Japan export licensing system update - free download

I have contributed to certain export control articles in WorldECR. http://www.worldecr.com/

I find one of my articles, "Changes to Japan’s export licensing system" which I drafted sometime this year is now available free-download in WorldECR web site.  (Normally, the articles of WorldECR require subscription.)

http://www.worldecr.com/wp-content/uploads/WorldECR-Japan-export-licensing-article.pdf

This article summarize the procedural change of Japan's export licensing system both in individual license and bulk license in April 2012.  Generally, such procedures in Japan is not available in English in METI web site.
Hope this information is helpful for global traders.

EU and Singapore agree FTA

The European Union and Singapore have successfully completed talks on FTA.  A draft agreement between the EU and Singapore is expected to be signed in the spring, once both sides have sought approval for the deal from their respective parliaments.

Under the agreement, the EU will remove tariffs on all imports from Singapore over five years, while Singapore will immediately allow duty-free access for all imports from the EU. 
The EU is the top destination for Singapore's exports.


(Source:  http://online.wsj.com/article/SB10001424127887324407504578184061043113852.html )

Wassenaar Dec 2012 list update is available now

As an annual event, the dual use list update of Wassenaar Arrangement ("WA") is now available in their web site http://www.wassenaar.org/controllists/index.html

Certain relaxation can be found throughout almost all categories. 

As for Japan, METI will update local regulation around summer in 2013, according to their press release.
http://www.meti.go.jp/press/2012/12/20121213002/20121213002.pdf

EU agree to launch FTA negotiations with Japan

On November 29, EU Council approved a mandate for the Commission to negotiate a free trade agreement with Japan.  Japan is the EU's seventh-largest trading partner while the EU is Japan's third-largest trading partner, with 3.6 % and 11 % respectively of each other's trade in goods in 2011.

It is expected formal negotiation will start early 2013.  For Japan, high customs duty in EU have been concern, e.g. 10% for complete vehicle, and 14% for television unit.  To lower such tariff has been strong request from auto and electronics industry in Japan, while Korea have already implemented FTA with EU since 2011.  For EU, the main agenda is to remove the strong Non Tariff Barrier in Japan, e.g. certificate of standard.

(Source:  http://www.mofa.go.jp/mofaj/press/danwa/24/dgk_1130.html )

Thailand to join TPP talk

Interesting news to share!

Thailand has agreed to join negotiations in a United States-led free trade agreement (FTA) in a move which will be formally announced during President Barack Obama's visit here on Sunday.

Thailand's entry into the Trans-Pacific Partnership (TPP) will be a highlight of the visit by the US president amid concern by activists over the consequences of the far-reaching free trade pact.


http://www.bangkokpost.com/news/local/320886/thailand-to-join-tpp-talks

Japan Customs Published Results of Annual Post-Entry Audit; Still Showing High Non-Compliant Rate in Customs Valuation

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-audit is conducted to review the import declarations made by importer so that correct duties and taxes have been paid. On November 2, 2012, the MOF published on their website the results of the post audit conducted between the period from July 2011 to June 2012. During this period, the Customs officials conducted post-audits on a total of 6,098 importers. The post audit team’s findings are summarized as below:

Amount of short & additional tax 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 JPY 247 billion (approximately US$ 3.1 billion). The amount of customs duty and tax shortage (additional payment) was JPY 15.5 billions (approx. US$ 195 million), an increase of 15% compared with previous year’s post audit results. This amount of shortage and additional duty/tax is the highest and the worst in the history of customs valuation relating to import declarations.

Still high rate of Non-Compliance Companies

The post-entry audit team investigated a total of 6,098 companies. Of these, 4,290 or 70.4% of companies investigated were found to have failed to make correct import declarations, the tendency is to keep about 70% of failure rate in recent years.

The top five product categories and its short duty & tax declarations amount are as follows. These top five categories make up 54.4% of short duty/tax amount.

