya and being shipped from Libya are prohibited.

(Source: METI web site http://www.meti.go.jp/press/20110308001/20110308001.pdf )

Draft list of export control of Japan in public comment

2011-03-07T13:18:00.005+09:00

As of March 05, 2011, Japanese METI published new export control list update in its public comment web site. The revised list is in Ministerial Ordinance and the comment is by April 03, 2011.

http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595111011

The list update is to reflect the list change of international regimes, such as Wassenaar Arrangement ("WA") December 2010 list update. For example, in electronics items (3A001) and encryption items (5A002), below are the examples of list change summary which is in line with the WA December 2010 list update.

Category 3 IC chip: Relax of technical parameter in Integrated Circuit Analogue-to-digital and digital-to-analogue converter integrated circuits, Category 3A001.a.5.a. (Please be noted the ordinance is written in Japanese and below ECCN should be converted to Japanese numbering system in its ordinance article 6.)
3.A.1.a.5.a.2. - output rate parameter increased (from current 200 million) to greater than 300 million words per second
3.A.1.a.5.a.3. - output rate parameter increased (from 105 million) to greater than 200 million words per second
3.A.1.a.5.a.4. - output rate parameter increased (from current 10 million) to greater than 125 million words per second
3.A.1.a.5.a.5. - output rate parameter increased (from current 2.5 million) to greater than 20 million words per second

Category 5 part 2 “Information Security”:
Add new exemption provision to 5A002 encryption item (Please be noted the ordinance is written in Japanese and the exemption "J" is written as "ヨ" in its Japanese document.)
j. Equipment, having no functionality specified by 5.A.2.a.2., 5.A.2.a.4., 5.A.2.a.7., or 5.A.2.a.8., where all cryptographic capability specified by 5.A.2.a. meets any of the following:
1. It cannot be used; or
2. It can only be made useable by means of ″cryptographic activation″.

Add new restricted item’s provision as 5A002.b (Please be noted the ordinance is written in Japanese and the 5A002.b is written as Ordinance Article 8, paragraph 1, item 9-2.)
5A002.b: Systems, equipment, application specific "electronic assemblies", modules and integrated circuits, designed or modified to enable an item to achieve or exceed the controlled performance levels for functionality specified by 5A002.a that would not otherwise be enabled.

Above are just examples of changes in IT industries. There are many other changes in most of WA categories, through Category 1 to 9. Traders are encouraged to review the items where applicable. In addition, as Japanese export control list quickly reflect the WA list update, this causes some disparities with other WA list adopted countries and its list update is behind the Japan’s pace. For example, Singapore and Malaysia adopt the EU list and its update follow the EU list, which only reflect WA 2008 version currently. For global traders, even if the item has same technical parameter, the classification result may vary depending on the timing of export control list update in each country.

As the due date of public comment is on April 03, 2011, the new list implementation in Japan is likely to be sometime after couple of months later on after April 2011.

Japan sign EPA with India

2011-02-15T19:03:00.005+09:00

According to press release of Ministry of Foreign Affairs, Japanese government decided to sign EPA with India. To sign this agreement is expected on Feb 16 in the meeting of Mr. Seiji Maehara, Minister for Foreign Affairs, and Mr. Anand Sharma, Minister of Commerce and Industry of the Republic of India.

The talk of EPA Japan - India was started in January 2007 and the negotiation was agreed in October 2010. The implementation is expected in sometime in 2011.

One noteworthy point in this JPN-India ETA would be rule of origin. This EPA have both general rule and PSR (Product Specific Rule) in origin rule. In general rule, the qualification of origin is described as, "CTSH (6 digits level change of HS code) AND Value add 35%".
This "AND" is big one, because this means "cover both". I remember Japan - Asean EPA general rule is "either" HS code change or value add.
Japan - India EPA require much more challenging in rule of origin qualification. Actually, Asean - India FTA have same general rule, which is likely to be the request by India side.

(Source: MOFA web site: http://www.mofa.go.jp/region/asia-paci/india/epa201102/index.html
METI web site: http://www.meti.go.jp/policy/trade_policy/epa/html2/2-torikumi3-india.html )

Ancillary Cryptography exemption in Japan

2011-02-10T14:33:00.002+09:00

As most of export control guys are aware, ancillary cryptography exemption rule was incorporated into Wassenaar Arrangement dual-use items list Note 4 in Category 5 part 2, in December 2009.
In Japan, the ancillary cryptography has been implemented since April 01, 2010, and in U.S., it has been implemented June 25, 2010.
(Please be noted some countries don't implement yet, such as EU, Singapore and Malaysia (from July 2011).)
How's actual practice in ancillary cryptography in classification work in Japanese companies?
Belows are something I have heard so far.

Ancillary cryptography Note 4 is translated in Tsutatsu （通達）level (Notification level). The legal words are almost same as original English words. As the legal words are short and concise, that makes various interpretations in actual implementation, then some companies are very cautious about applying and removing their items from controlled items of Category 5 part 2.
For example, how Multi Functions Printers ("MFP") should be considered?
Generally, it is considered an ordinal uni-function printer can be exempted from controlled items by applying ancillary cryptography. But MFP have multiple functions such as printing, scanning, faxing, and copying etc. In this case, the suggested practice in Japan is to "review all functions one by one" in ancillary point of view. This means, if all functions (print, scan, fax, and copy) are exempted from ancillary point of view, the MFP can be exempted. However, if any one of functions cannot be exempted in terms of ancillary, the whole MFP should not be applied ancillary exemption.

Other cases I have heard:
IC chip (5A002) embedded with encryption? - Not exempted as ancillary
Internet browser such as IE? - Not exempted as ancillary
Server, PC, VPN, router, network switch, wireless LAN, storage, HDD, - all of them are off course, No, No, and No.

It is generally considered Japanese companies are reluctant to adopt new idea and avoid the risk to be "first" runner. But once some major companies aggressively adopt the new ideas, the rest will follow soon. I'm not so sure this principle apply to implementation of ancillary exemption implementation in classification work, but hope to see more actual cases and discussion in industries and METI.

Singapore new trade facilitation framework "Trade FIRST"

2011-01-28T16:38:00.003+09:00

One of my good friends in Singapore shared very interesting information to me, which is Singapore's new trade facilitation framework, called "Trade FIRST".

http://www.customs.gov.sg/leftNav/trad/TradeFirst/TradeFIRST.htm

I don't fully read the details yet, but looks quite fascinating program, including and mixed the concept of AEO, export bulk license (STS), and tax privilege.

One impressive point is that Singapore Customs assign Account Manager to the companies who participate in this program. The Account Manager is Singapore Customs officer and acts as contacting point or adviser, and help to answer various kinds of inquires regardless of its jurisdictions.

Also, the companies' privilege is divided into 5 categories, from Basic (for all traders) to the highest status is Premium. (Basic, Standard, Intermediate, Enhanced, then Premium)
The higher the status, the more the benefits.
Currently, 29 companies in Singapore are in Premium status, they looks like combination of mostly subsidiaries of US or European firm, and local companies.

I'm impressed Singapore Customs' smart and pro-business approach. They fully understand the importance of regional hub role, being competitive in trade facilitation, and drawing business by setting up attractive scheme.

(P.S.: As for export control perspective, I find the STS Handbook was update as of January 25, 2011. The Trade FIRST element was added into this handbook. For example as below.

