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[Export Regulations under FEFTA]

The contents of export regulation by the Foreign Exchange and Foreign Trade Act* are described in the order of items subject to export permission and approval, procedures of permission and approval, other reference matters, and legal bases.

■ Items subject to Export Permission

1) Outline

ㅇ Items requring permission originally covered internationally agreed items (so-called list control items) in order to prevent the proliferation of weapons of mass destruction and excessive accumulation of conventional weapons. There was a terrorist incident in the United States on September 11, 2001, adding general items that could be used for weapons of mass destruction (so-called catch all items). These items are specified in Appended Table 1 of the Export Trade Control Order (hereinafter referred to as "Export Order").

2) List control items

ㅇ List controls refer to the regulations imposed on the list of 15 items specified in No. 1 to 15 of Appended Table 1 of the Export Order according to the agreement of each country in the international treaty.

<Items subject to list control>

ㅇ The list control items abovementioned are the typical examples. The specific names of the other articles and detailed specifications should mandatorily be confirmed upon the Annex 1 of the Export Ordinance, the Ordinance of the Ministry of Economy, Trade and Industry* and the notifications (the application of the Export Trade Control Ordinance) with extra cautions.

* The Ministerial Ordinance that specifies cargos or technologies in accordance with Annex 1 of the Export Trade Control Ordinance and the Annex of the Foreign Exchange Ordinance(輸出貿易管理令別表第一及び外国為替令別表の規定に基づき貨物又は技術を定める省令). : https://elaws.e-gov.go.jp/search/elawsSearch/elaws_search/lsg0500/detail?lawId=403M50000400049

ㅇ If the item is subject to list control as a result of particular specifications check, the exporter must obtain permission regardless of its purpose or consumer. For example, even export to the company’s own factory overseas or Japanese company requires permission in this case. In addition, every country around the world are the export control areas whereby the authorization of such exportation mandatorily be given.

3) Catch-all control items

ㅇ Catch-all control items are specified under the Article 16 of the Appended Table 1 of the Export Ordinance. However, it is more comfortable for your information to see the other specific information provided upon the web-site of the Ministry of Economy, Trade and Industry listed below.

<Items subject to catch-all control>

※ Catch-all control item information web-site

https://www.meti.go.jp/policy/anpo/law_document/tutatu/t07sonota/t07sonota_kanzeiteiritu.pdf

ㅇ Export permission on export goods is required according to catch-all control if:

① it’s found by the exporter that the relevant items are likely to be used for the development, manufacturing, or use, of weapons of mass destruction, or

② the exporter has been notified that the approval by the Ministry of Economy, Trade and Industry is required

ㅇ Even if the items are subject to catch-all control, export to countries that strictly control export (so-called ‘white countries’ specified in the Appended Table 3 of the Export Order) does not require a permission.

<White countries>

※ Japanese government had officially determined to exclude Korea out of their white country list on August 2nd, 2019, and the determination shall be effective since August 28th in the same year.

4) Exceptions to export permission – Where permission is not necessary

ㅇ Even if the items are subject to export permission, items designated under Article 4-i of Export Order are exempted from permission. Provided, That among list control items, conventional weapons require permission.

ㅇ (Temporary unloaded goods) Of the items temporarily unloaded in Japan, those transported to ‘white countries’ mentioned above does not require permission. Provided, That where one intends to export nuclear weapons, military chemical products, bacterial preparations, or devices to transport or dispense them, etc. to a country other than white countries, he/she shall obtain permission as the exception is not accepted. (Article 4-i-1 of the Export Order)

ㅇ (Exceptions from catch-all control) Of the items under catch-all control, those transported to white countries does not require permission. Provided, That for items used for the development of nuclear weapons, etc. or development, manufacturing, use of conventional weapons, an exception is not accepted, and permission shalll be obtained. (Article 4-i-3 of the Export Order)

ㅇ (Small-sum goods) Cargo under list control No. 5 to 13 or 15 with total amount less than 1 million yen and ceramic composite, etc. specified in Appended Table 3-iii of the Export Order with total amount of less than 50,000 yen are exempted from permission. Provided, That even items applicable to this condition require permission if they’re headed to North Korea, etc. with concerns about dispute. (Article 4-i-4 of the Export Order)

ㅇ (Other exceptions) Goods imported free of charge with planned free export and then exported or goods exported free of charge with planned free import which are notified by the Ministry of Economy, Trade and Industry, supplies for foreign ships and aircrafts, aircraft goods exported free of charge for repair, Japanese diplomatic goods are exempted from permission. (Article 4-i-2 of the Export Order)

※ For more details regarding export permission, you can refer to the site of Security Export Control Policy Division of The Ministry of Economy, Trade and Industry, http://www.meti.go.jp/policy/anpo/index.html (English, Japanese).