1. Optical & precision (Chapter 90) JPY 1.95 billions

2. Medical equipment (Chapter 30) JPY 1.86 billions

3. Machine and Mechanical appliances (Chapter 84) JPY 1.66 billions

4. Electronics (Chapter 85) JPY 1.64 billions

5. Chemical (Chapter 29) JPY 1.01 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.

- The transaction price was not included license fee relating to patent of the imported products.


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%. Non-compliance with customs laws may result in imposition of penalties and loss of credibility, it is encouraged for importers to conduct customs health check in order to find hidden issue and manage the penalty risk.

(Reference:  http://www.mof.go.jp/customs_tariff/trade/collection/ka20121102a.htm )

Japan and Canada start EPA negotiation

On October 30, 2012, Ministry of Economy, Trade and Industry ("METI") and Ministry of Foreign Affairs ("MOFA") of Japan jointly announced that Japan and Canada start 1st round of negotiation for the Japan-Canada bilateral EPA. This 1st round of negotiation meeting will be held in Tokyo from November 26 to 30, 2012, and the topics will be how the negotiation will be proceeded from now on and exchange of opinions in area of trade in goods, service, investment, and intellectual property etc.


On March 2012, Japan and Canada completed the joint study of possible effect of bilateral EPA and expressed in the summit meeting that both countries agreed to start EPA negotiation. Japan aim to secure natural resource produced in Canada such as natural gas or shale gas. Also, Japan’s main export item to Canada is automobile, its MFN tariff rate into Canada is currently 6.1%, it is higher than 2.5% of United States. EPA may help to increase automobile export to Canada. On the other hand, Canada expect more export of agricultural products to Japanese market, such as soybean or pork. As Japan treat farm products as sensitive items, the focus in EPA negotiation would be how Japan open agricultural market to Canada.

Japan, China, and Korea FTA discussion working on despite territorial dispute

The senior officials meeting to discuss Japan, China and Korea trilateral FTA was held on September 27, 2012 in Seoul, Korea.  This meeting was working level consultation for preparation of possible trilateral FTA which was agreed to start negotiation in May 2012 in summit meeting of three countries.

Although Japan is in midst of territorial dispute with China and Korea, economic cooperation development looks like being treated as different matter, the FTA preparation meeting took place as scheduled.  At this point of time, the trilateral FTA negotiation will go forward, at least not stopping, and expecting the announcement of FTA negotiation start by the end of 2012.

(Source:  http://www.meti.go.jp/press/2012/09/20120928003/20120928003.html )

Japan and Colombia start EPA negotiation

On September 26, 2012, Ministry of Economy, Trade and Industry ("METI") and Ministry of Foreign Affairs ("MOFA") of Japan jointly announced that Japan and Colombia start negotiation for the Japan-Colombia bilateral EPA. This decision was announced in the summit meeting held by Prime Minister Yoshihiko Noda with Mr. Juan Manuel Santos, President of the Republic of Colombia in New York.


On July 2012, both countries completed the joint study of possible effect of bilateral EPA and expressed the trade between the countries is complementary and EPA would bring significant benefits to the economies of the two countries. Japan mainly exports industrial products including machinery and automobile, while Colombia mainly exports agricultural products, such as coffee and flowers, and mineral resources. The expectation for Japan side is to reduce customs duty rate of automobiles in Colombia, the current MFN rate is 35% for completed vehicle and 5% to 10% for auto parts. In addition, Colombia already signed FTA with Korea on June 2012. To have equal stage in competition with Korean companies is also objective for Japanese government and industry.

The further schedule of negotiation will be discussed later by both countries.

(Source: http://www.meti.go.jp/english/press/2012/0926_02.html )

METI update WMD Proliferation Concerned Party List

On August 1st, 2012, Ministry of Economy, Trade and Industry of Japan (“METI”) announced the update of the Weapon of Massive Destruction (“WMD”) Proliferation concerned party list. The concerned party list has been updated annually, and an exporter in Japan is required to screen its importer or end-user as Catch-all control compliance activity. The update list is available in METI web site as follows: http://www.meti.go.jp/policy/anpo/law_document/tutatu/t09kaisei/120801EUL/t09kaisei_userlist_kohyo.pdf


The updated list covers ten countries and region, total 449 entities. The additional restricted parties are 75 entities since last update, and naturally enough, most of them are entities in Iran and North Korea.

