Press Conference by Minister Hagiuda (Excerpt)

*Note: This is a provisional translation for reference purposes only.

10:26-10:33 a.m.
Tuesday, July 19, 2022
Press Conference Room, METI

Question-and-Answer Session

Sakhalin-2

Q: Please tell us what you discussed when you met with the Prime Minister last week. That's the first question.

A: I would prefer not to go into details about what was discussed at a meeting with the Prime Minister. I will say, however, that we talked about how Japan's resource interests must not be harmed.

Q: I presume it was in relation to Sakhalin-2. The media have also been reporting that the government is coordinating matters toward maintaining Japan's interests. What are your thoughts on the talks with the two trading companies, and the schedule regarding by when Japan must indicate its intentions to Russia, once Russia has established the new company?

A: Regarding the succession to the rights and obligations pertaining to Sakhalin-2, we are continuing to gather information on the presidential decree, including asking Russia to explain it. As of now, we have not received any information that Russia has established the new company.
We are exchanging information closely with the trading companies, and will decide on future action once the conditions for participating in the new company are made clear.
I would rather not make any predictions about the future prospects. We intend to proceed with actions while continuing to make every effort to ensure a stable supply of energy and cooperating with the other G7 countries.

Export Control

Q: TV Asahi has revealed that some Japanese-made model engines, which were exported to Russia and have raised questions, have also been imported into Ukraine via two EU nations—so-called "White-list Countries"—and are being put to military use there.
First, is METI aware of this? Also, given that there may be more cases like this that go beyond the scope of the Foreign Exchange and Foreign Trade Act, what are METI's thoughts on what action should be taken regarding such situations?

A: I am aware of the report that you mentioned, but will refrain from commenting on individual cases. As a general remark, engines for unmanned aerial vehicles may fall under the Foreign Exchange and Foreign Trade Act depending on their specifications and performance, and permission must be obtained to export them. In addition, even when their specifications and performance do not fall under the regulations, if the exporter knows at the time of exporting them that they could be used for activities such as developing or manufacturing weapons of mass destruction for example, then the so-called catch-all regulations require permission to be obtained.
From the viewpoint of preventing diversion into military use and maintaining peace and security in the international community, METI intends to conduct strict export control, including requiring exporters to check matters such as users of the goods and how they will be used. We also intend to respond carefully to consultations from exporters.
I understand that the engines in this case do not exceed the capabilities subject to the Foreign Exchange and Foreign Trade Act. However, if they are actually being used in such a way as a result, then that is unfortunate. We would like to continue to address the issue thoroughly, working with exporters as well. On the other hand, it will be a loss if this issue diminishes SMEs' highly regarded technological prowess. We intend to address the matter properly from both perspectives.

Chinese Multifunctional Devices Standards

Q: I have two questions. First, it has come to light that the Chinese government is going to introduce new national standards in relation to foreign office-equipment manufacturers—including Japanese ones—stipulating that for multifunction copiers with functions such as printing and scanning, the whole manufacturing process, including the design work, is to be carried out in China. Companies and other stakeholders are expressing concerns that forcing products to be designed and developed in China could result in core technologies' leaking to the Chinese side.
I have two questions about this. My first is what you think of the Chinese government's move toward introducing new national standards like this. My second is how you will respond to China and what actions you intend to take?

A: First, I am aware of the media reports, however, I do not think that such a policy has been officially announced by the Chinese government.
Therefore, as a general comment, I think that compatibility with international rules will be required if a country intends to introduce standards specifying that processes such as developing, designing, and manufacturing products or parts must be carried out within its borders. The government intends to closely monitor future developments, work with industry, and take the necessary measures to ensure that Japanese companies are not unjustly disadvantaged.

Sakhalin-2

Q: Please let me confirm about the maintenance of interests in Sakhalin-2. Although we need to determine what conditions Russia will present, am I correct in understanding that the government will provide as much support as possible so that Mitsubishi Corporation and Mitsui & Co. can remain as shareholders of the new company Russia will establish?

A: Given that the background is somewhat different from trade transactions under normal circumstances, I think that the Japanese companies are facing some disconcerting situations. The government therefore intends to fully discuss matters with the companies, and instead of leaving them to make decisions by themselves, it will provide them with firm support.