■ Items subject to Export Approval

1) Outline

ㅇ Items requring export approval include:

① general approval items such as feeds and freshwater eel fry for securing domestic demand, fishing boats for preventing surging exports or fierce competition, etc. (Appended Table 2)

② items approved for economic sanctions against North Korea (Appended Table 2-ii)

③ certain raw materials for consignment processing such as leather (Article 3 of the Export Trade Control Ordiance, hereinafter “Export Ordiance”)

2) General approval items for exportation – Items specified in Appended table 2 of the Export Order

ㅇ In the following table are items designated for the purpose of securing domestic demand, limiting the quantity or regulating the price of exported goods to prevent the surge of exports or excessive competition, following restrictions by international agreements, export prohibition, etc.

3) Items subject to approval for export to North Korea – specified by No. 2-ii of Appended Table of Export Order

There are designated items which are required to obtain approval for export to North Korea by laws and regulations mentioned above, but based on UN Security Council resolution, export of any cargo but exceptions on humanitarian purpose is prohibitted.

4) Items subject to export approval for commissioned processing

Where raw materials such as hides, fur, leather products and semi-finished products thereof are exported to foreign countries for commissioned manufacture and processing, an export approval from the Ministry of Economy, Trade and Industry shall be obtained.

5) Exceptions from export approval – Items exempted from approval

ㅇ Of the items subject to export approval, temporary unloaded goods mentioned below, etc. prescribed in Article 4-ii of the Export Order don’t require approval. Provided, That the following items among ones on the Appended Table 2 of the Export Order mentioned above are not allowed as exceptions and shall be approved.

ㅇ (Temporary unloaded goods) Export of the items temporarily unloaded in Japan to the final destination does not require approval. Provided, That diamond gemstones on No.1, substances that deplete the ozone layer on 35, wastes, etc. on 35-2, of the Appended Table 2 are not allowed as exceptions and shall be approved. (Article 4-ii-1 of the Export Order)

ㅇ (Items on the Appended Table 5 of the Export Order) Items specified by the Appended Table 5 of the Export Order on the table below don’t require approval. Provided, That diamond gemstones on No.1, chemicals on 35-3, mercury on 35-4, endangered species of animals and plants on 36 of the Appended Table 2, and substances that deplete the ozone layer on 35 of the Appended Table 2 among the items with total amount of 2 million yen or less for free sample and promotion on Appended Table 5, are not allowed as exceptions and shall be approved. (Article 4-ii-2 of the Export Order)

<Exporting items exempted from approval (Appended Table 5 of the Export Order)>

ㅇ (Carry-out daily wastes) Approval is not required when carrying out wastes under 35-2 of Appended Table 2 of the Export Order made in daily life. (Article 4-ii-3 of the Export Order)

ㅇ (Luggages, ocuupational equipment, moving goods) Personal belongings, occupational equipment, moving goods, etc. prescribed in the Appended Table 6 of the Export order don’t require approval. (Article 4-ii-4 of the Export Order)

ㅇ (Small-sum cargo) Of the general approval items listed in the Appended Table 2 of the Export Order, items specified by the Appended Table 7 and within the amount range don’t require approval. For acetone, ethel ethel, and others specified by the Ordiance of the Ministry of Economy, Trade and Industry among narcotics and psychotropics in 21-3 of the Appended Table 2, 300,000 yen; Blood products in 19 and eel fry in 33 of the Appended Table 2, 50,000 yen; Shiitake mashroom fungus in 30 and frozen Manila clams, clams, mussels in 34 of the Appended Table 2, 30,000 yen or less. (Article 4-iii of the Export Order)

In addition, of the general approval items in the Appended Table 2 of the Export Order, goods of total amount of one million yen or less are exempted from approval. (Article 4-iv of the Export Order)

※ Information site about export approval by the Ministry of Economy, Trade and Industry

http://www.meti.go.jp/policy/external_economy/trade_control/index.html

■ The Procedures of Export Permission and Approval

1) The procedures of permission and approval by the Ministry of Economy, Trade and Industry

ㅇ In order to obtain export permission or approval based on the Export Order, following documentation shall be lodged with the Bureau of Economy, Trade and Industry or trade offce with jurisdiction over the address of the exporter. If some requirements are requested by Other Acts, the procedures in accordance with such Acts shall be followed. Especially, wastes, cultural properties, natural monuments and important artworks must be approved by the relevant laws and regulations before they can be approved by the Ministry of Economy, Trade and Industry.

ㅇ Common application documents include:

- For permission of export: Application for export permission

- For approval of export: Application for export approval

- For both permission and approval of export: Application for export permission and export approval

- Statement of reason for application

- Trading agreement (in principle, with provision stating that it will not take effect until a government permit is issued)

- Other relevant materials

ㅇ Examples of application documents by the types of export items include:

- Strategic material: Certificate of income of government of export destination or equivalent document

- Some items controlled for orderly export: Export quota assignment notice by authorities with jurisdiction over the items

- Items under export restriction: Certificate of export permission or guarantee by purchaser

- Other cases: Export credit, chemical analysis table, composition table, etc.