For traders, the deleted entities in update of this time may be of interest. They are as follows, which were on the list until July 31, 2012, but are no longer on the list.

India: Department of Atomic Energy (“DAE”)

India: Mishra Dhatu Nigam Ltd. (“MIDHANI”)

Pakistan: Crescent Engineering Services (Pvt) Ltd.

Pakistan: Engineering and Commercial Services

Pakistan: Institute of Space Technology (“IST”)

Pakistan: Lodgeaction (Pvt) Ltd.

Pakistan: Matrix Technical Services (Pvt) Ltd.

Pakistan: University of Engineering and Technology

China: BVE China Air Technology（北京必威易創基科技有限公司）

Please be noted, this WMD Proliferation concerned party list are not embargo list. As long as it is obvious the transaction is NOT relating to WMD activities, no individual export license application to METI is required. However, trader should take reasonable care about the end-use screening in the trade with listed entities.

METI update EU-Japan dual-use conversion list

As many of export control professionals are aware, Japanese export control dual-use items list has unique numbering system (e.g. Category 5 part 2 is equivalent to Japanese Category 9), however Japan's list is basically reflecting all of international regimes, therefore 1 to 1 category conversion is possible, certain interpretation difference issues exist, though.

So, for global traders, conversion spreadsheet of EU list and Japan list is quite useful which is available to download from METI web site. (http://www.meti.go.jp/policy/anpo/eulist_taihihyo.html )

As of August 1st, 2012, METI updated this EU-Japan dual-use item conversion list to reflect recent changes both in EU side and Japan side.  Updated EU list, REGULATION (EU) No 388/2012, implemented on June 15, 2012 is reflected into this conversion spreadsheet.  At the same time, Japanese dual-use control list, which is effective on August 1st, 2012 and reflecting recent MTCR update and Wassenaar Arragement December 2011 list, is also in this conversion spreadsheet.

The update part is highlighted in blue for convenience of traders.  If you need to compare Japanese category to ECCN or EU list, this conversion spreadsheet is quite useful tool for traders.

Japan - Turkey agree to start study on EPA

Japan and Turkey have agreed to launch a joint study on concluding an Economic Partnership Agreement ("EPA") between the two countries.  The agreement was announced on July 19, 2012 in MOFA press release. 
The joint study, which will involve the public and private sectors as well as academics, will look at a possible economic alliance from various perspectives.  It was expressed the support for the joint study to begin soon and the officials also agreed ministers from the two countries will meet regularly to discuss ways to expand trade and investment.

(Reference: http://www.mofa.go.jp/announce/announce/2012/7/0719_02.html )

Japan export control list updated

As pre-notified in this blog on June 11, Japan will updated its export control dual-use items list to reflect Wassenaar Arrangement update of December 2011.
http://japantradecompliance.blogspot.jp/2012/06/japan-export-trade-control-order.html

After the public comment period due July 8, now the updated list is announced on July 13 on METI web site (official promulgation date is July 19), and will be implemented on August 1st, 2012.

METI web site:  http://www.meti.go.jp/press/2012/07/20120713002/20120713002.html

Please be noted the list is only in Japanese and English translation is not likely to be done by METI.
 

US EAR CCL is updated on July 2

On July 2, 2012, the Bureau of Industry and Security ("BIS") issued final rule of updating the Commerce Control List ("CCL") to reflect the latest Wassenaar dual-use List of December 2011.
This update of CCL also reflect the list change of Australia Group ("AG").

US and Japan is relatively quick to reflect world regime list update.  Japan will also update the list to reflect WA December 2011 list, the regulation is currently public comment review.  I foresee the implementation is sometime in August or September this year.

