Singapore update export control list on April 2010

On February 12, 2010, Singapore Customs announced a planned update of Strategic Goods Control List. To be in line with international practice, Singapore Customs need to update this export control list regularly. As such, the Strategic Goods (Control) Order 2009 will be rescinded and replaced with a new Order 2010, which will incorporate the latest revision adopted by the four multilateral export control regimes such as NSG, MTCR, Australia Group and Wassenaar Arrangement. The new Order will take effect on 01 Apr 2010.

The Strategic Goods (Control) Order 2010 will include new entries, some deletions, as well as some addition of exemption notes. As per dual-use items, the control list will be based on the updated list of Wassenaar Arrangement in December 2008, which are incorporated also into the latest revisions of the European Union (EU)'s List of Dual-Use Items and Technology (updated in May 2009), US EAR (update in December 2009), Hong Kong Dual-use Goods list in Schedule 1 (implemented in February 2010), and Japan export control list (will be implemented in April 2010).

Examples of changes in the list of IT/electronics commodities are as follows:

• Electronics: 3A001.a.7 (Field Programmable Logic Devices) – Due to a change in technical specifications, control over certain field programmable logic devices is eliminated. The new control parameters are clearer and take into account advances in technology.

• Information Security: 5A002 (Encryption) – Control is relaxed over certain wireless personal area network equipment devices with published or commercial cryptographic standard (including home entertainment systems, peripherals for PC, cell phone headsets etc.), reflected through two additional exemption notes (h) and (i).

While the parameter change of controlled list requires traders to review their items classification, good news is to have “re-synchronize” the classification again with US EAR. Since US EAR implemented updated Wassenaar 2008 parameter in December 2009, traders in Singapore who refer US ECCN to their items have experienced classification disparities between US ECCN and Singapore control list. For example in 5A002 items, the cryptography item has been decontrolled by new exemption note (h) or (i) under US EAR since December 2009, but same item is still controlled under DL5A002 under Singapore regulation. From April 2010, such disparities will be resolved for Wassenaar dual-use items. Traders are encouraged to review their classification again based on new list parameter.

Enhancement of Customs Penalty in Japan

On February 9, 2010, Ministry of Finance ("MOF") announced on Customs web site that they will increase penalty amount of customs compliance violation by amending Customs Law.
The draft of the amendment law have been through Cabinet Decision and submitted to the National Diet. The amendment of the law will be on April 01, 2010. (*)
Followings are the quick outline of the penalty enhancement.

• Penalty of Customs Duty evasion
  Amendment of: Customs Law Article 110.
  Current: Imprisonment with work for not more than five years or a fine of not more than five million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than ten million yen, or both
  Reason: With the growing complexity of global trade, and with more vicious and skillful duty evasion method, MOF decided to increase the penalty amount. Also, considered being in line with the penalty amount of other economic crime or domestic tax evasion penalty.
  

• Penalty of violation of prohibited export/import items (for Narcotic, marijuana etc.)
  Amendment of: Customs Law Article 108-4, and 109.
  Current: imprisonment with work for not more than seven years or a fine of not more than thirty million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than thirty million yen, or both
  Reason: Increase of illegal import of Narcotic. To have reasonable balance with other relevant crime related laws, and with the Customs Duty evasion.
  
  
• Penalty of violation of prohibited export/import items (for Intellectual Property Infringement items etc.)
  Amendment of: Customs Law Article 108-4, and 109.
  Current: imprisonment with work for not more than seven years or a fine of not more than seven million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than ten million yen, or both

(Source: http://www.customs.go.jp/kaisei/horitsu.htm#kz220209 )

(*) According to MOF officer, the implementation of the penalty provision is likely to be in June 2010, as it is required to have certain period to make known to the public.

Japan partly implement Wassenaar 2009

On Jan 28, METI announced export control list update for seeking public comment on the web site. Looking at the new list, it include some latest Wassenaar list which was agreed on Dec 2009. Below is the example of digital computer, Category 4.

• "Digital computers" having an 'Adjusted Peak Performance' ('APP') exceeding 1.5 Weighted TeraFLOPS (WT);
  --> In current list, APP is 0.75WT. This is relax of technical specification, and APP 1.5 is according to Wassenaar 2009 list.
  
• Equipment specially designed for aggregating the performance of "digital computers" by providing external interconnections which allow communications at unidirectional data rates exceeding 2.0 Gbyte/s per link.
  --> In current list, the rate is 1.25 Gbyte/s. This is relax of technical specification, and this rate is according to Wassenaar 2009.

I looked into the list more closely whether Category 5 parts Note 4 (exemption like Ancillary encryption) is there or not, but I don't find it.

I'm a bit surprised to see this list update, because it is very early to incorporate Wassenaar list change. Generally, it takes 1 year later or more. In addition, the Wassenaar 2008 list will be implemented from April 2010 in Japan. The public comment list is not reflecting fully of Wassenaar 2009 agreement. It looks like "early harvest" of dual-use items decontrol. As long as I know, no other country implement Wassenaar 2009 so soon.

As this announcement is public comment stage, I will keep monitoring this list change.

(Source: http://search.e-gov.go.jp/servlet/Public?CLASSNAME=Pcm1010&BID=595110005&OBJCD=&GROUP= )