What are the basic qualifying criteria to be eligible for a permit under the STS?
2.5.1 You have to meet the following basic criteria in order to qualify for a permit under the STS:
(a) You are a registered trader with Singapore Customs; and
(b) In the case of applications for Tier 2 and Tier 3 Permits, you must:
(i) maintain a good trade compliance record with Singapore Customs;
(ii) implement an effective Internal (Export Control) Compliance Programme; and
(iii) Achieve at least the “Enhanced” band under TradeFIRST. (added)

US relax export control to India

2011-01-26T12:35:00.003+09:00

On January 25, 2011, US government announced relax of export control to India on Federal Register. The key points in these changes are:

Remove Indian entities from Entity List
Remove India from country group D

I took a look Entity List today, and find it has been updated as of January 25, 2011. As for Indian entities, only remaining entities are the following Department of Atomic Energy entities:

Bhabha Atomic Research Center (BARC)
Indira Gandhi Atomic Research Center (IGCAR)
Indian Rare Earths

This means all other entities such as subsidiaries of India’s Defense Research and Development Organization (“DRDO”) and subsidiaries of the Indian Space Research Organization (“ISRO”) are no longer restricted in Entity List.

Other main change is removing from country group D. I took a look Part 740Spir - Supplement No. 1 to Part 740, Country Groups, and find India is in Group A:2 and Group B. This will change the applicable license exceptions.

Malaysia export control update

2011-01-12T15:47:00.003+09:00

As scheduled since last year, Malaysia's Strategic Trade Act 2010 (STA) came into effect on 1st
January 2011.

However, please be noted it is only for export permit application of Category 0 (Nuclear items) which will be exported from April 1st, 2011 onward. Exporters have a period of 3 months preparation of export permit of this category and the application for the export permits must be submitted to the Atomic Energy Licensing Board (AELB) for category 0. Details on the application procedures are available on http://www.aelb.gov.my/ .
(I don't think Malaysia companies have many nuclear related items, though. In other word, it is good grace period in starting phase for improving the procedures in government authorities and industries by evaluating how implementation going on in real operational world.)

The export permit requirement for all other strategic items under the STA i.e., Military
Items and Dual Use Items (Category 1-9), will be enforced on 1st July 2011 and
companies are required to apply for the export permits from 1st April 2011.

Good news for exporters are the controlled items list is finally available on Malaysia MITI web site.
http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99

It can be downloaded in MS-Word file. As it was announced previously, the list is in link with EU list. I find their control list is, yes, same as EU list Annex I to Regulation 428/2009. The noteworthy point is that the list have conversion column with HS code, and relevant government authority is indicated in the right side column. I think HS code conversion is useful only for "first time" traders who have no idea of equivalent ECCN of their items. Please be noted export control code and HS code have totally different criteria in classification, HS code should be only for reference purpose to narrow down the possible export code.

Japan eliminate certain GSP tariff targetting China

2011-01-08T19:19:00.004+09:00

According to NHK news on January 8, 2011, Japanese government is considering to eliminate certain GSP preferential tariff (about 460 items) from April 2011.

Ministry of Finance (“MOF”) in Japan review the rule to what items are applicable to Generalized System of Preferences (“GSP”) tariff, and consequently 462 items of Chinese origin items will be not eligible to GSP tariff. GSP is a system to impose lower import duty to encourage import from developing countries and aim to help their economic development. The new policy by MOF is basically to terminate the GSP tariff to certain items which import amount occupy more than 50% from specific one country or region in consecutive three years. With applying this new policy, many Chinese origin items such as vegetables and variety of consumer items will be in target of the new rule, because import of such items are mostly occupied by China. The import duty rate for such items will increase 2.4% ~ 5.2% by applying MFN rate instead of GSP, and the increased trade cost will affect importers, or will be reflected into retail price in Japan.

MOF plan to amend the Temporary Tariff Measures Law and to implement the new tariff rule from April 2011. As Chinese commodities are gaining competitiveness internationally, it aims to terminate preferential measure to China to help other developing countries. The examples are vegetables from China such as Burdock (HS 0706.90), Matsutake mushroom (HS 0709.59), or consumer items such as Fireworks (HS 3604), Pearls (HS 7116), Fishing rods (HS 9507), or Thermos bottle (HS 9617) etc. All of them have been 0% import duty under GSP, but MFP rate ranges from 2.5% to 5.2%. Other examples are prepared fish such as Mackerel (HS 1604.11) and Eel (HS 1604.19), the GSP duty of them are 7.2%, while MFN rate is 9.6%.

In fiscal year 2009, the 86% of import amount under GSP was occupied by Chinese origin items. The background of this decision is that Chinese products are almost competitive internationally and treated well too much under GSP. system On the other hand, after 462 items are excluded from GSP treatment, still 3090 items are eligible to GSP and most of them are actually imported from China.
The list of HS code of Chinese origin items which will be excluded from GSP on April 2011 is already available in Customs web site. Traders who have business with China and made use of GSP should investigate whether your items are included in the list for assessing the trade cost impact to business in fiscal year 2011.

(Source and list of items: 平成23年度税制改正大綱内閣府ホームページ)

Japan reflect WA Dec 2010 list update in public comment

2010-12-14T09:26:00.002+09:00

On Dec 12, METI announced in its public comment that Wassenaar Arrangement ("WA") December 2010 list update will be reflected in domestic regulation. The draft was released in the web site, and the public comment is accepted until January 10, 2011.

http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595110089&Mode=0

(note: the draft and the final regulation is Japanese only, never translated into English.)

It is surprisingly early, as WA Dec 2010 PLENARY MEETING was held in Vienna on 9 and 10 December 2010.

New exemption rule in Return of controlled items - no classificaiton required

2010-12-06T14:39:00.006+09:00

On December 6, 2010, Japanese METI announced new export control regulation relating to return shipment of controlled items. This new rule is to add new license exemption rule which is facilitating measure to exporters, and will be effective from April 01, 2011.

The new rule is to provide a license exemption to Japanese exporters who implement ICP and have general bulk license. Currently, an export license is required if an exporter return any controlled items (which means items controlled by NSG, AG, MTCR or Wassenaar Arrangement) to original foreign shipper. Under certain condition, a license exemption of return shipment exists, but it is limited to the occasion an items had been originally exported from Japan, then returned and being imported into Japan, then again export the same item for return. This means foreign origin items which was imported into Japan, and found as discrepancy, sample for evaluation to be returned, short quality or whatever reason, such item is not eligible for the return exemption, therefore need product classification, and export license is required if it is the controlled items. The common challenge in such case is the classification difficulty by the Japanese exporters because they are not manufacturer, so they don't have sufficient technical specification to classify correctly. Even if they try to contact foreign manufacturer and to collect technical specification for proper classification, they face difficulties in language barrier in terminology, different classification numbering scheme, and company policy not to disclose technical specification of items, etc, etc.

The new return exemption gives "No License Required" status to such return shipment of foreign origin items for general export license holder automatically, whatever the items are controlled or non-controlled. Such license holders are not required to classify the item in export declaration to customs authority when they make return shipment to original foreign exporter. Just to give the reason of return, the invoice when the item was imported, Import Declaration, and AWB, etc, then the exemption is applied whatever the item is! (You don't have to classify the item.) The release from classification requirement is quite comfortable facilitation who have certain return shipments of controlled items in operation.

However as mentioned in above, this exemption is given only to general license holder who implement ICP. This means the company who don't have ICP cannot make use of this return exemption, typically SMEs. The exporters who submit ICP to METI is said around 1,500 companies all over Japan. This is quite small numbers compared with whole exporters in Japan.

(Source: CISTEC News and METI export control web site - Japanese only)

US EAR relaxation to India

2010-11-25T14:55:00.002+09:00

U.S. - India Partnership On Export Controls and Non-Proliferation (Nov. 8, 2010) is worth while reading for export compliance managers. Although this is only direction and not yet in legal implementation, need to understand this policy change.

http://www.whitehouse.gov/sites/default/files/india-factsheets/India-US_Agreement_on_Export_Controls.pdf

In summary, it describes as:

1. The US will support India's full membership in the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group, and the Wassenaar Arrangement over time.