Compliance or discrimination??

This article is informative case for export compliance people.  The recent case of Apple sales store in U.S.

http://usnews.msnbc.msn.com/_news/2012/06/22/12344611-iran-trade-sanctions-get-personal-in-apple-stores?lite

Japan start anti-dumping investigation to cutsheet of Indonesia origin

According to the press release of METI on June 29, 2012, METI will start investigation of anti-dumping of Indonesia origin cutsheet, which is typically used for A4 size copy paper.  This investigation will be conducted by joint task of MOF and METI based on the Customs Tariff Act.  The period is expected as within one year.  Once the report verify the anti-dumping result, Japan will impose anti-dumping import duty to Indonesia origin cutsheet.

The anti-dumping investigation is requested by Japanese paper industry consisted by eight major companies.  According to them, the cutsheet is exported to Japanese market about 15% lower price than Indonesia market price by two Indonesian companies. 

It is not so often anti-dumping investigation is done in Japan, and first time for paper industry in Japan.


Reference: http://www.meti.go.jp/press/2012/06/20120629001/20120629001-1.pdf
More details are referred in: http://www.customs.go.jp/kaisei/kokuji/H24kokuji/H24kokuji0226.pdf

WTO panel establishment for China rare metal export restriction

On  June 27, 2012, together with the United States and the European Union, Japan requests the establishment of a panel under the WTO Agreement on export restrictions by China on rare earths, tungsten and molybdenum. 

The press release by METI is in below URL.
http://www.meti.go.jp/press/2012/06/20120627005/20120627005-2.pdf

Japan have complained China impose export duty and quantity limitation in export of rare earths.

Japanese origin food import restriction in China after March 2011 disaster

While I was in Shanghai last week, my colleague kindly investigated the captioned issue quickly.
The findings are below and this is still effective as of June 2012.


Right after the earthquake disaster, China Inspection and Quarantine ("CIQ")announced that:


They will prohibit food imports from 12 Japanese regions including Fukushima, Gunma, Tochigi, Ibaraki, Miyagi, Yamagata, Niigata, Nagano, Yamanashi, Saitama, Tokyo, and Chiba.  （福島県、群馬県、栃木県、茨城県、宮城県、山形県、新潟県、長野県、山梨県、埼玉県、東京都、千葉県）
Food imports from other regions require radiation test certificates.

On June 23, 2011, there was a loosing of the policy. It is stipulated that:
"Food imports from Yamagata （山形県） and Yamanashi （山梨県） are no longer prohibited."

Food imports (not inclusive of the HS codes listed in the annex of the policy update which still need radiation test certificates ) from other regions no longer require radiation test certificates but would need country of origin certificates.


********************************************

The above mentioned HS code is as follows:



一、蔬菜及制品

HS编码07章的0701100000至0714909099；

HS编码20章的2001100000至2005999990、2006009010、2006009090。

二、水产品及水生动物

HS编码02章的0210930000、0208400000、0208500000、0210920000；

HS编码03章的0301100010至0307999090；

HS编码05章的0511919010、0511919090；

HS编码12章的1212201010至1212209090；

HS编码15章的1504100000、1504200000、1504300090、1506000010；

HS编码16章的1603000010至1605909090；

HS编码20章的2008993100至2008993900；

HS编码21章的2103909000。

三、茶叶及制品

HS编码09章的0902101000至0903000000；

HS编码21章的2101200000。

四、乳及乳制品

HS编码04章的0401100000至0406900000；

HS编码19章的1901100010至1901900000。

五、水果及制品

HS编码08章的0801110000、0802110000、0802120000、0802901090、0802902000、0803000000、0804100000、0804200000、0804300090、0804400000、0804501090、0804502090、0804503000、0805100000、0805201000、0805202000、0805209000、0805400090、0805500000、0805900000、0808100000、0808201200、0808201300、0808201900、0813100000、0813200000、0813300000、0813401000、0813402000、0813403000、0813404000；

