MEETINGS IN JAPAN

The delegation held a number of meetings in Tokyo. These included discussions with the Ministry of International Trade and Industry (MITI), the Ministry of Foreign Affairs, the Customs Service, the Center for Information on Strategic Technology, and the American business community.

The insular features of Japanese society (including loyalty to major companies by lifetime employees) reduce the likelihood that there will be diversions of goods to proscribed countries. This applies less to the smaller manufacturers or trading companies, but it is still a factor. Because the system is based on culture and trust, Japan had, until recently, placed little emphasis on inspection and review for export licenses. The tradition has been to believe the word of the major companies and therefore licenses are quickly approved.

The shock of the Toshiba-Kongsberg affair caused great embarrassment to the Japanese government. Since then, customs checks by the Japanese government have become more extensive, paper oriented, and bureaucratic. The government has noted that these efforts have had the effect of lengthening the export licensing process for all Japanese firms.

Government Officials
MINISTRY INTERNATIONAL TRADE AND INDUSTRY

As a result of the Toshiba-Kongsberg affair, the Ministry of International Trade and Industry, the lead agency in Japan's export control regime, increased its staff devoted to export controls from 43 to 106 people, and has become more attentive to end-user and end-use statements. Approvals for MITI licenses (similar to U.S. distribution licenses) are now dependent on a company's past record of compliance.

One message that was repeated several times during the delegation's meeting with MITI officials was that Japan does not a prove of reexport controls. The officials stated that this was a major impediment to U.S. exports to Japan and a great inconvenience to Japanese companies. They were especially critical of reexport controls applied to intra-CoCom trade. The officials urged that the United States should place more trust in CoCom members.

Japan issues 30,000 export licenses per year to South Korea, Taiwan, Hong Kong, and Singapore. This is roughly 40 percent of all licenses issued. Japan hopes that there will be no diversions through those countries, and it would prefer not to have bilateral, 5(k)-like agreements with them.

The MITI officials commented on the recent CoCom-mandated intensive streamlining of the computer, telecommunications, and machine tools lists, noting that they handle Japanese list reviews. They believe that there should be a nearly continuous, ongoing review, in addition to such special reviews.



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