JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
licence from METI, depending on the nature of the goods or technology and the destination. Although there is no general exemption for intra-group transfers, Japan provides a number of comprehen - sive (bulk) licensing schemes that may simplify the licensing process where specified conditions are satisfied. For example, companies may be eligible to use the Specified Subsidiary Bulk Licence for exports or technology transfers to qualifying subsidiaries. Where available, this allows multiple eligible transac - tions to be conducted under a single licence rather than requiring individual licence applications for each transaction. Certain activities fall outside the scope of Japan’s export control regulations. Examples include the tem - porary export of goods for the exporter’s own use and the provision of technology that qualifies as being in the public domain under the applicable regulations. Whether an exemption applies depends on the rele - vant statutory and regulatory requirements and should be assessed on a case-by-case basis. However, defence-related goods and technology are subject to particularly stringent export controls, and the availability of a bulk licence scheme must be assessed carefully by reference to the scope of cover - age and the applicable licence conditions. For example, the specific subsidiary bulk licence applies only to eligible transactions meeting pre - scribed requirements. Its scope is limited, and certain particularly sensitive goods and technology, including weapons, are excluded. Companies should therefore ensure that intra-group transfers are appropriately covered by their internal export control compliance procedures and any appli - cable licences, before the transfer takes place. 3.9 Enforcement, Penalties and Voluntary Disclosure Penalties and Administrative Measures Violations of Japan’s FEFTA may result in criminal penalties, administrative sanctions and, in some cas - es, administrative guidance.
Criminal penalties may be imposed on both corpo - rations and individuals. The applicable penalty will depend on the specific facts and circumstances of the case, including the nature and seriousness of the violation. Potential penalties include: • corporations – a fine of up to JPY1 billion; and • individuals – imprisonment for up to ten years, a fine of up to JPY20 million, or both. Administrative measures may also be imposed, including: • a ban on exports and technology transfers for up to three years; • a prohibition on serving as an officer of another company; • publication of the company’s name on METI’s web - site in connection with the violation; • the issuance of warnings; and • requests to submit a written explanation or an incident report describing the circumstances of the violation and the measures taken to prevent recur - rence. Enforcement Authorities Japan’s security export control regime is primarily administered by METI. METI conducts compliance inspections to verify that exporters are properly imple - menting appropriate export controls. Where METI identifies an unauthorised export or technology trans - fer, it may carry out a post-export review to establish the relevant facts and assess measures taken to pre - vent recurrence. At the border, Customs is responsible for export clear - ance checks. Criminal investigations into suspected violations are conducted by the police and prosecu - tors. Voluntary Disclosure Japan does not have a statutory voluntary disclosure mechanism. However, where a company voluntarily reports an export control violation to METI after dis - covering it, the disclosure may be taken into account, together with the circumstances of the case, when determining the appropriate administrative sanctions, potentially resulting in a more lenient outcome.
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