HS编码20章的2006001000、2006002000、2006009090、2007100000、2007910000、2007991000、2007999000、2008192000、2008201000、2008209000、2008301000、2008309000、2008401000、2008409000、2008500000、2008601000、2008609000、2008701000、2008709000、2008800000、2008910000、2008920000、2008991000、2008992000、2008993900、2008999000。

六、药用植物产品

HS编码12章的1211201000至1211209900、1211901100至1211903600、1211903930至1211903999。

Japan Export Trade Control Order amendment proposed rule

On June 9, 2012, the amendment proposed rule of Export Trade Control Order in Japan was put on e-government web site for public comment.  The comment due date is by July 8, 2012.

I don't review the proposed rule closely yet, but quickly find below is the main points.

1. Make it encryption item to non-controlled item
   This is not significant change for non-Japanese importer overseas, but for Japanese exporter who handles encryption item, long awaited and appreciated welcome change.  This part is so-called "Mass market exemption which is noted in Note 3 of Category 5 part 2.  In Japan, off course this exemption has been adopted and implemented, but the legal structure was a bit strange.  The mass market exemption has been not Incorporated into the controlled items list, but set aside in Order and Notification.  So what happens here is that, the item itself is "controlled" e.g. wit the reason of a "symmetric algorithm" employing a key length in excess of 56 bits, but as long as the item meets mass market requirement, it is no license required.  In export customs declaration, such encryption items are regarded as "controlled" dual-use items, but eventually no license required based on the exemption provision on Export Trade Control Order Article 4 and related notification.  This practice actually only increase the documentation work such as parameter sheet preparation.  So, this change just gives comfortable impact to Japanese exporter by reducing paper work, but would be no significant impact to overseas traders.  The judgment of mass market encryption items as "no license requirement" is essentially no change.
   
2. Japanese dual-use list reflect update of Wassenaar Arrangement ("WA") December 2011
   Adopt and reflect WA's latest change, December 2011 list, will be reflected into Japanese controlled items list.  For example, in Category 4, 4A003, "Digital computers" having an 'Adjusted Peak Performance' ('APP') exceeding 3.0 Weighted TeraFLOPS (WT).  Currently it is 1.5 WT.
   
3. Bulgaria is added into White Countries
   Bulgaria will be one of White Countries.  The impact is, WMD catch-all screening is only for non-White Countries, so an exporter in Japan don't have to screen end-use & end-user for WMD catch-all control.

I estimate the change will be implemented sometime a few months after public comment due date.

(Reference:  http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595112031 )

Japan - Australia EPA 16th round of negotiation take place

According to the joint announcement of METI and MOFA on June 8, 2012, the 16th round of negotiation of Japan-Australia bilateral EPA will take place on June 13 through 15 in Tokyo.

During the 3 days talks, the two countries will discuss issued relating to trade in goods and services, energy & natural resources, food & agriculture, and investment.  Since April 2007, Japan and Australia have had 15 rounds of negotiations, but still the goal of the talk is unclear.  The main reason is Japan's concern in agricultural area, less competitive than Australia.

(Reference: http://www.meti.go.jp/press/2012/06/20120608003/20120608003.pdf )

Japan Mongolia EPA first round of negotiation

According to METI and MOFA press release on June 1, 2012, the first round of EPA negotiation with Mogolia takes place fron June 4 through June 7 in Ulan Bator.

The discussion there will be how to proceed the entire negotiation and Terms of Reference.  Also, the specific discussion in area of trade in goods, service trade and investment will take place.

(Reference: http://www.meti.go.jp/press/2012/06/20120601001/20120601001.pdf )

(Result report: http://www.meti.go.jp/press/2012/06/20120607007/20120607007.pdf )

EU dual-use list will be updated soon

On 16 May 2012 the European Union published an amendment to the EU Dual-Use Regulation (Council Regulation 428/2009). The amendment which is made in Council Regulation (EU) No 388/2012 amends the EU Dual-Use List. The new list comes into force 30 days after publication (ie on 15 June 2012).