- Other documents required by institution competent to permission and approval

※ The web-site of the Ministry of Economy, Trade and Industry for the information upon the application for export permission

https://www.meti.go.jp/policy/anpo/apply09.html

2) Approval by customs office for some items

ㅇ For items subject to approval in the following table, the authority of the Ministry of Economy, Trade and Industry is entrusted to the customs office. Application for the approval of these items shall be submitted to customs office. (Article 12 of the Order)

ㅇ Among the items in the table above, approval by customs office is only required for:

- Cargo that is not paid all of its value by means of payment

- Cargo carried in the bonded area and shipped from the bonded area to be returned

3) Permission and Approval

ㅇ Where the Bureau of Economy, Trade and Industry or customs office permit or approve export, they issue a certificate of permission or approval with 6 months validity period from the date of permission or approval. Therefore, export clearance procedure shall be completed within this period. (Article 8 of the Order)

ㅇ The Ministry of Economy, Trade and Industry can designate the validity period shorter or longer than 6 months if specially needed. Extension of validity period is also possible, and the practice of extension is entrusted to customs office. (Article 12 of the Order)

4) The procedures of export clearance at customs office

ㅇ The person who intends to export items permitted or approved by the Ministry of Economy, Trade and Industry, etc. shall declare export to customs office with these certificates within 6 month from the date of receiving the certificate of permission or approval.

ㅇ Customs office shall check these certificates, customs export declaration and actual products, and allow customs clearance only if there is no problem in name, standard, quantity, etc., and notify the Ministry of Economy, Trade and Industry of the result.

5) Ex post facto review

ㅇ The Ministry of Economy, Trade and Industry judges whether the exports have been made in accordance with the laws and regulations on the basis of the notification received from the customs office and reports received from relevant persons such as exporters.

■ Other References

ㅇ If any person exports items subject to export permission without permission, the Ministry of Economy, Trade and Industry may ban the exporter from export for a designated period of 3 years or less. In addition, If any person exports items subject to export approval without approval, his/her export can be banned for a designated period of a year or less. (Article 54-2 of FEFTA)

ㅇ In Japan, most of items are subject to regulations such as permission or approval for export, but as the purpose of export, usage of importers, whether it is fine goods or not, etc. are considered, there are not many items requiring permission or approval in the exporters’ view.

ㅇ In many cases, Japan does not associate items that require export permission or approval with HS codes. Accordingly, exporters should check whether the handling items are subject to export control by themselves.

ㅇ Whether the handled items are subject to permission or approval should be judged comprehensively considering not only Export Order described above, but also exceptions or detailed standards of relevant items designated by notification by the Ministry of Economy, Trade and Industry.

※ Every trade necessarily be confirmed and then proceeded for target articles might be changed in every year.

ㅇ This program informs whether the items are subject or not based primarily on HS codes, and relevant laws and regulations shall be checked to be more accurate.

ㅇ The content of 2019 Japanese strengthening export regulations to Korea

- On July 1st, 2019, Japanese government had determined that 3 items within the 'List control' target articles: Hydrogen fluoride, polyimide fluoride and regist, which could be exported to Korea for the period of 3 years with no additional export authorization once the said authorization is granted for the first time(blanket permission), are now mandatorily required to get the authorization for every respective export from now on(individual permission). In addition, the application of export permission, which was implemented at Japanese Regional Bureau of Economy, Trade and Industry, is now changed to be sent to the Safety Security Trade Inspection Division under the Ministry of Economy, Trade and Industry headquarters.

- Since Korea was excluded in the list of 'Catch-all control' article export permission procedure preferred countries(white countries) on August 2nd, 2019, the existing benefits of blanket permission to Korea shall not be allowed and every export from Japan to Korea shall be required to take the individual permission procedures that require the period of 90 working days in general.

However, in case of the special blanket permission(requiring more strict requirements to exporters such as the preliminary confirmation of the self-management than those of general blanket permission), the application of such export permission might be sent to Japanese Regional Bureau of Economy, Trade and Industry as before.

■ Legal Bases

ㅇ Foreign Exchange and Foreign Trade Act

ㅇ Export Trade Control Order (Items subject to permission and approval, etc.)

ㅇ Export Trade Control Ordinance (Application doccuments for export permission and approval, etc.)

ㅇ There are many other notifications (applied to citizen and the staff in the administration) and announcements (applied to the staff in the administration only), etc. that you can check on the site below:

http://www.meti.go.jp/policy/external_economy/trade_control/01_seido/03_law/houreiitiran.html