2. The US will remove some India entities from the "Entity List"

3. The US will "realign" India in the Export Administration Regulations (EAR), giving India treatment similar to close allies and partners such as the UK and Canada.

4. BIS will take India out of Country Group D in the EAR, which will significantly narrow, but not eliminate, the US catch-all control prohibiting exports and reexports to missile activities in India.

5. India and the US will expand dialogue on export control issues though the US-India Technology Cooperation Group on topics such as capacity building, best practices sharing and outreach within industry.

By calling to India, "Hey, come to our side, please", this would be effective containment policy toward PRC China, and encourage export of US to emerging market in Asia.

Japan - Peru EPA conclusion of negotiation

2010-11-15T21:44:00.004+09:00

On November 14, 2010, MOFA announced joint statement on the Conclusion of Negotiations for an EPA between Japan and Peru.

http://www.mofa.go.jp/region/latin/peru/epa1011/joint1011.html

It is expected this EPA come into force sometime in 2011.

(Ref. METI web site - Japanese: http://www.meti.go.jp/press/20101114001/20101114001.html)

Basic policy of FTA - Japanese government

2010-11-09T08:29:00.002+09:00

On November 6th, 2010, Japanese government announced its basic policy on Comprehensive Economic Partnerships on MOFA web site.
This is bearing in mind APEC meeting this week in Yokohama and recent hot topic of TPP (Trans-Pacific Partnership) Agreement.

http://www.mofa.go.jp/policy/economy/fta/policy20101106.html

Overall, it is very general and just announcing basic strategy how Japanese government tackle the future FTA negotiation, while working on domestic policy issue such as measures to be taken to agricultural industry.

The important point in this announcement is the decision of JPN gov't on TPP.
It is described as " it is necessary to act through gathering further information, and Japan, while moving expeditiously to improve domestic environment, will commence consultations with the TPP member countries."

For me, this seems to be vague and unclear message. It looks JPN did not decide to join TPP negotiation, but is interested in it. This is politically technical expression, paying highly consideration to domestic agricultural industry, while just giving impression "we go forward" to industrial sectors who strongly support the TPP.

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

2010-10-29T14:54:00.002+09:00

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

2010-10-28T17:33:00.003+09:00

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

2010-10-26T11:28:00.001+09:00

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.

Japan request for WTO consultation on certain Local Content Requirements in the Feed-in Tariff Program in Ontario, Canada

2010-09-16T10:55:00.002+09:00

WTO related news released from METI on Sept 13, 2010, requesting WTO consultation in the unfair treatment against Ontario, Canada.

See this news release from METI: http://www.meti.go.jp/english/press/data/20100913_01.html

"The Government of Ontario has established a Feed-in Tariff Program, in which electricity generated by using renewable energy (e.g. solar and wind energy) is subsidized.
The Program sets forth certain local content requirements, which accords less favorable treatments to imported equipments than those made in Ontario.
These requirements imposed by the province of Ontario are inconsistent with the Canada’s obligations under the WTO Agreement. Thus, Japan requested for consultations with the Canadian government."

BIS update CCL implementing Wassenaar 2009

2010-09-11T09:49:00.002+09:00

On September 7, 2010, BIS updated CCL which identifies items subject to DoC export control.
The change is to implement Wassenaar December 2009 Plenary Agreement which covers dual-use goods and technologies.

The change pertains to Categories 1, 2, 3, 4, 5 Part I (telecommunication), 6, 7, and 9.

Please be noted ECCN 5A002, 5D002, 6A002, 6A003, 8A002 and all related ECCNs will be implemented in a separate rule because of the sensitivity of the items and complexity of procedures.

In addition, APP (Adjusted Peak Performance) of digital computer 4A003 will be implemented in a separate rule when the President's report for High Performance Computers has been sent to Congress that sets forth the new APP in accordance with the National Defense Authorization Act for FY1998. (Looking at CCL of 4A003.b as of today, the APP is still 0.75WT, while WA 2009 set APP in 1.5WT.)

As for other countries, Japan and Hong Kong already implement Wassenaar 2009, while EU and Singapore still maintain Wassenaar 2008 dual-use list.

India - Japan agreed EPA

2010-09-10T13:55:00.002+09:00

On September 9, 2010, METI announced Japan and India reached mutual agreement to conclude EPA, which negotiation has continued since January 2007. The implementation of this EPA will be 12th EPA Japan have concluded, and first EPA with BRICs. It is expected to be implemented in sometime 2011.

Within 10 years after the implementation, customs duty for the trade amount of 94% will be abolished. (Export from Japan to India is 90%, and export from India to Japan is 97% respectively.) Steel products or vehicle parts will be duty free in importing into India, this is promising news for Japanese manufacturers, who struggles in shrinking domestics market.

While India request to Japan to simplify the approval procedures for the sale of generic drugs and to expand job opportunities for Indians hoping to work in Japan, this request is not finalized yet, just agreed to keep discussing. Also, Japan keep a number of agricultural items, such as rice, wheat, meat and sugar etc., excluding from duty reduction.

(Reference: METI announcement http://www.meti.go.jp/press/20100909006/20100909006.html )

FAQ for Malaysia Stretegic Trade Act

2010-09-07T13:47:00.006+09:00

As previously mentioned in this blog, Malaysia will implement Strategic Trade Act 2010 ("STA") on October 1st, 2010. Although it is much earlier than expected, good news for trader is that the STA provide 3 months grace period from the commencement date of STA. In this period, the STA provide a deeming temporary authorization for the applicant to continue with existing activities.

Malaysian MITI posted Key Features of the STA and FAQ on their web site. This is comprehensive and easy-to-understand guideline. Please see:
http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99
(or http://www.miti.gov.my/cms/index.jsp Home --> Guidline --> Strategic Trade Act)

Controlled Items List is not officially gazetted yet here, but by looking through the FAQ document, the category code is apparently similar to Wassenaar type ECCN (e.g. Category 4 is computer, Category 5 is telecommunication and information security). In FAQ, they mention about "ECCN" numbering scheme, cite as examples such as 1A002, 4D003, or 9E102 which looks like same scheme as US and EU.

In addition, this FAQ provide export permit types, application turn-around time, and the validity period. Malaysia have multiple types of bulk permit in audition to single-use permit.

This MITI web site is apparently new, since the total visitors shows below 100 as of today.
Perhaps, more details such as Ministerial Order will be published in this web site?

Japan amend Proliferation End-User List Again

2010-09-03T17:19:00.002+09:00

On Sept 3rd, 2010, METI announced update of Proliferation End-User List again following the update in August last month.
This time, again, is also addition of Iranian entities only, plus 39 Iranian entities make it total number of entities of the list 331.

This is off course based on the follow up action of UNSCR 1929, which is sanction to Iran.
Frequent update of this list is unusual, it has been usually once a year in practice.

Trade need to follow up to use the latest list for catch-all end-user screening.

US Export Control Reform - What's going on?

2010-09-02T15:22:00.002+09:00

From August 31 to September 2 in Washington, BIS Update conference is held and many of my colleagues and friends are there. With this timing, very important message was dispatched from President Obama regarding the direction of US Export Control.
For those who wish to know US Export Control, I strongly recommend to read below press release from White House.

"President Obama Lays the Foundation for a New Export Control System To Strengthen National Security and the Competitiveness of Key U.S. Manufacturing and Technology Sectors"
http://www.whitehouse.gov/the-press-office/2010/08/30/president-obama-lays-foundation-a-new-export-control-system-strengthen-n

Also, the speech by Assistant Secretary Mr. Kevin Wolf is very comprehensive and indicating the picture how US export control reform will be. I believe trader must read his speech for understanding the new regulation! Don't miss out his very important message.
http://www.bis.doc.gov/news/2010/wolf_update_speech.pdf

Malaysia implement STA by October 2010

2010-09-01T14:58:00.002+09:00

I happen to see Malaysia MITI announcement regarding "The Implementation of The Strategic Trade Act 2010" in a news letter format, dated July 27, 2010 and stamped on Aug 04, 2010.