See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:129:0012:0280:EN:PDF

This update will affect Asian country's dual-use list such as Singapore and Malaysia.  I will monitor closely.

Japan METI Streamlines Procedures for Export License

On 1 April 2012, the Ministry of Economy, Trade and Industry of Japan (“METI”) issued a notification introducing changes in application procedures for individual and general bulk export license for dual-use goods. The notification includes changes to:


i) Single-use License

The notification introduces a new format for End-User Certificate (“EUC”). The EUC is a document signed by the foreign importer or ultimate end-user which is required for application of single-use export license. The notification requires applicants to submit the revised EUC as supporting documents when applying for single-use license. The new EUC format takes effect on 1 April 2012 and the previous EUC format will be valid until 1 July 2012 .An English version of the new EUC format is available on the METI web site.

ii) General Bulk License

The notification splits the existing general bulk license (locally called “Ippan Houkatsu” export license) into two categories:

a. White Country Bulk License

Traders looking to export certain non-sensitive dual-use items to white countries can apply for white country bulk licenses. Requirements for this license are less stringent – only registration of responsible executives and staff involved in classification are required; an Internal Compliance Program (“ICP”) is not required. Application for the license can only be done through the NACCS online system.

b. Special General Bulk License (locally called “Tokuichi Houkatsu”):

This license allows export of certain non-sensitive dual-use items to various countries except high risk countries such as Iran, North Korea, Iraq, and United Nations (“UN”) embargoed countries. The details of eligible items and destination is included in a matrix chart included in the notification. Existing holders of general bulk license will have their licenses automatically converted to special general bulk license automatically. New applicants for the special general bulk license are required to undergo an on-site pre-audit by METI in addition to the existing requirement to implement ICP and registration with METI. Existing general bulk license holders will not be required to undergo on-site audits by METI for license renewal.

The above mentioned new bulk license scheme takes effect on 1 July 2012.

What is US ECCN 0Y521?

US ECCN 0Y521 is new number which is used for items not elsewhere classified on the CCL, functioning as a temporarily "holding" category, such as emerging technology.
The BIS has issued a final rule effective April 13, amends the EAR by establishing new ECCN 0Y521.

Japan - Canada start EPA negotiation

On March 25, 2012, METI announced in their press release that Japan and Canada launch bilateral EPA negotiation after joint-study by both countries.

http://www.meti.go.jp/press/2011/03/20120325001/20120325001.html

The schedule will be discussed later between two countries.

Japan start EPA negotiation with Mongolia

On March 12, 2012, METI and MOFA jointly announced Japan and Mongolia will enter into EPA negotiation.

http://www.meti.go.jp/press/2011/03/20120312010/20120312010.pdf

Mongolia have never had FTA with other country, it is their first FTA for Mongolia.
For Japan, considering small trade volume with Mongolia, it would be no significant impact to Japanese economy, however, the benefit would be "access to rich natural resources" in Mongolia.
No time frame is indicated in the press release, just stated the negotiation will start "as soon as possible".

Amending PSR in Japan-Mexico EPA

With amending protocol of Japan-Mexico EPA effective on April 1st, 2012, certain Product Specific Rule ("PSR") in Annex IV are amended accordingly in order to reflect actual industry practice and convenience of traders.  One of the examples are as follows.

For HS code, 8415.90, 8512.90, and 9032.90 (They are mostly automotive parts)

• Existing PSR (before amending):  CTH only (Change of Tariff Heading or 4 digits change in HS code)
• New PSR (after April 1, 2012):  CTH or VA40% (Value Addition more than 40%)

This change means trader has option to choose CTH or VA40%.
Oh, please take care.  HS code in PSR of Japan-Mexico EPA is HS 2002 version.

(Source:  http://www.meti.go.jp/policy/trade_policy/epa/pdf/japan%20mexico-PSR120305.pdf )

Amended EPA between Japan and Mexico implemented on April 1, 2012

METI and MOFA announced in its press release on March 3 that amending protocol of Japan - Mexico EPA will enter into force on April 1 this year.

