Report of Market Access Ombudsman Council (May 13, 1994)

5-(1) Simplifying Procedures for Return Export of Strategic Commodities

1. Complainant: Keidanren

2. Ministry concerned: Ministry of International Trade and Industry

3. Complaint:

Under the Export Trade Control Order based on the Foreign Exchange and Foreign Trade Control Law, the export of "strategic commodities" requires in principle a license from the Minister of International Trade and Industry on each occasion, even when the goods concerned are being returned to the original exporter because of a defect or complaint.

Other countries also have security export controls. While the strategic commodities concept itself is shared virtually by them, the decision concerning whether a specific item comes under the strategic commodities and the export application procedures are left up to the individual countries.

It should be noted that the United States' Export Administration Regulations (EAR) has a general license system which greatly simplifies export application procedures, and which makes it possible to return goods, even if they are classified as strategic commodities, to the original exporter in any country except for certain specified ones, without obtaining individual export licenses.

Given the above, the complainant believes that Japan should have a system similar to that of the United States to facilitate export of returns, enabling returns to be made to the original exporter without obtaining an individual export license.

4. Results of deliberation:

On April 1, 1994, a general bulk license system was introduced for strategic commodities (with the exception of weapons and others) under which after initial application is made, individual application is unnecessary for a specific period. With this system, if the destination is the United States or other western countries, exports of the strategic commodities, including re-export of returns to the original exporter as a result of a complaint and so on, are allowed for a specific period. There by the return re-export application procedures have been greatly reduced.

Further, regarding the license authority for strategic commodities which are being re-exported for return to the original exporter because of a complaint, destinations for which the authority of the Ministry of International Trade and Industry for export license is delegated to the Heads of Customs will be expanded, taking actual workload into consideration and bearing in mind the spread of the general bulk license system.

These revisions will resolve the complaint raised to a considerable extent, but the ministry concerned should continue to simplify procedures as much as possible in the future.

Government decision (June 24, 1994)

5-(1) Facilitating return export of strategic commodities

A general bulk license system for the export of strategic commodities (excluding arms and others) to the U.S. and Europe which greatly simplifies export application procedures has been in effect since April 1,1994.

Regarding delegation of license authority for return export of strategic commodities from the Minister of International Trade and Industry to the Head of Customs, the areas to which this system applies wi11 be expanded during fiscal 1994, pending the spread of the general bulk 1icense system.

Follow-up (June 5, 1995)

5-(1) Simplifying Procedures for Return Export of Strategic Commodities

From April 1995, the scope of licensing authority delegated to the Heads of Customs when strategic commodities are returned because of defects was expanded to include return export of commodities bound for the U.S. and western Europe. (The destinations for which return export licensing authority had been delegated until now had excluded the former Communist bloc nations, the United States, and western Europe.)

(Reference)

As part of the system related to export control of strategic commodities, there is a system to certify that a certain commodity is exempt from the need for an export license and approval. To improve the system, simplification measures will be studied after the necessary adjustments are made and a conclusion will be reached at an early date, for implementation during FY 1995.