According to this letter, The Strategic Trade Act 2010 is expected to be implemented latest by October 2010. It is earlier schedule than expected, while most of traders don't see the controlled list and detailed procedure etc.

I will keep gathering information on this.

(Reference: http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.article.Article_3176d4a2-c0a81573-170c170c-67aecd2b&curpage=tt )

Japan add exemption notes to 2B352.d

2010-08-26T15:52:00.002+09:00

On August 25, 2010, METI posted the public comment in update of classification list of 2B352.d.
"Cross (tangential) flow filtration equipment and components"

2B352 is controlled under Australia Group ("AG") regime. In June 2010, Japan proposed AG to make exemption of certain components of 2B352.d and it was admitted in AG.
Accordingly, Japan update the local export control list.
2B352 items are treated by Health care industry and certain exemptions note would be beneficial for them.

The implementation is expected in certain months ahead.

(Source: http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595110071 )

Singapore Customs amend stragetic goods form　(2)

2010-08-26T15:31:00.002+09:00

As reported in my blog in Aug. 20, Singapore Customs amended strategic goods classification request form for encryption items. Below is further update and clarification of this.

In view of the upcoming adaptation of the Ancillary encryption Note 4 in April 2011, Singapore Customs (SC) has updated their Encryption classification form (now known as Annex A - Product Questionnaire A-1 Cryptography).
When asked for further explanation on why they included questionnaires related to Note 4 even though it has not been implemented, SC explained that they will look at ALL the information (including those related to Note 4) provided by the traders as part of their classification process.

In my personal opinion, the usage of the new form before Note 4 is implemented is to prepare the SC classification team to be familiarized with the new section before the actual roll out in April 2011.

India amend The Foreign Trade Act of 1992

2010-08-23T14:48:00.004+09:00

My good old friend is kindly shared India's regulatory development information.
According to the web news below, The Foreign Trade Act of 1992 will be amended.

http://www.taxguru.in/fema/a-brief-on-amendment-in-foreign-trade-development-and-regulation-act-1992.html

(Quote from http://www.taxguru.in/ )
The Foreign Trade (Development and Regulation) Amendment Bill, 2010, (Sill’) has been passed by Rajya Sabha on 9 August 2010. The Bill seeks to amend the Foreign Trade (Development and Regulation) Act, 1992 (‘the Act’) which empowers the government to regulate trade in goods. The amendment now seeks to bring in ’services’ and ‘technology’ within the purview of this Act. It also aims to impose Quantitative Restrictions and to bring in provisions for more stringent control for trade of dual-use goods and technologies.
However, the effective date of the provisions would be notified separately.
(End of Quote)

From this article, I'm not quite sure what is the impact to traders, as the details are not described. It seems India will introduce the license control over the transfer of "services" and "technology", however if you look through the SCOMET list, certain kind of technology is already in the list. What is the new substantial impact of the amendment?
(Highlight of SCOMET list: http://dgftcom.nic.in/exim/2000/scomet.htm )

Singapore Customs amend stragetic goods form　(1)

2010-08-20T15:40:00.004+09:00

According to the Singapore Customs e-mail news (Singapore Customs: Updates to Strategic Goods Control Website - 19 Aug 2010), their web site is updated to show amendment of various application form. The form page is in below URL.
http://www.customs.gov.sg/stgc/topNav/ese/Forms.htm

I looked through these forms, and find one interesting point.
It is in Annex A - Product Questionnaire A-1 Cryptography, which is questionnaire form of classification of encryption product.
http://www.customs.gov.sg/NR/rdonlyres/C809158B-0CCD-4BCB-B11C-D375C2980680/26928/AnnexAProductQuestionnaireA1Cryptography3.pdf

In page 3 of this Annex A (Section C: Functionality of Product, question a. and b.), there are questions a.) and b.) to verify whether the product is "Ancillary encryption", which is exempted from Category 5 - part 2 in Wassenaar dual-use list.

But my understanding is that Strategic Goods (Control) Order 2010 (effective from 1 Apr 2010) don't yet reflect Wassenaar 2010 dual-use list which contains Ancillary encryption Note 4.
I looked through the Singapore list again, but I don't find Ancillary encryption Note 4 in Singapore list.
http://www.customs.gov.sg/stgc/leftNav/str/

Why Singapore Customs introduce Ancillary encryption question into their classification application form? Are they implementing Ancillary encryption actually? or just for anticipating the future Strategic Goods list change? If any of the blog reader know, please share your idea.

Start of SME support in export control

2010-08-19T15:21:00.006+09:00

Japanese Ministry of Economy, Trade and Industry ("METI") announced on August 6, 2010 in its Press Release that they initiated a "Voluntary Security Export Controls Program" aimed at supporting voluntary export controls by small and medium enterprises ("SME").

Please find the article in following link.

http://www.meti.go.jp/english/press/data/20100806_03.html

Ooops, however, I know this press release is too general, bureaucratic and superficial. I guess many of people who read this don't fully understand what is the substantial point?

Let me translate it in simpler manner with its background.

On April 01, 2010, export control law was amended, and all exporters in Japan are required to have classification skill (if I strictly translate the law, to assign responsible person for classification) regardless of company size and product lines.

The problem is many of SMEs don't have such export control resource.

METI secured national budget for consultation and training of export control to SMEs in FY2010. The annual budget is JPY110 millions. (approx. US$1.3 millions)

CISTEC and JMC (Japan Machinery Center) are appointed as a contractor of this program. CISTEC take a role of dispatching consultant to SME for consultation of export control for FREE. JMC take a role of holding export control seminar for SMEs for FREE.

The program is exclusively for SME, and a big company is not eligible for this program. The eligible SME is defined in its capital amount and the number of employees. For example, in SME of manufacturing industry, the eligible company is the capital amount less than JPY300 millions, or the number of employees less than 300.

From public point of view, this program is good trial for improving export compliance in Japan. Also for other Asian countries who schedule to introduce solid export control practice, it is good to follow and learn from this experiment in Japan.

From consulting point of view, with hearing and consultation from SMEs, useful database and consulting skill may be build up.

Singapore's AEO Mutual Recognition

2010-08-19T11:07:00.002+09:00

Singapore Customs periodically issue well written e-newsletter, I like it very much.
According to the latest news letter "inSYNC" 9th edition issued on August 18, 2010, Singapore have mutual recognition agreement of AEO (*) with Canada and Korea.
http://www.customs.gov.sg/insync/Issue09/index.html

(*) Singapore call it as "Secure Trade Partnership - STP", and Canada call as "Partners in Protection - PIP", while Korea call as AEO.

Actually this is not so new information, as it was announced on June 25, 2010. It is same timing I drafted the Japan- EU, and Japan - Canada AEO mutual recognition. Perhaps, I heard Singapore's mutual recognition at that time, but it completely slipped out of my mind.

This article of AEO mutual recognition is neat and concise, I love it. We can know the essence of Singapore AEO system at a glance.

Singapore Customs is currently engaged in discussion of mutual recognition with China, Japan, New Zealand and the United States.
Among them, China would be the most challenging one. China have their own AEO systems (ranking the operators in AA, A, B, C, and D) but as long as I hear from reliable source, the actual implementation is still in doubt and the practice is different by port by port.

WTO Panel reports issued on ITA dispute

2010-08-17T12:27:00.004+09:00

According to various news papers on Aug 17, 2010, WTO issued the reports of the panel that had examined complaints by the United States, Japan and Chinese Taipei against “European Communities and its Member States — Tariff Treatment of Certain Information Technology Products”.

The report presents a decision that fully approves Japan’s claim that the EU’s customs duties in question are inconsistent with Article II (tariff concessions) of the General Agreement on Tariffs and Trade (GATT).

I reported this issue in my blog on June 4, 2008, please see the details and the background below.
http://japantradecompliance.blogspot.com/2008/06/eu-ita-duty-classification-issue-bring.html

The EU may file an appeal against this report with the WTO Appellate Body within 60 days.
If no such appeal is filed, the panel report will be adopted by the WTO as its final decision.

(WTO announcement: http://www.wto.org/english/news_e/news10_e/375_376_377r_e.htm )
(METI announcement: http://www.meti.go.jp/english/press/data/20100816_01.html )

Japanese companies avoid trade with Iran

2010-08-16T15:33:00.002+09:00

According to the article of Reuters on August 11, 2010, some of Japanese big manufacturers tend to refrain from export to Iran.

Perhaps this is an action considering recent Japanese government's announcement of Iranian sanction and following current international situation.

(METI web site: Measures based on FEFTL to Address the United Nations Security Council Resolutions on Iran:

http://www.meti.go.jp/english/press/data/20100803_04.html )

Comment from each companies are as follows.

TOYOTA: Suspending all commercial vehicles export to Iran from June 2010, considering current international status. Keep monitoring the situation. Toyota exported commercial cars to Iran 4,000 vehicles in 2008, and 250 vehicles in 2009.

NIPPON STEEL CORPORATION: Keep exporting steel material to Iran (without disclosing the amount of the export), but with careful attention of security trade control by consulting with METI.

JFE HOLDINGS: Keep exporting certain amount of steel products with careful screening of end-user and end-user by internal compliance procedure.

HONDA: No sales of vehicles in Iran.

MITSUBISHI HEAVY INDUSTRIES: Exporting after-service parts of plant, but with complaiance of both Japan and U.S. export control. Especially, checking severely whether containing the US origin goods or technologies.

KOMATSU: Exporting small amount of constructing machines with following guideline of Japan.

In Japan, the export to Iran is not complete embargo, and it is still lawful to export goods and technologies as long as it is non-WMD related.

However, recent government's sanction in US, EU and Japan have some effect to business decision of global players. The financial transaction with Iranian players are getting very difficult, naturally this makes companies avoid business with Iran.

EU Import Cargo - 24 Hour Rule Programming

2010-08-12T11:00:00.002+09:00

Like U.S, EU will implement 24 hours rule in Dec 2010.

See reference material:

EC Customs Information Portal
http://ec.europa.eu/ecip/security_amendment/index_en.htm

JMC (in Japanese)
http://www.jmcti.org/C-TPAT/vol.1/2010/C-TPAT_CSI_1-125.htm

Japan extend countermeasure against Byrd Amendment

2010-08-09T13:47:00.003+09:00

On August 6, 2010, Ministry of Economy, Trade and Industry ("METI") announed on its Press Release that Japan will extend countermeasure against Byrd Amendment in U.S., which impose additional customs duty to certain steel items (Ball or roller bearings) of U.S. origin.

Japan have extended this countermeasure one year each since September 2005. Current measure is valid until August 31, 2010. This will be extended again one year until August 31, 2011 with following rate which is re-calculated as recent distribution result in U.S.

8482.10 Ball bearings
Current rate: 9.6% (until Auguslt 31, 2010)
--> 4.1% (from September 01, 2010 until August 31, 2011)

8482.20 Tapered roller bearings
Current rate: 9.6% (until August 31, 2010)
--> 4.1% (from September 01, 2010 until August 31, 2011)

Background of Halt of Distribution under the Byrd Amendment (quoted from METI web site)
Japan took countermeasures against the U.S. in September 2005. The U.S. repealed the Byrd Amendment in February 2006. However, since the distribution of duties will be continued under the transitional clause, Japan urged the U.S. to halt the distribution and extended the validity of the countermeasures. As the U.S. had still not yet suspended the distribution, Japan further extended the validity of the countermeasures by one year in September 2008, following its alternation of commodity items and duty rates. Moreover, since the distribution under the transitional clause still continued in 2008, Japan further extended the validity of countermeasures by one year in September 2009, following its alternation of duty rates.

Update:
Cabinet decision was made on August 10 and it made this countermeasure official, according to MOF Press Release http://www.mof.go.jp//jouhou/kanzei/ka220810.htm )

(Source: http://www.meti.go.jp/press/20100806008/20100806008.html )

(Details of Background of Halt of Distribution under the Byrd Amendment: page 17 - 18 of http://www.meti.go.jp/english/report/downloadfiles/2010WTO/2010priority.pdf )

Japan add Iranian entities on Proliferation End-User List

2010-08-05T14:19:00.002+09:00

On August 3rd, 2010, Ministry of Economy, Trade and Industry ("METI") announced the update of Proliferation End-User List which is concerned entities list of WMD proliferation activities.

Like recent regulation development in U.S. and EU, Japan also follow U.N. Security Council Resolution 1929 ("UNSCR 1929") which calls on states to take actions for preventing Iran's nuclear proliferation activities.
Usually, this end-user list is updated only once a year. In 2010, the new list was announced on May 26, 2010. Frequent update like this time is not so usual.
Update of Proliferation End-User List is one of Japanese government's actions to follow UNSCR 1929. The update of this time is additional of 20 Iranian entities (no other county this time!) as below. All of them are Iranian entities.

- Defense Technology and Science Research Center (DTSRC)
- Doostan International Company (DICO)
- Fater Institute(Faater)
- Gharagahe Sazandegi Ghaem
- Ghorb Karbala
- Imensazan Consultant Engineers Institute(ICEI)
- M. Babaie Industries
- Malek Ashtar University
- Makin
- Ministry of Defense Logistics Export(MODLEX)
- Modern Industries Technique Company(MITEC)
- Nuclear Research Center for Agriculture and Medicine (NFRPC)
- Omran Sahel
- Oriental Oil Kish
- Pejman Industrial Services Corporation
- Rah Sahel
- Rahab Engineering Institute
- Sahel Consultant Engineers
- Sepanir
- Sepasad Engineering Company
- Shahid Karrazi Industries

This update make the number of listed concerned entities in total 292.
When exporter ship goods or provide technology to the listed entities, the export license application is required to METI unless it is obvious that the transaction is NOT related to WMD activities. Currently, this list covers entities in Iran, North Korea, Pakistan, India, PRC China, Syria, Israel, Taiwan, and Afghanistan.

(Source: http://www.meti.go.jp/policy/anpo/hp/law_document/tutatu/t08kaisei/100803EUL/t08kaisei_kaiteikasho.pdf )

"First Sale Rule" remain in the U.S.

2010-08-02T16:28:00.002+09:00

According to the news letter issued by international trade law firm, Danielo Desiderio on July 30, 2010, the 2008 CBP proposal to abolish the first sale rule will be formally withdrawn. This means the first sale rule will remain in place in the U.S.

This mechanism is indeed beneficial for U.S. importers allowing them to obtain substantial import duty savings, industries will welcome this decision.

Thanks, Danielo, for sharing useful information.

(Source: http://www.ddcustomslaw.com/index.php?option=com_content&view=frontpage&Itemid=1&lang=en )

Japan reduce ceiling amount of GSP preferential tariff to limit China origin items

2010-07-30T10:50:00.002+09:00

According to The Nikkei news paper on July 26, 2010, the Ministry of Finance (“MOF”) is considering to reduce the ceiling amount of GSP preferential tariff of one country. The ceiling for each product group is open for utilization by all preference-receiving countries equally, however there is maximum ceiling percentage per one country as 20% of total ceiling amount per year in order to avoid inequality among GSP countries. MOF try to reduce this ceiling percentage per one country to 10 – 15%. In these years, Chinese origin items fulfill this ceiling percentage for most of items, therefore MOF aim to equalize the GSP preferential opportunity to many other developing countries.