This amending protocol provides for further improvement of market access conditions related to trade in goods, revision of the procedures for certification of origin through introduction of a system for declaration of origin by approved exporters and so on.

At the same time, in order to improve convenience, the rules of origin by goods for some products, including automobile components and iron & steel (Annex IV), will be amended corresponding to the actual situation of the industry.



(Source:  http://www.meti.go.jp/english/press/2012/0303_01.html )

Approved exporter system of Japan-Mexico EPA effective April 2012

Approved exporter system in EPA with Mexico, which is self-declaration of goods origin by exporter, will be available to use on April 1st, 2012, according to the material issued by METI.

http://www.meti.go.jp/policy/trade_policy/epa/file/approved_exporter_procedure.pdf

So far, approved exporter system is available only to EPA with Switzerland and Peru.  Japan-Mexico EPA have been implemented since 2005.  By updating the agreement, exporter can make use of this self-declaration system by approved exporter in Japan-Mexico EPA.
There are certain criteria and requirements to be an approved exporter, please see the comprehensive guidance in above URL.

Export control violation - Warning letter by METI

As I wrote on this blog on Dec 07, 2011, an export control violation was reported.  The company name is Kureha Corporation, and its subsidiary Krefine Co., Ltd. 

http://japantradecompliance.blogspot.com/2011/12/export-control-violation-again-in-japan.html

They intentionally made invoice value lower than license exemption value, then exported controlled items (Carbon fiber) to China and Singapore. 

On Feb 27, 2012, METI announced and post warning letter to these companies on the web site.
http://www.meti.go.jp/press/2011/02/20120227003/20120227003.pdf

The penalty does not involve any monetary penalty, nor imprisonment of representative directors.  It is warning only.  METI, however, revoked their General Bulk License, and have them make commitment to improve their internal compliance program in order to avoid further violation.

Mexico join Wassenaar Arrangement

According to Wassenaar Arrangement ("WA") web site, Mexico joined WA effective Jan 25, 2012.
Mexico is 41st participating state of WA.

http://www.wassenaar.org/publicdocuments/2012/Public%20Statement%20on%20Mexico.pdf

Then, the interest of Japanese trader would be whether Mexico is treated as "White Country" or not, which is the country group WMD catch-all screening is exempted. 
The answer is No.  One of the requirements to be White Country is to be a participating state of ALL four international regimes, NSG, AG, MTCR and WA.  Mexico is not participating in NSG, AG, and MTCR.

Annual update of Japan Customs regulation

Japanese customs regulations, including change of tariff rate, Generalized System of Preferences (GSP) scheme update, introducing customs facilitation system etc, are in most cases implemented annually in April.
I reviewed FY2012 customs regulation proposed changes, which are awaiting the review by Diet at this point of time, and find this year's most useful topic for trader would be "(hard copy) invoice is no longer required in customs declaration".

Currently, Customs Law Article 68 stipulate like as follows, "invoice (called "Shiiresho" in Japanese, imply hard copy) should be submitted in export and import customs declaration unless customs advise otherwise." 
Off course, Japan customs have state of the art e-customs declaration system, called as NACCS.
But still, exporter/importer have to submit invoice (hard copy) to customs authority for all declarations based on the Customs Law Article 68.
By amending Article 68, invoice submission is basically no longer required unless customs request, e.g. in more precise review or cargo inspecting case.  Trader's obligation is to keep the invoice either electrically or in documents, and if customs request to submit, just do so.  Therefore, in normal operation, traders will not be required to submit hard copy invoice in each time of customs declaration.

As for implementation timeline, it is expected from July 2012.  As NACCS system's program change is necessary, due to its system work, it cannot be started from April 2012.

