Tax & Accounting Blog

Japan’s Own Effort on Japan Export Regulation

Blog, Global Trade, ONESOURCE August 20, 2015

Foreign User List – Details of End User List

For the purpose of enhancing the effectiveness of the “WMD catch-all control[1]”, Japan’s End User List provides exporters with referential information on foreign entities for which concern must be considered regarding involvement in activities such as the development of weapons of mass destruction (WMD) and other items such as nuclear, chemical and biological, missile and weapons technology . If the import party to the cargo that is to be exported is found on the End User List, the exporter is required to submit an application for an export license. This requirement is based on the Foreign Exchange and Foreign Trade Act before exporting/transferring specific kinds of goods/technologies; except in the case where it is evident that the cargo and other items will not be used for activities such as the development of WMD. The End User List has been issued since the catch-all control was introduced in April 2002.[2]

The Ministry of Economy, Trade and Industry (METI) issues the End User List. Exporters are required to check “end-use” carefully before exporting any items to the entities on the list. In April 2015, METI revised the End User List based on the latest information to contain 527 entities (increase of 17 entities from the previous version) in 11 countries and regions.

Country Number of companies Country Number of companies
Afghanistan 3 Syria 13
UAE 6 Taiwan 3
Israel 2 China 28
Iran 295 Pakistan 33
India 10 Hong Kong 2
North Korea 120
Total : 515 entities

Japan implements End User List control and catch-all control in line with international export control regimes and for the purpose of preventing the proliferation of WMD and the accumulation of conventional arms and terrorism.  The entities listed are considered as contributing to WMD proliferation.  This list is not an embargoed entity list similar to the United States’ DPL (Denied Parties List), and a license may be granted by METI so long as the end use is obviously not for WMD purposes. Although Japanese companies are doing screening against the U.S. DPL if products contain U.S. technology, the process and procedure for the license application is quite different.

Relationship between Foreign User List and Export License

METI does not prohibit exports to an end user identified on the list.  However, the shipment is then subject to an Export License requirement even if the end use is not related to WMD. To avoid delays and hidden unknowns, based on this requirement from METI, an exporter should screen against the Foreign Use List before concluding contracts with their customer. In the case of where an entity is on the list, the exporter should apply the Export License process similar to their normal export license process and procedure.

Details of Parameter Sheet

According to METI, the majority of violations in recent years are related to classification, namely, misclassification and even non-classification. As a result, the authorities are placing weight on the procedure on how companies classify.  Exporters are required by METI to designate in their organizations a person responsible specifically for classification.  Usually, classification is conducted by the exporter using a special form called “Parameter Sheet” or Komoku-betsu Taihi Hyo (classification check sheet) [3].  Parameter Sheet is a type of product classification decision process, not unlike the U.S. CCL (Commerce Control List). It is issued as a series of booklets published separately by category – for example Electronics (Category 7), Computers (Category 8), Communications/Information security (Category 9), or the like.

Japan Commodity Control List ( Appended table 1 and 2 )
Category 1 Arms Category 9 Communication/Information security
Category 2 Nuclear items Category 10 Sensors and lasers
Category 3 Chemical/Biological weapons Category 11 Navigation/avionics
Category 4 Missiles Category 12 Marine
Category 5 Advanced materials Category 13 Aerospace/propulsion
Category 6 Material processing Category 14 Other ML items
Category 7 Electronics Category 15 Sensitive items
Category 8 Computers Category 16 Items other than those under Categories 1 – 15

* Category 1 – Completely prohibited for import/export

A booklet is made up of parameter sheets for all the controlled items that come under one particular category, and each parameter sheet consists of a set of technological questions related to one entry of a controlled item defined by a specific classification number set in the Export Trade Control Order and the Foreign Exchange Order.  Each question is consistent with a control parameter stipulated in the Orders. For example, questions posed to an encryption item are related to the parameters of the following elements.* Category 1 – Completely prohibited for import/export

  1. Identification of the item
  2. Encryption algorithm
  3. Key length
  4. Encryption functionality
  5. Eligibility to the Cryptography Note

Accordingly, Japanese exporters are generally trying to classify correctly by referring to the control lists and adopting a two-step procedure in which the classification first conducted by an engineer is checked and verified by another person with sufficient knowledge of the regulations. This process is a reflection of Japan’s approach to rigorous classification by exporters.  Japanese exporters are conducting classification by themselves in that there are no official services for this procedure available as there are in more advanced countries.

Relationship between Parameter Sheet and Export License

Based on the answers for each question on the parameter sheet, the classifier can identify whether products are license required or not.  The classifier can proceed to prepare the license application in cases of the final result deeming a license is required. The Parameter Sheet should be submitted with shipping documents (e.g. Invoice and Packing List) to customs during the export declaration process.


Japan’s export control system was founded in 1949.  In 1987, Japan’s present export system was established after an incident involving the export of state-of-the-art machinery from Japan to the Soviet Union[4]. The system itself became ineffective over time, creating problems for exporters. The last few years has seen Japanese industries requesting METI to reform the Japanese system.  Japan’s efforts have been as a major player in Asia in non-proliferation treaties and a member to all the existing international export control regimes.  Japan has implemented a robust export program consistent with the international standards, which includes its outreach activities in in the region.

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[1] Catch-all control: Exporters have to apply for an export license in cases where the item or technology is not on the control lists but could conceivably contribute to WMD proliferation programs. Most goods, technologies and software are currently subject to catch-all control, with the exception of a few items like food and wooden items



[4] Toshiba-Kongsberg Case