On June 21, 2013, Ministry of Economy, Trade and Industry
(“METI”) in Japan announced the guidance of the interpretation how cloud
computing is treated under export control context. It is the amendment of the Notification No.
492 (locally called as “Ekimu Tsutatsu” its meaning is “Technology/Service
Notification”). This newly added rule will
be effective on September 1st, 2013.
Following is the summary of this cloud computing guidance in
the Notification. The guidance provide
the definition and interpretation how METI consider cloud computing service and
what scenario would be treated as technology transfer.
- New
definition of words are added as follows to help the interpretation of cloud
computing.
“Provide (the technology or service)” is defined as “to make it available
so that others can make use of”.
- “Interpretation
of cloud computing”
(1) In the service to provide computer server for
storage and use of information (“storage service”), there is a possibility that
the information is stored in the server located in foreign country regardless
of the intention of the service user.
Under the contract to make use of storage service, as long as the
contract is limited to the information storage for the service beneficiary’s
its own use, because such contract is not for transaction to provide technology
from service user to service provider, it is in principle NOT regarded as
technology transfer under export.
However, if the transaction is
substantially to provide specific technology from user to service provider, it
is regarded as technology transfer which may require export license. For example, in case the user have contract
with service provider with knowingly that the provider can inspect, acquire or
use the stored specific technology, the contract is regarded as the transaction
to provide the specific technology. In
addition, if the user find that the provider is actually inspecting, acquiring
or using the technology only after the contract is concluded, but the user wish
to continue the contract, the time of commencement of providing technology (in
other words; when export license is required?) is the reasonable time required to
delete information since the such fact is initially found.
Please be noted if the user make
use of storage service in order to provide technology to third party, it is off
course regarded as technology transfer transaction.
(2) Interpretation of the service
the application software located in computer server can be used by others
through Internet without downloading (so-called “SaaS”):
SaaS is considered as the
transaction to make service available others can make use of. Therefore, it is regarded as transaction to
provide, and if the technology is classified as controlled technology, the
transaction requires export license.
However, please be noted if the
software is mass market software, the export license is not required. (The mass market requirements here are;
Generally available to the public by being sold, without restriction, and
Designed for installation by the user without further substantial support by
the supplier.)
Please be noted the commencement
of technology transfer is the time when the service provider make the software
available for users. If export license
for the technology transfer is required, the applicant have to obtain the
license before the service is available.
Comment: In the past, it has never been announced how
METI consider cloud computing under export control context. The idea in the new Notification is
consistent with current export control law and no significant change of
direction is seen in its Notification.
We believe traders may have many “what-if” questions case by case,
because the Notification shows only basic direction and interpretation. According to METI, they announce further
Q&A (*) relating to cloud computing on their web site to help traders’
understanding and to avoid excessive burden resulting from too rigid
interpretation of the new Notification.
Q&A NO. 55 through 62 is for cloud computing.
