At a Cabinet meeting on Feb. 26, the government approved sanctions against Russia for its invasion of Ukraine. The sanctions focus on freezing assets of individuals and organizations, strengthening of export controls on products that can be diverted to military use, and banning the issuance of Russian government bonds in Japan.
In response to the approval, the Ministry of Economy, Trade and Industry (METI) announced that it will tighten export controls against Russia starting March 5. The tighter export controls will apply to more than 200 kinds of products and technologies, including weapons, high-performance machine tools with potential military applications, integrated circuits, and diesel engines. Companies will need to apply to the economy minister for permission each time they plan to export those products and technologies. The screening process is expected to take a few months in some cases.
Japan currently requires exporters of sophisticated civilian goods and technologies with potential military applications to obtain its permission. The government used to give a single permission for multiple items exported to Russia on the condition of the improvement of the exporter’s corporate management system. But it will start to require exporters to obtain its permission for each export, as it does for goods and technologies exported to North Korea and Iran.
Russia relies on imports for much of its machine tools. Japan exports machine tools worth several billions of yen to Russia. Some Japanese companies control a large share of the Russian market for certain items. In concert with the U.S. and Europe, the government has decided to suspend even the export of semiconductors of low efficiency. It will revise the relevant government ordinance after working out details of target products and technologies.