In Japan, GSP preferential tariff is applicable to approx. 3,500 items which are originated in 154 developing countries or regions. Among GSP eligible items, approx. 1,180 items can be allowed until they exceed the ceilings of either limited amount or quantity.
For example, Chapter 76 (Aluminum and articles thereof) have GSP preferential tariff as 0%, while MFN tariff for Chapter 76 is from 2% - 7.6% depending on items. The annual ceiling amount of Aluminum item is JPY11.7 billions for fiscal year April 01, 2010 to March 31, 2011. As for GSP utilization of Aluminum item from China, it reached the maximum amount per country or 20% of total ceiling amount in May 2010, therefore MOF suspended the GSP preferential for Aluminum item originated in China on May 18, 2010. After this suspension date until the end of the fiscal year, Chinese origin Aluminum items are to be imposed in MFN rate. Other same examples of suspension of GSP privilege to Chinese origin items are; Fireworks (HS 36.04) on May 18, Article of leather (HS 43.02 - 43.03) on May 18, and certain carpets and other textile floor coverings (HS 57.02) on June 16, and garments and clothing accessories of cotton (HS 62.09) on May 18 etc. Most of GSP ceiling amount of textile items in apparel industry are used up by Chinese origin items in early stage of fiscal year.

The background of this amendment plan is rapid increase of the import from China. The import amount from China to Japan exceed JPY10 trillions, this makes China as top trade partner country for Japan. Chinese origin products are generally accepted as competitive in international market, questions come arise why Chinese origin products occupy the most of GSP preferential treatment which is a trade measure for contributing to developing countries.

MOF plan to implement this GSP ceiling limitation amendment starting from next fiscal year, April 2011. This will correct the disproportion among GSP eligible countries, and the developing countries other than China will be able to enjoy more GSP preferential opportunity, but the cost of import from China is expected to increase due to less GSP utilization allowance to China. Especially for small medium companies who import apparel items and daily necessities will be negatively affected because most of such items are imported from Chinese manufacturing sites and supply source is not diversified enough to other countries or regions.

Traders who import from China and utilize GSP preferential tariff are encouraged to carefully plan the sourcing strategy for next fiscal year.

Singapore Summit on Export Controls Compliance

2010-07-20T16:30:00.004+09:00

As this blog readers are fully aware, multinational companies who have international operation cannot disregard the importance of export control in Asia region.
In October 20 & 21, 2010, American Conference Institute ("ACI") will have Singapore Summit on Export Controls Compliance in Marriott Hotel in Singapore.
This seminar is really useful for executives and managers who are in charge of trade compliance in global companies.
Details are in this URL: http://www.americanconference.com/Singapore.htm

I will be a one of the speakers on Oct 21 afternoon session, "Japan Export Controls: Preventing Product Classification Pitfalls", together with Mr. Riko in Mitsubishi Corp, General Manager - Security Trade Control Office. It would be really exciting opportunity for me.
Sub-topics of our presentation are as follows.

• How to verify whether your products are controlled under basic Japan controls.
• Discussing the uniqueness of classification numbering scheme.
• Preventing common mistakes in language translation.
• Overcoming operational challenges in “parameter sheet”for enough evidence of classification.

As a speaker, my colleagues and friends are entitled to $200 off the price. Before Aug 17 (early bird expiration date), you will have $500 off compared to the standard price.
My blog reader can be regarded as my friend and enjoy registration fee discount. If you want to have discount, please contact to Bryan Cave International Trade via Useful Link in the right corner of this blog.

Progress Made on Trans-Pacific Trade Deal

2010-07-01T16:03:00.001+09:00

The second round of negotiations for a comprehensive Trans-Pacific Partnership Agreement between the U.S. and seven other countries concluded in California in June. Progress on the agreement is moving forward with trade officials hopeful that the text of all chapters of the agreement will be tabled in the third negotiation round set for Brunei in October.

The partnership would bring the U.S. together with four countries that already have free trade deals with the U.S. - Singapore, Chile, Australia and Peru - as well as New Zealand, Brunei, and Vietnam. Canada and Malaysia have also expressed interest in joining the pact.

The second round aimed to settle a key issue of how the proposed Trans-Pacific Partnership would overlap with existing free trade deals between its members. Trade officials reportedly stated there was also consensus on other issues, such as exploring additional measures related to job creation and the environment. Yet, sorting out details related to market opening timelines and other issues will take more time.

(Sources: Office of the U.S. Trade Representative; The Wall Street Journal )

Decontrol of “Ancillary Cryptography” Items

2010-06-28T15:19:00.004+09:00

Perhaps many of you know US EAR implements the decontrol of Ancillary Cryptography items on June 25 by adding Note 4 (following the mass market Note 3) to Category 5, part 2, of the Commerce Control List. http://www.bis.doc.gov/news/2010/encryption_rule_summary.pdf

Items incorporating or using “cryptography” will no longer be classified under Category 5, part 2 if their primary function is not communications, networking, computing or “information security” and the cryptographic functionality is limited to supporting the primary function.
Examples of such items include robotics, household appliances, fire alarm systems, inventory management software, CAD software, and transportation systems.
Such items may be self-classified under another category of the Commerce Control List, or as EAR99.

My interest is then, what other countries implement (or schedule of implementation) this Ancillary Cryptography exemption Wassenaar Note 4 into their own domestic export control regulation.

Already Implemented country: US (June 25, 2010), Japan (April 01, 2010), and Hong Kong (June 14, 2010)

Not yet implementing (as of June 27, 2010): EU, Singapore, Korea, and Taiwan. etc.

Different approach: Canada will not incorporate provisions into law until end of 2010 or early 2011. Instead, have Broadbase permit implementation.
http://www.mccarthy.ca/article_detail.aspx?id=5028

Please bear in mind, even if the item is totally same, the classification of cryptography item may be different from country by country, and therefore need export license (or need to seek license exception).

Japan - Canada agreed AEO Mutual Recognition

2010-06-28T11:19:00.003+09:00

On June 25, 2010, Ministry of Finance ("MOF") in Japan announced that Japan and Canada signed the Decision establishing mutual recognition of AEO between the Canada and Japan.

This mutual recognition offers enhanced trade facilitation opportunities provided by customs to certified AEO traders in both sides who have invested in securing their supply chains.

Following the mutual recognition with EU announced on June 24, Canada is 4th country Japan signed AEO mutual recognition, New Zealand, US, and EU.

The contents of the agreement is almost similar to mutual recognition with EU.

In Canada, AEO system is called as Partners in Protection ("PIP")

(Resource: http://www.mof.go.jp/jouhou/kanzei/ka220625.htm )

Japan - EU agreed AEO Mutual Recognition

2010-06-25T11:01:00.004+09:00

Both Japan and EU customs authority will reflect the risk analysis of the status of AEO traders in customs examination or inspection when the goods are exported or imported by AEO traders in other side.
Both parties will respect the status of AEO traders in other side in application of variety of security operation.
Both parties will make effort to develop common system how priorities cargoes are handled in emergency.
Both parties will continue discussion of further benefit of mutual recognition.

(Resource Japan : http://www.mof.go.jp/jouhou/kanzei/ka220624.htm )

(Resource EU : http://ec.europa.eu/taxation_customs/resources/documents/common/legislation/proposals/customs/com(2010)055fin_en.pdf )

In addition, according to Nikkei Newspaper on June 25, AEO mutual recognition with Canada is also in progress. The good news with Canada is expected to be announced within this month.

Japan-Mongolia start EPA study

2010-06-22T13:19:00.003+09:00

The Governments of Japan and Mongolia have agreed on starting joint public-private research on an economic partnership agreement (EPA).
The first meeting will be held over two days from June 24 (Thu) to June 25 (Fri) in Ulan-Bator, to be attended by experts from industry, government, and academia of both countries.

