Export Control in Japan: Classification and Export License Basics

Security export control (安全保障貿易管理) is the system for preventing goods and technology that could be used to develop weapons or weapons of mass destruction from reaching countries or organizations of concern. In Japan, under the Foreign Exchange and Foreign Trade Act (外為法, FEFTA), the exporter determines whether an item is controlled (classification, 該非判定) and, where necessary, obtains a license from the Minister of Economy, Trade and Industry before exporting or providing it. The rules apply not only to large corporations but also to SMEs and foreign-affiliated companies handling components, materials or software.

What security export control covers: exports of goods and provision of technology

FEFTA regulates both the export of goods (Article 48) and the provision of technology (Article 25).

• Export of goods: sending products, components, materials, equipment and the like from Japan to another country. This includes taking items to trade shows, samples and returning repaired items.
• Provision of technology: providing design drawings, specifications, programs, manufacturing know-how and the like to people overseas or to non-residents. This includes provision by email, cloud services, online meetings and technical guidance.

The rules are the same for transactions with parent or group companies in mainland China or Hong Kong. Sharing drawings within a group or sending engineers on assignment can also constitute provision of technology.

List controls vs catch-all controls

Group A comprises the countries listed in Appended Table 3 of the Export Trade Control Order as countries that implement strict export controls. Mainland China and Hong Kong are not included.

The revision of catch-all controls effective October 9, 2025

Based on the April 2024 interim report of the Industrial Structure Council, the Ministry of Economy, Trade and Industry (METI) revised the supplementary export controls, promulgating the relevant Cabinet and ministerial orders in April 2025 with effect from October 9 of that year. The main changes are as follows.

• For general destinations (countries and regions other than Group A and UN arms embargoed countries), item 16 of Appended Table 1 of the Export Trade Control Order was split into specified items and other items, and end-use and end-user requirements (objective requirements) relating to conventional weapons were introduced.
• For UN arms embargoed countries, requirements focusing on the end user were added.
• Even for Group A destinations, a mechanism was introduced under which a license application is required upon notice from the Minister of Economy, Trade and Industry where there is a risk of diversion through third countries.

To screen end users, use the End User List (外国ユーザーリスト) published by METI. The list is amended from time to time, so check the latest version for every transaction. Confirm the scope of covered items and the finer points of the requirements in METI’s explanatory materials and the text of the Cabinet and ministerial orders.

How to carry out classification

Classification means determining whether the goods to be exported or the technology to be provided fall under a list control item (“listed”) or not (“not listed”). Because METI does not perform individual classifications, exporters must make the determination themselves.

1. Gain an accurate understanding of the specifications of the goods or technology (performance, materials, functions, etc.).
2. Check them against Appended Table 1 of the Export Trade Control Order, the Appended Table of the Foreign Exchange Order and the provisions of the Ministerial Order on Goods.
3. Record and retain the result and its basis in a classification certificate.
4. Even if an item is not listed, check the catch-all requirements (end use and end user).

For classifying technology and programs, also check the Appended Table of the Foreign Exchange Order and the circular on service transactions. The scope of control may differ depending on whether the technology relates to design, production or use. Because the production technology may be listed even when the product is not, classify goods and technology separately.

For components and materials that are difficult to classify in-house, you can obtain a classification certificate from the manufacturer. However, the exporter remains responsible for checking its content. Regulations are amended almost every year, so also check the date the certificate was prepared and the version of the regulations it relies on.

Points to note on technology transfers and deemed exports

Providing controlled technology to a non-resident within Japan is also subject to licensing. This is known as a “deemed export” (みなし輸出). Foreign employees working at an office in Japan are in principle treated as residents.

However, following a clarification of practice from May 1, 2022, provision of technology to residents who fall into the following “specified categories” must be controlled in the same way as provision to non-residents.

• Persons under the control of a foreign government or foreign legal entity through an employment contract or similar arrangement
• Persons who receive substantial economic benefits from a foreign government or similar body and are effectively under its control
• Persons acting in Japan on the instructions of a foreign government or similar body

Technology transfers are not limited to cross-border situations. Training overseas engineers at a Japanese factory, carrying a laptop containing controlled technology on an overseas business trip, and sharing design data stored on an overseas server may all need to be checked. It is important for the teams managing internal information systems and export control to work together.

One method set out by METI is to ask new hires to self-declare, in a written pledge or similar document, whether they fall into a specified category. For procedures for hiring foreign employees, see also Hiring foreign employees and work visas.

Applying for an export license and internal compliance

Where a license is required, it must be obtained from the Minister of Economy, Trade and Industry before exporting or providing technology. The application requires documents showing the details of the transaction, the end user and the end use. Reviews take time, so build slack into contract and shipping schedules.

Businesses handling list-controlled items must put in place a compliance framework in line with the Exporter Compliance Standards, including appointing a responsible officer, classification procedures, audits and record retention. Bulk licenses may be available for ongoing transactions, and most of them require the company to have filed an internal compliance program for export control.

What to check for each transaction

• End user and end use: confirm who will use the item and for what, using purchase orders and end-user statements.
• Re-export: for transactions in which goods are sent to a third country via Hong Kong or elsewhere, confirm the final destination.
• Red flags: be cautious where performance or quantities are excessive for the stated use, payment terms are out of line with the market, or the customer refuses to explain the intended use.
• Record retention: keep classification certificates, end-user screening documents and copies of licenses for each transaction.

If doubts cannot be resolved, the basic rule is to halt the transaction and consult METI. METI publishes a flow chart of catch-all control procedures and a checklist for verifying the objective requirements. If you are exporting for the first time, start by using these materials to identify the procedures that apply to your transactions.

Penalties and administrative sanctions for violations

If you discover a violation, voluntarily reporting it to METI may be taken into account when deciding on sanctions. In addition, under the amended Penal Code that took effect on June 1, 2025, the penalty of “imprisonment with work” (懲役) has been replaced by “imprisonment” (拘禁刑). Violations also seriously damage credibility with business partners and financial institutions.

Summary

Export control rests on four basics: classification, checking catch-all controls, managing technology transfers and an internal compliance framework. Transactions between a Japanese base and an overseas head office are precisely where checks are most easily missed. FEFTA procedures for investment from abroad are explained in Inward direct investment under FEFTA, and procedures on the import side in Procedures for an import business. Working with partner professionals, TIMOA helps companies carry out classification and develop internal export control rules. For details, see our IP, Risk & Compliance services.