US, Japan say TPP talks wouldn't exempt areas

On Feb 22, 2013, Joint Statement by the United States and Japan are announced on MOFA web site.

http://www.mofa.go.jp/mofaj/kinkyu/20/H302013022318425501A/filLink2.pdf

Should Japan participate in the TPP negotiations, all goods would be subject to negotiation, however the statement acknowledged "sensitivities" on both ends, including agricultural products for Japan and manufactured goods for the United States. 

The keywords of this announcement is here:

"As the final outcome will be determined during the negotiations, it is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations."

This statement follows the political commitment Prime Minister Shizo Abe made domestically in the general election in December 2012, Japanese government will be able to go forward internal procedure to formally join TPP negotiation.

Violation case study: Export of sample goods can be costly

On this lovely valentine day, I happen to find export control violation case in online news site, it is export of rifle scope without METI export license to China and Germany.  The company name is VIXEN CO.,Ltd, located in Saitama prefecture, Greater Tokyo area in Japan.  They are optical equipment manufacturer, with a focus on astronomical telescopes, binoculars, and microscopes.  The details of violation case is not announced in newspaper, it is only mentioned as "export of rifle scope without export license."  My assessment is the rifle scope is classified as military items, Category 1 (i) of Export Trade Control Order.  The description of this category is "Firearms, ammunition, or accessories or parts ".  Japan have tough stance in export of military items and there is substantially no license exception for Category 1.  For example, low value exception is not applicable to items of Category 1.

This company immediately posted the announcement on their web site and explain what happened.
http://www.vixen.co.jp/info.htm#130214a

The article in their web site shows they admit the export of rifle scope without export license.  But they explain the export transaction was "not for ordinary sales operation, but sample shipments before mass production".  In addition, "For normal sales export transaction, the company have applied and hold export license by METI in due course."  It looks they emphasize this export violation case is unexpected isolated error in sample goods give away.

As most of export control professional know, there is no license exception for sample goods export.  As long as the goods falling into the technical criteria of control items list of Export Trade Control Order, export license is required regardless of sales goods or samples.  The company have to take measures to prevent further violation, investigated by police, and the company name is negatively reported by media.
The careless sample goods export can be costly.

AEO exporter benefit in Japan bulk export license

As of February 9, 2013, a draft proposal to change Japan bulk export license regulation is posted on e-gov web site for public comment. 
http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595113010&Mode=0

The draft proposal is, as always, in Japanese only, let me summarize the main points of change.

1. AEO approved exporter will have a benefit in applying bulk export license:Currently, in order to apply bulk export licenses in Japan (excluding White country bulk license), on-site audit by METI is mandatory requirement for a new applicant.  The proposed new provision will eliminate METI on-site audit specifically for AEO exporter.  It is allowed for AEO exporter to apply bulk license without METI on-site audit.  This exemption is certainly welcomed by AEO exporter who don't have METI bulk license.
2. METI official seminar not required for bulk license:  Currently, the attendance to METI official export control seminar by full time employee is mandatory requirement before bulk license application, and also in renewal of bulk license in extending its validity.  This seminar requirement will be eliminated, and instead, the new provision states as: "for exporter to get latest export control regulatory update and disseminate it to relevant employees internally".  In addition, the participation of the official seminar is not required also in renewal of bulk license.  In essence, exporter don't reply on government effort, but try themselves to keep update.

My finding and comments are:

1. Benefit in AEO exporter: 
   AEO system is governed by Customs under Ministry of Fiance, while export control is under METI.  Historically, there have been very little interaction between Customs and METI in regulatory development in export control, but this announcement is new trial to remove barrier between Ministries.  I appreciate this new trial by METI and Customs.  Because, in order to be AEO exporter, there have been duplicated effort as export control in ICP implementation or set up export operation procedures, it would be welcomed by traders.  However, I notice the AEO exporter is only 246 companies in Japan as of January 2013, and many of them are likely to already have bulk export license.  Therefore, the beneficial impact will be limited to small number of companies.
2. METI official seminar not required: 
   This will be welcomed by traders as relax of the requirements, because METI official seminars have been conducted in only a few chances a year in limited cities, and the number of seats have been limited each time, it has been inconvenient for traders.  The seminar material is always posted and available in METI web site, and its content is pretty basic level.  I find there is no strong reason to continue this government official seminar by spending resource of tax payer in Japan.

The public comment is by March 10, 2013.  The Bulk License Notification will be update accordingly perhaps April 2013 onward.

METI update proliferaiton concerned parties list

Today on Feb 6, 2012, Ministry of Economy, Trade and Industry ("METI") announced the update of their sanctioned parties list, called as "Foreign User List" which is WMD proliferation concerned parties list.

http://www.meti.go.jp/policy/anpo/law09.html#414

The substantial change is actually limited to the addition of only one entity in Hong Kong.  The company called "Leader (Hong Kong) International", is newly added into the list.
This entity is said as an agent for KOMID, a North Korean mining and trading company, that was sanctioned in 2009 and is the North Korea's main arms dealer.  Leader is separately blacklisted by the United Nations and the U.S. Treasury Department.