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Global Trade Controls: Lack of understanding leads to confusion in Asia

Understanding trade controls, sanctions and regulations on dual-use goods is no simple task. With the aim of minimising risk, maintain compliance, and enhancing competitiveness, the Global Trade Controls Conference brings together experts, exporters and trade compliance professionals.

During the 2019 event, the new draft of the Chinese Export Control Law, and details of the trade controls situation between Japan and South Korea, were discussed extensively. CISTEC have kindly put together a list of relevant material for additional reading, for us to share with our audience post the event.

See below extracts and links to the original source.

China's new Export Control Law Draft

 

Joint Comments by 14 industrial Associations of US, Europe and Japan

Extract: In the context, the current China's Export Control Law Draft has raised some concerns in terms of the following points, and we hope that China’s Export Control Law Draft may be further developed to address such concerns.

  1. Consistency with international trade rules administered by the World Trade Organisation (WTO) and multilateral export control regimes (e.g. The Wassenaar Arrangement)
  2. The unclear differentiation between "dual-use" items and conventional arms and munitions which has the possibility of inhibiting trade and investment commercial mass-market products and technology.
  3. Significant impact on a large number of corporate activities in a wide range of industries
  4. Implementation that promotes cooperation with private industry to work together to achieve common objectives and does not put at risk protections for confidential business information and that assures ongoing input and comments and sufficient time periods for enactment.

We understand that various industrial associations of the United States, Europe and Japan have submitted their own comments so far. In this case, we have decided to submit these joint comments regarding especially important and common concerns on the basis of discussions in a cross-sector manner, and there by ask for your consideration to address these concerns.

View here.

 

Descriptions for Drafting Export Control Law of the People's Republic of China (Draft)

Extract: China's export control bill was announced on June 16 this year and public comment was recruited. CISTEC examined this measure and submitted comments to the Treaty Lawyers of MOFCOM. The following are the bill and public comments submitted by CISTEC.

View here.

 

China Export Control Law Draft Material

Extract:

In the 30 years since our (China's) 1989 founding as a specialized non-profit organization (NPO) dealing with security trade controls in Japan, CISTEC has engaged in a variety of activities to support the implementation of self-controls in the industrial sectors and for universities and research institutions.

As part of these efforts, we have also continued to conduct surveys regarding the implementation of export control systems both in Japan and abroad. In the case of the systems implemented in the Republic of Korea (ROK), we have introduced and explain them in detail in our annual "Export Control Guidance: Foreign Export Control Legal Systems."

Beyond this, since 2012 we have issued our “Guidance on Security Trade Controls for Overseas Offices: Republic of Korea Edition” and both made Japan’s industrial sector aware of these and supported them with legal compliance.

View here.  

Material covering the recent situation between South Korea and Japan

 

Opinion piece on the Republic of Korea’s Draft of Revised “Notice on the Export and Import of Strategic items”

Extract:

We strongly feel that major misunderstandings about the implementation of the Japanese export control system and about the facts of the case are the root cause when it comes to the confusion that has lasted to the present moment since that announcement.

Thus, we have prepared explanatory materials that would help clear the misunderstandings and posted them on the following our website.

View here.

 

On the Update of the Application of Export Controls to the Republic of Korea Basic Interpretation Regarding the Implementation of Japan’s System of Export Controls

Extract:

In the absence of basic understanding of export controls, extreme misconceptions in both Japan and the Republic of Korea (ROK) are escalating incorrect statements, leading to the current confusion. (For example) “It’s an embargo,” “By exclusion from the whitelist, all of exports to that country would require the license,” “Under catch-all control, many items designated by the government will require license applications,” and so on.

It is clear these views are totally wrong in terms of the common sense of people actually working in the export control field.

View here.

 

On the Revision to the Application of Export Controls dated 7 August 2019

Extract:

Misunderstandings regarding the measures discussed there are being amplified through the mass media and other channels in both Japan and the ROK. It is necessary that we avoid a situation in which day-to-day business activities are impeded as a consequence of this. Below, we have compiled those points that we CISTEC regard as the keys toward gaining a basic understanding of Japan's security export controls.

View here.

 

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