Japan have different legal framwork in mass market exemption

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.