During the first meeting, the experts will exchange views on topics including bilateral economic relations and items to be included in the possible EPA.

Mongolia don't have any FTA with other countries, this is first FTA trial for them.
Mongolia's economy is centered on agriculture and mining. Mongolia has rich mineral resources, and copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production. For Japan, these natural resource is very attractive trade interest. Among export amount from Mongolia, the mining industry consists of 80% approximately.

Japan put Eritrea as UN arms embargo country group of Conventional Weapon Catch-all

2010-06-21T15:28:00.002+09:00

Japan Ministry of Economy, Trade and Industry ("METI") issued News Release that they amend Export Trade Control Order ("ETCO") so that Eritrea is included into UN Arms Embargo Countries Group (ETCO annex #3-2 in Japanese legal term). The promulgation date is June 23, 2010, and the implementation date is September 1, 2010.

By including Eritrea as UN Arms Embargo countries group, an exporter in Japan need to apply export license to METI if the end-use is conventional military purpose. The scope of goods is very broad industrial goods except food and wooden items. Please be noted this catch-all scheme is NOT for Weapon of Massive Destruction ("WMD") rule, but under conventional weapon catch-all rule which was introduced in November 2008. The enforcement practice is slightly eased compared with WMD, e.g. "storage" of conventional weapon is out of scope in end-use, while "storage" is controlled end-use under WMD catch-all.

Eritrea is a country in the Horn of Africa. It is bordered by Sudan and Ethiopia, and have an coastline on the Red Sea. The estimated population is 5 millions. As for trade with Japan, the annual export amount from Japan to Eritrea is approx. 400 millions yen (US$4 millions) in 2007, quite a small amount. The main export item is automobiles, truck and bus etc.

(Source: http://www.meti.go.jp/press/20100618001/20100618001.html )

AJCEP - Philippines entry into force on July 1, 2010

2010-06-17T11:22:00.002+09:00

On May 28 (Fri), 2010, the Republic of the Philippines made the notification on the completion of its internal procedures necessary for the entry into force of the Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations (Japan-ASEAN Comprehensive Economic Partnership Agreement).

With this notification, the Agreement will enter into force on July 1 (Thu), 2010 in relation to the Republic of the Philippines.

This Agreement has already entered into force among Japan, Singapore, Laos, Viet Nam, Myanmar, Brunei, Malaysia, Thailand and Cambodia.
After Philippines implementation, the remaining country who don't enter into force will be Indonesia only.

HKG implement new control list on June 14, 2010

2010-06-15T13:02:00.002+09:00

As reported in this blog on April 30, 2010, Hong Kong update their import & export control list by reflecting recent Wassenaar dual-use items up to end of 2009.

According to the announcement by Trade and Industry Department ("TID"), the revised control list becomes effective on 14 June 2010.
http://www.stc.tid.gov.hk/english/circular_pub/2010_stc04.html

Thai Customs Re-launched Voluntary Self Disclosure Program in May 2010

2010-06-04T13:00:00.002+09:00

The Thai Customs Department has recently authorized the Post-Clearance Audit Bureau to re-launch a voluntary disclosure program from 15 May 2010 to 30 September 2010, where the importers, exporters and related parties can audit themselves and voluntarily disclose to the Customs on any potential customs risks or customs offences found from their self-audit.

Those who voluntarily reports to the Customs Department on the potential customs risks and/or customs offences that result in shortage of import duties and taxes, e.g. false declaration of tariff code, undervalue declaration, misuse of customs privilege and BOI privilege,...etc., shall be eligible for a waiver of import duty penalty and VAT penalty and shall only be subjected to the payment of import duty shortage, VAT shortage and surcharge 1.5% per month. Such waiver is based on 2 conditions as follows:

1) The customs risks and/or customs offences are not caused or made intentionally, and

2) The right to participate in the Customs Voluntary Disclosure Program is just 1 time per a company (those who previously utilized the right shall not be able to join this program).

Importation of restricted goods without import licenses and hand-carrying or smuggling goods into Thailand without duly processing import customs formality will be deemed as intentional customs offences and will not be eligible for a waiver of penalties under the Customs Voluntary Disclosure Scheme.

Related parties therefore are advised to take this golden opportunity by making self-audit and declaring any potential customs risks found to the Customs Department during 15 May 2010 to 30 September 2010so as to minimize duty exposures and comply with customs regulations.

METI Issues Updated Proliferation End-User List for Entities Engaged in WMD

2010-05-26T14:18:00.007+09:00

On May 26, 2010, the Ministry of Economy, Trade and Industry ("METI") updated the End User List of their website. The End User List is a list of entities that may be involved in the development, manufacturing, use and storage of weapon of mass destruction ("WMD") such as nuclear, chemical, bacteriological weapons, and missiles. The updating of the list is usually undertaken once a year.

The number of entities in the updated list increased from last year's 247 to 272. The updated list consists of 34 new entities, while 9 entities were deleted. The net increase is therefore 25 entities. The new entities added are mostly from Iran and North Korea. There are no Japanese entities in the list. Hence, this list is also know as "Foreign User List". The update list can be downloaded from METI web site.
http://www.meti.go.jp/policy/anpo/hp/law_document/tutatu/t08kaisei/t08kaisei_kaiteikasho.pdf
(The name of deleted entities are also available from the bottom end part of this URL.)

The Foreign User list is not an embargo list but an indicative list for METI to determine whether an export license is necessary or not under the Catch-All export control regulation. The entities listed may have or previously had concern regarding WMD or proliferation activities. Export items which are apparently used for purposes other than WMD related activities may not be required to have an export license. Business are encouraged to closely check the end-use purpose when exporting to these entities to determine whether an export license is needed.

Malaysia Export Controls

2010-05-11T13:20:00.003+09:00

More update of Malaysia Export Controls regulation development.
[Thanks to my friend in Singapore, Jason, for providing this information.]

The new Malaysia export control/transshipment law, which passed the Malaysian Parliament on April 5 of this year.

Called the Strategic Trade Act, the legislation "provides for control over the export, transshipment, transit and brokering of strategic items, including arms and related material, and other activities that will or may facilitate the design, development and production of weapons of mass destruction and their delivery systems...." The Act does not specifically identify the goods and technology which are considered strategic, though this term may span the EU list.

The Act also requires permitting for shipments of non-strategic or "unlisted" items to restricted end-users, and denies shipments to prohibited end users. Other provisions of the legislation call for extraterritorial enforcement, imposition of substantial penalties for non-compliance, record-keeping requirements, and potential for exemptions. The Malaysian Ministry of International Trade and Industry is now working on regulations to implement the legislation that will be published in the Gazette at some point.

http://image.techamerica.us/lib/fec3167273600275/m/1/MalaysiaStrategicTradeBill2010.pdf

Hong Kong update export control list again

2010-04-30T16:39:00.008+09:00

On April 30, 2010, Hong Kong Trade and Industry Department ("TID") announced that Hong Kong's control list for strategic commodities is updated to reflect recent change of the international regime.
Hong Kong's current control list was amended in February 2010, and covers the revision adopted by international regimes up to end-2008. The control list update this time is to mirror the latest changes of Wasssenaar dual-use list up to end-2009, which is commonly traded strategic items such as electronics, computers, telecommunications and information security products.

The one of significant changes to traders in Hong Kong’s Schedule 1 list would be removal of certain cryptography items in Category 5 - part 2. By reflecting Note 4 (exemption note of “Ancillary” cryptography) of Wassenaar 2009 list, which decontrol items of incorporating the cryptography as “non-primarily” function, many of digital gadget and software will be no longer the license required items, such as gaming, household appliances, business process software, medical clinical equipments, and CAD software etc.

