JAPAN Law and Practice Contributed by: Eiji Kobayashi, Masaki Fujita, Suguru Yokoi and Ryusuke Bushimata, Anderson Mori & Tomotsune
In addition, to prevent the circumvention of sanctions, certain non-Russian entities (for example, entities in China, India, the UAE, Uzbekistan and other countries) have been designated as subject to export bans or financial sanctions. 7.3.2 Criminal Penalties The circumvention of sanctions may be regarded as a breach of sanctions, which opens the door to crimi - nal liability for the circumventing entity and related persons. The potential penalties to an individual offender are imprisonment for up to five years or a fine of up to JPY10 million (but no more than five times the value of the transaction violating the sanctions), or both. In addition, a company for which the individual offender works may also be subject to a fine of up to JPY500 million, but no more than five times the value of the transaction in breach of the sanctions. In fact, criminal cases regarding sanctions primarily involve the circumvention of sanctions, as outlined in 2.2.4 Criminal Enforcement Action . In addition to these, the following cases can be found in publicly available legal sources. • In 2016, a Japanese company was sentenced to a fine of JPY3 million, and an employee thereof received a two-and-a-half-year sentence with a four-year suspended sentence in a case where the export of 7,700 kitchen and daily items in total (valued at around JPY12 million) to Singapore was judged to be a de facto export to North Korea. The employee’s customs declaration stated that
the final destination was Singapore, but instead the employee had the items delivered to North Korea with the assistance of a North Korea-related person. • In 2010, a Japanese company imported agricultural products originating from North Korea (valued at JPY7.6 million) through China, falsely declaring that the products originated in China. In 2015, the company was sentenced to a fine of JPY2 million, while its representative director and an employee were sentenced to two years in prison and one year and eight months in prison, respectively, with a four-year suspension of execution. • In 2011, the courts handed down a one-and-a- half-year sentence of imprisonment, served as a four-year suspended sentence, to an individual who exported three cars (valued at JPY7 million) to South Korea under cover of a fraudulent com - pany, and where said export was determined to be a de facto export to North Korea. The individual insisted that they were not aware of any breach of sanctions since they thought that the delivery to a foreign embassy in North Korea was not prohib - ited. They claimed that they had been asked to deliver the cars only to South Korea, understanding that such delivery was not a breach of sanctions. The court’s conclusion was that the individual was aware of the illegality and had no good reason to believe that their actions were not in breach of the prevailing sanctions. The court also stated that, taking into account the fact, among others, that the individual did not consult with lawyers or special - ists on the nature of the prevailing sanctions, it was doubtful that the individual would have not been aware of the illegality of their actions.
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