The 19th Asia Export Control Seminar - personal note

The 19th Asia Export Control Seminar was held in Tokyo on Feb 7 - 9, 2012. 
http://www.simul-conf.com/outreach/2011/asian_ec/index.html

The presentations by many country representatives are impressive and informative.  Among of them, below is the personal note and new information for me.

Philippine - According to the presentation, the development of national legislation is ongoing, "Strategic Goods Management Act".  Involving the regulation of import, export, re-export, transit and transshipment of strategic goods, technologies, equipment and service.  It looks it is still developing stage, I would like to follow.

Japan MOFA - I have thought transit was not well controlled in Japanese export control regulation, only transshipment is in scope of Foreign Exchange and Foreign Trade Law ("FEFTL").  It is true, but I find today the transit of all cargoes "to and from North Korea" is controlled under another law, "Act on Special Measures concerning Cargo Inspections etc. pursuant to UNSC Resolution 1874 etc."   The Act was entry into force since July 2010 and covers only "DPRK related items", namely, all arms and related materials, WMD related items, and luxury goods.  The enforcement agencies are Japan Coast Guard (JCG) and Japan Customs.  Up to now, no actual enforcement case, and training exercise was conducted by JCG.

Pakistan - I have no knowledge about Pakistan export control, but according to their presentation, they have legal framework and control lists based on EU pattern and includes items from NSG, MTCR, and AG.   I understand their significant geographical location near Afghanistan and Iran, so activity to prevent proliferation in Pakistan is important.

(Summary report by MOFA: http://www.mofa.go.jp/mofaj/gaiko/fukaku_j/asia_yu_19.html )

Japan - Peru EPA some points to note in customs

I attended Japan - Peru EPA seminar by Japan Customs today.  This EPA will be effective on March 1st, 2012.  As the seminar is held by Japan Customs, the topic is mostly in import procedure at Japan port and Certificate of Origin matters.

Some points to note for this EPA with Peru, compared with other EPA Japan have concluded.

- Self-declaration of origin is available for approved exporter.
- In Peru side, the approved exporter is authorized by the Ministry of Foreign Trade and Tourism (El Ministerio de Comercio Exterior y Turismo).
- GSP tariff rate for Peru is no longer available after March 1st, 2012.  The exception is the case GSP is lower than EPA preferential rate.
- This EPA have no general origin rule, in other words, all items have PSR (Product Specific Rule).
- In CO form (issued by authorized organization) have "manufacturer name" column in column #2.
- HS code is 2007 version.
- Japan Customs have a list of approved exporters in Peru.  However, the list is not disclosed publicly.  It is used for Japan Customs to internally check whether the self-declaration of origin is correctly issued by authorized approved exporter.

METI overhaul export license system of Japan

On Jan 28, 2012, METI announced the draft of massive overhaul in export license application procedures for seeking public comment.  These are range of notifications and information with license application and supporting documents forms.  The due date of public comment is by Feb 26, 2012.  Because the change is in notification level by METI, not change of law or ministerial ordinance, it is expected to be officially announced and enforce around March or April 2012.

The draft of notifications are available in below government web site.  (Please be noted these are in Japanese only, no English translation is available.)

http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595112007&Mode=0

I don't yet look through all documents, but there is significant impact to traders, especially in bulk license system.  METI introduce a new type of General Bulk License (or split into two types of General Bulk License).  First, in order to get existing type of General Bulk License, as a new application requirement, on-site audit by METI officer will be introduced.  Currently, the main requirement is to implement ICP and fill in designated "Check List" form, but from perhaps next fiscal year, ICP implementation will be verified by METI officer by visiting a company before granting bulk license.  On the other hand, METI introduce a new type of "simplified" General Bulk License, which is only for export to White Countries, where low risk countries in export compliance such as North America, EU, Australia, New Zealand, and Korea etc.  This "simplified" General Bulk License is NOT required to ICP implementation in export operation, and just registration of responsible person is enough by application through online.

This change is considered as relax of control to low risk countries, but at the same time, tighten the control of bulk license to the other countries by introducing on-site audit beforehand.

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

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

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

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

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

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

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.