As noted in our previous blog post, the Ministry of Economy, Trade, and Industry (METI) is expected to promulgate regulations requiring companies to report technology transfers in fields where Japan has an advantage that other countries are interested in matching to METI in advance. The Ministry’s Subcommittee on Security Trade Control under the Division on Commerce and Trade of the Industrial Structure Council issued an interim report on March 24 outlining the specifics of the advance reporting system.

The primary objective of the advance reporting system is to address the growing risk of technology leakage by imposing measures to address specific technology leakage risks. The report explains that the previous system, in which technology transferor companies verified the uses and end-users of their technologies, is no longer adequate to prevent the diversion of civilian technology to military use. The report also suggests that the public and private sector share information and discuss their views on companies and regions of concern as well as technology transfer control efforts by other companies and countries to improve the effectiveness, transparency and predictability of the system and its manner of operation.

The report states that an ideal prior reporting system should not immediately require permission from the government for transactions subject to export control. Rather, it should take the following three steps: (1) require companies to report transactions to METI in advance; (2) strengthen dialogue and consultation between METI and companies, including disclosure of METI’s concerns and advice on addressing them; and (3) if concerns about technology leaks cannot be dispelled through dialogue, require permission under the Foreign Exchange and Foreign Trade Control Law.

The following recommendations are made in the report with respect to each of these steps.

Step (1): prior reporting

  • From the viewpoint of fairness and certainty, reporting should be required before the contract for a transaction is signed.
  • The techniques and types of actions to be subject to the reporting obligation should be clearly stated in the laws and regulations.
  • In order to minimize the impact on businesses, it should be indicated in advance how much time the prior reporting process will take.
  • Even if prior reporting is not done, the government should first respond by offering careful guidance except in the most egregious cases.

Step (2): strengthening of communication

  • The government should in principle provide information on concerns about certain companies and regions, technology control efforts being made by other companies and policy trends in other countries.
  • The public and private sectors should communicate actively to promote the goal of satisfactory enforcement.
  • Since information provided may be confidential, the government should manage it appropriately.

Step (3): application for METI’s approval

  • If the public-private dialogue results in a conclusion that it would be effective to attach permission conditions under the Foreign Exchange and Foreign Trade Law, the license application system may be used.
  • However, the use of the license application system should be limited to cases of serious necessity, and it is preferable to aim for an amicable resolution through the public-private dialogue outlined in (2) whenever possible.

The recommendations conclude by stating that while it is necessary to strengthen technology transfer controls, it is also necessary to avoid discouraging companies from doing business overseas and that the government should give sufficient consideration to applications and take appropriate action when companies face difficult situations.

転について、事前報告を義務付ける見込みであることは、先月 26 日付
Client Alert で述べた通りである。同月 24 日、同省の産業構造審議会通商・


許可申請の対象とするのではなく、⑴ 企業から同省に対する事前の通知・報
告を求め、⑵ 同省からの懸念情報共有や助言等を含む対話や相談を強化し、
⑶ 対話によっても技術流出懸念が払拭されない場合に、外為法に基づく許可


(1) 事前の通知・報告について
• 公平性と確実性の観点から、取引の契約が行われる前の報告を義務
• 報告義務の対象となる技術や行為類型は法令上明示されるべきであ
• ビジネスへの影響を最小限にするため、事前の通知・報告プロセス
• 仮に事前の報告が行われない場合も、悪質なケースを除き、政府

(2) 対話や相談の強化について
• 取引先の企業や地域に関する懸念情報、他企業の技術管理に向けた
• 官民双方が議論を尽くし、納得感のある対応を目指すべきである。
• 経済安全保障上機微なものが含まれる可能性もあることから、政府

(3) 経産省への許可申請について
• 官民対話の中で外為法に基づく許可条件を付することが有効である
• もっとも、許可申請制度の活用は、真に必要な場合に限るべきであ



Junko focuses her practice on commercial and trade laws and regulations, WTO dispute settlement, civil and criminal litigation, antitrust law, bankruptcy law and general corporate law. She has extensive experience advising clients on issues involving trade remedy matters such as anti-dumping and countervailing duties, and import restrictions. She also advises on customs matters, classification and valuation issues, export control and sanctions, tariff treatment, FTA/EPA applications, public procurement, and handles antitrust compliance programs for clients.


Takumi's practice focuses on dispute resolution, including litigation and arbitration and corporate compliance matters related to regulatory issues, and internal investigations. He has particular expertise in healthcare regulatory compliance matters and has been seconded to the legal departments of multiple global pharmaceutical and medical device companies.