Japan Held Consultations with the Government of the Republic of Korea under the WTO Agreement Regarding Japan’s Update of Licensing Policies and Procedures on Exports to the ROK
October 12, 2019
On October 11, 2019, the government of Japan and the government of the ROK held consultations regarding Japan’s update of licensing policies and procedures on certain exports to the ROK, in Geneva, pursuant to Article 4 of Annex 2 to the WTO Agreement: the Understanding on Rules and Procedures Governing the Settlement of Disputes.
During the consultations, Japan made it clear that Japan’s measure was undertaken in order to properly control certain exports and transfer of technologies with potential risk of being diverted for military use. In this regard, Japan decided to manage the exports and transfers through individual licensing applications to ensure the proper operation of Japan’s “export control system.” Further, Japan pointed out that the ROK’s allegation of WTO-inconsistency is completely baseless and that it is inappropriate for the ROK to bring ordinary export control measures undertaken based on international regimes by many countries including the ROK to the WTO.
Further, Japan explained the reasons for and the background to the "update of export control on the three items". Specifically, Japan explained that there are underlying concerns including vulnerabilities of the organization and operation of the ROK's export control system and that (i) Japan supplies significant portions of the three items out of overall global supply and thus must properly fulfill its export control obligation; (ii) the export controls undertaken by individual exporters tend to be managed in an inappropriate manner due to the tight delivery schedule requested by users; and (iii) there were actual cases of exports under inappropriate management. Licensing policies and practices were updated in response to the need to enhance appropriate export control over the three items, which have potential risks of being diverted to military use.
Japan explained that export licenses have been granted once items in concern are confirmed to be for civil use and no risk of diversion for military use exists and that Japan's measure is not an export ban, and no impact to supply chains has been found, despite the allegations by the ROK.
The dates and other arrangements for the next consultations will be arranged through a diplomatic channel.
Reference 1: Consultations under the WTO Agreement
If a member country requests consultations under the WTO Agreement, the members concerned shall enter into consultations within a period of no more than 30 days after the date of receipt of the request (Article 4 of Annex 2 to the WTO Agreement: the Understanding on Rules and Procedures Governing the Settlement of Disputes).
Reference 2: Background
July 1, 2019: Japan released the “Update of METI’s licensing policies and procedures on exports of controlled items to the Republic of Korea”.
July 4, 2019: Japan excluded the exports of Fluorinated polyimide, Resist and Hydrogen Fluoride, and the transfer of their relevant technologies (including technology transferred with exports of manufacturing equipment) to the ROK from the items to which relevant bulk licenses were applicable, and started to request exporters/transferors of these items to submit applications for individual export licenses.
September 11, 2019: The government of the ROK made a request for consultations under the WTO Agreement with the government of Japan regarding the abovementioned update of licensing policies and procedures.
※This press release was revised on October 21, 2019 in order to incorporate more accurate language from Japanese to English translation.
Division in Charge
Office of WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau