JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
With respect to the end user, METI also examines whether the end user is involved in the development of weapons of mass destruction or other uses of con - cern, whether there is a clear and credible explanation of the intended use, and the reliability of the end user based on factors such as its business activities and history. While human rights considerations are not an inde - pendent statutory criterion under the FEFTA, the secu - rity environment in the destination country and the surrounding region may be relevant, as it may have a bearing on the assessment of risks to international peace and security. 3.6 End-User Controls and Post-Shipment Verification Under Japan’s export control regime, end-user under - takings are not required for exports as a general rule. For applications for individual export licences, depending on the goods or technology and the des - tination, a prescribed end-use undertaking or other undertaking from the end user or other relevant party may be required where the end user has been identi - fied or certain conditions are met. For bulk licences, obtaining an end-use undertaking may also be a con - dition of the licence, depending on the type of licence and the goods or technology concerned. An end-use undertaking may include details concern - ing the intended use and end user of the goods or technology, as well as restrictions on use for purposes other than those stated, eg, resale, re-export or re- transfer. Exporters are required to inform end users and other relevant parties of the need to comply with the undertaking. In the ordinary course of business, an exporter that becomes aware of non-compliance with an undertaking is required to report the matter promptly to METI. Where an exporter becomes aware of any resale, re-transfer or re-provision, the exporter is required to provide information to METI to the extent reasonably possible. Japan does not have a comprehensive post-shipment verification system comparable to that of the United States. However, the Japanese government may con - duct appropriate checks and request reports or other information where necessary.
For transfers of defence equipment, the Three Princi - ples on Transfer of Defense Equipment and Technol - ogy and their implementation guidelines require the recipient government to obtain Japan’s prior consent before any use other than the authorised purpose, or any transfer to a third country. In certain circum - stances, confirmation of the recipient’s management system may be accepted in lieu of the recipient gov - ernment’s prior consent. In such cases, written con - firmation, such as an undertaking, may be obtained from the relevant government authority or the person responsible for managing the defence equipment. 3.7 Brokering and Intermediary Activities Brokering or intermediary activities involving defence- related goods and dual-use items may be subject to Japan’s export control under the FEFTA. A party may require a licence, even if it does not itself transport the goods, where it arranges or facilitates certain transac - tions between overseas parties. Where a Japanese resident brokers a sale, lease or gift involving the movement of goods between two foreign countries, prior authorisation (ie, a licence) from METI may be required, depending on the type of goods, the country of shipment, the destination and the intended end use. Where defence equipment is involved, companies should also consider Japan’s Three Principles on Transfer of Defense Equipment and Technology, which underpin Japan’s policy on defence equipment trans - fers. Compliance with the FEFTA alone may therefore not be sufficient. 3.8 Intra-Company and Intra-Group Transfers As a general rule, intra-company or intra-group trans - fers of controlled items or technology remain subject to Japan’s export control regime under the FEFTA. In other words, such transactions are not exempt from export control merely because they take place within the same company group. Accordingly, transfers such as the export of list- controlled goods or list-controlled technology from a Japanese parent company to an overseas subsidiary, or the provision of design information or technical data to an overseas group company, may require a prior
122 DEFENCE CONTRACTS 2026
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