Another important change would be removal of cryptography devices from Schedule 2, which is the list of "more sensitive" group of strategic items, and require import/export license in transit and air-transshipment in Hong Kong. Schedule 2 contains military items and nuclear related items as such strictly controlled items. Encryption devices in transit through Hong Kong will be no longer require a license.

Effective date of the change is uncertain yet. Once the legal procedure is completed, the Order will be issued to inform traders of the effective date. Last time, the scheduled change was announced in mid-November 2009 and implementation was in early February 2010.

As of April 2010 among Hong Kong, Japan and Singapore, Japan have already reflected Wassenaar dual-use list of 2009, while Singapore still have its dual-use list reflecting Wassenaar as of 2008.

(Source: http://www.stc.tid.gov.hk/english/circular_pub/2010_stc02.html )

Japana extend a ban on all exports to North Korea

2010-04-15T14:05:00.002+09:00

According to the Press Release of The Ministry of Economy, Trade and Industry ("METI") on April 09, 2010, Japanese government has decided to extend a ban on all exports destined for North Korea, and all imports originating in or shipped from North Korea. (This measure has been for 4 years since 2006 with one year term each. )

Outline of the measures

1. The ban on export of all goods destined for North Korea shall be extended by continuing the requirement that exporters obtain export approval from the Minister of Economy, Trade and Industry (Article 48, Paragraph 3 of the Foreign Exchange and Foreign Trade Law ["FEFTL"]).

2. The ban on import of all goods originating in or shipped from North Korea shall be extended by continuing the requirement that importers obtain import approval from the Minister of Economy, Trade and Industry (Article 52 of the FEFTL).

3. To ensure the enforcement of these restrictions, the following transactions shall be banned.
- Transactions involving buying/selling, loaning/borrowing, or giving of goods that involve the movement of the goods between third countries and North Korea (Article 25, Paragraph 6 of the FEFTL)
- Payments of import bills for goods originating in or shipped from North Korea that are imported without import approval (Article 16, Paragraph 5 of the FEFTL).

4. Goods exported for humanitarian purposes shall be exempted from the above restrictions.

Effective period

These restrictions shall be in effect from April 14, 2010 to April 13, 2011.

(Source: METI web site http://www.meti.go.jp/english/press/data/20100409_01.html )

Malaysia's Strategic Trade Bill passed

2010-04-07T12:06:00.002+09:00

I have long time recognized that Malaysia don't have sufficient export control regulation to prevent WMD proliferation, but this will change.

Malaysia government pass Strategic Trade Bill and introduce solid export control regulation.
The summary is in below news source. For the companies who have operating unit in Malaysia should keep monitoring this regulatory development.

http://www.bernama.com/bernama/v5/newsindex.php?id=488051

http://news.brunei.fm/2010/04/06/minister-refutes-suggestions-malaysias-strategic-trade-bill-being-rushed-through/

U.S. CBP Helping Importers with 10+2 Rule

2010-04-01T09:50:00.002+09:00

Noteworthy news to catch up the current status of US 10+2 rule enforcement.

(Source: UPS Trade Broadcast as of March 31, 2010)

Officials from U.S. Customs and Border Protection (CBP) are helping the trade community adjust to the Importer Security Filing rule, commonly known as "10+2" because of the 10 security data elements required from importers and two from carriers, which must generally be transmitted to CBP 24 hours before a U.S.-bound container is loaded aboard a ship. CBP began full enforcement of the rule on January 26, 2010 and plans to gradually step up enforcement measures throughout the year.

During a recent gathering of the Coalition of New England Companies for Trade, Richard DiNucci, director of the Secure Freight Initiative, reportedly told attendees that weekly filings of the 10+2 data have increased by 25 percent since January 26. DiNucci also reportedly stated that, "About 70 to 80 percent of importers are filing, and some ports are 95 to 100 percent compliant." He added that CBP is continuing to reach out to importers to explain the rules.

According to DiNucci, CBP will send out warning letters "shortly" to importers that are not in compliance with the rule but "will not penalize importers who have failed." At the same time, Cynthia Whittenburg, the director of the CBP Trade Facilitation and Administration Division, said the new Importer Security Filing rule would be integrated into CBP's ACE system, when it transitions to what she called "steady state" in 2011.

Global Trade Compliance

Japan-Peru EPA enter into force on March 1, 2012

Japan Customs Posts Rules of Origin Outline for EPA

Singapore adopt Advanced Export Declaration (AED) from 1 April 2013

Singapore Customs Updates STS Handbook

Malaysia STA update

Singapore slightly update export control list Jan 01, 2012

Japan Lifts Ban on Export of Weapons Policy

Export control vs nationality discremination

METI update WMD Proliferation Concerned Parties List on Dec 9, 2011

Export Control Violation again in Japan

Export control violation of semiconductor equipment to China

Hong Kong update Strategic Commodities List

Russia join WTO!

BIS proposed new rules for aircraft and related items

Japan will change definition of "Use"

Japan list Libya as restricted country, remove Sierra Leone

AEO mutual recognition between Japan - Korea effective on Nov. 1, 2011

Japan-Mexico EPA protocol amending signed

Update of license exception of technology transfer in Japan

Export control violation of pump for chemical

METI add more FAQ in post-license manegement

Update of proliferation concern list in Japan

Export ban sanction again to violator North Korea trade

Japan, India EPA entering into force on August 1, 2011

Violation case study - Seibukosan to North Korea

AEO benefits implementation starts in Japan-Singapore

Malaysia export control update

Japan-India EPA entry into force on Aug 01, 2011

India wary of NSG move to restrict ENR exports

New License Exception STA is now announced

Japan sign EPA with Peru

BIS amend CCL to reflect Wassenaar 2010 dual-use list

AEO mutual recognition between Japan - Korea

Japan reflect WA Dec 2010 list update on July 1st, 2011

Japan-EU AEO mutual recongnition implement on May 24, 2011

Navigating Japan's Export Control Regime

What's the most popluar FTA for Japanese exporter?

Additional obligation in General Bulk License and new benefit as return exemption in export of dual-use items

Japan have different legal framwork in mass market exemption

Extra-territorial provision of Japan's export control?

Self-Certification of Origin by ASEAN

Whether sanction is applied to "Southern" Sudan?

It was "out of assumption" in license exemption

BIS support Japan emergency and humanitation relief efforts

Japan extend ban on all trades North Korea

Violation case study - import prohibition sanction

Additional sanction Libyan entities

Safety of Tokyo in Radiation Measurements

Libyan Sanctions by Japan

Draft list of export control of Japan in public comment

Japan sign EPA with India

Ancillary Cryptography exemption in Japan

Singapore new trade facilitation framework "Trade FIRST"

US relax export control to India

Malaysia export control update

Japan eliminate certain GSP tariff targetting China

Japan reflect WA Dec 2010 list update in public comment

New exemption rule in Return of controlled items - no classificaiton required

US EAR relaxation to India

Japan - Peru EPA conclusion of negotiation

Basic policy of FTA - Japanese government

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

Export control web site of IBM Japan

Japanese Customs Published Results of Annual Post-Entry Audit

Japan request for WTO consultation on certain Local Content Requirements in the Feed-in Tariff Program in Ontario, Canada

BIS update CCL implementing Wassenaar 2009

India - Japan agreed EPA

FAQ for Malaysia Stretegic Trade Act

Japan amend Proliferation End-User List Again

US Export Control Reform - What's going on?

Malaysia implement STA by October 2010

Japan add exemption notes to 2B352.d

Singapore Customs amend stragetic goods form (2)

India amend The Foreign Trade Act of 1992

Singapore Customs amend stragetic goods form (1)

Start of SME support in export control

Singapore's AEO Mutual Recognition

WTO Panel reports issued on ITA dispute

Japanese companies avoid trade with Iran

Singapore Customs amend stragetic goods form　(2)

Singapore Customs amend stragetic goods form　(1)