Top 20 FAQs on the Foreign Exchange and Foreign Trade Act — Catch-All, Deemed Export, and Technology Transfer

This is Hamamoto from TIMEWELL.

"Isn't the Foreign Exchange Act just about currency? What does that have to do with exports?" That question comes up more often than you might expect. Japan's Foreign Exchange and Foreign Trade Act (FEFTA) also governs export control of security-sensitive products and technology.

Catch-all. List controls. Deemed export. The terms sound technical, but any company trading internationally needs a working grasp. Here are twenty FAQs, aligned with METI primary materials.

If you need classification forms first, download the 2026 classification template pack.

FEFTA Basics

Q1: What is FEFTA?

Its full name is the Foreign Exchange and Foreign Trade Act. Enacted in 1949 and amended many times, it manages cross-border funds and trade. For export control, focus on the parts regulating weapons and dual-use items and technology transfers.

Q2: What activities are regulated?

Mainly three: export of controlled goods, provision of controlled technology (drawings, technical guidance, etc.), and asset freezes against specified countries/entities. This article focuses on the first two.

Q3: How does FEFTA relate to the Export Trade Control Order?

FEFTA is the parent statute; the Export Trade Control Order sits beneath it. FEFTA sets the framework; the Order lists items; the Ministerial Ordinance on Goods sets technical parameter thresholds.

Q4: What happens if you violate FEFTA?

Criminal penalties can include a custodial sentence of up to 10 years (imprisonment unified under the June 2025 Penal Code reform), fines up to 30 million yen (individual) or 1 billion yen (corporation), or five times the value of the goods. Administrative sanctions can include export bans of up to three years. Names may be published on METI's site¹.

Beyond legal exposure, companies can lose customers or supply-chain access. Past enforcement has included administrative sanctions against subsidiaries of domestic manufacturers in transactions linked to sanctioned destinations. Those cases are enforcement outcomes under the statute — not moral verdicts on the companies — but they show how process failures in legitimate civilian trade can still have serious consequences. See also export-control violation penalties.

List Controls

Q5: What are list controls?

They regulate items and technology pre-listed in Annex 1 of the Export Trade Control Order across 15 categories (nuclear, chemical/biological, missile, dual-use, etc.). List-controlled exports generally require a METI license regardless of destination.

Q6: How are the 15 categories organized?

Item 1 weapons; item 2 nuclear; items 3–4 chemical/biological; items 5–9 missile-related; items 10–15 dual-use (advanced materials, electronics, communications, sensors, navigation, crypto, etc.). Most general manufacturers should watch dual-use entries — machine tools, instruments, high-performance computers, and more.

To operationalize entry matching, TRAFEED (product catalog PDF) can help draft candidate entries and rationales. Final decisions stay with your export-control officer.

Q7: How do you decide list control?

By technical parameters — e.g., positioning accuracy for machine tools, key length for crypto, sensitivity for sensors. Over the threshold = controlled; under = not list-controlled. That determination is export classification. See five-step classification and the classification guide.

Catch-All Controls

Q8: What is catch-all?

List clearance is not free export. If there is concern that items will be used in WMD or conventional-weapons development/production, a license may still be required. Catch-all closes gaps left by the list.

Q9: When is a catch-all license required?

Objective requirements: the exporter knows or has reason to know of end-use/end-user concerns. Inform requirements: METI notifies you to apply. Either can trigger a license duty. See the three-requirements catch-all guide.

Q10: Which destinations are in scope?

Mainly every country and region outside Group A (the former "white countries": the 27 countries in Appended Table 3 of the Export Trade Control Order). Even goods and technology not on the control list (Row 16) need a license if the exporter's end-use and end-user checks show a risk of use in weapons development (the objective requirement), or if METI notifies the exporter that an application is required (the "inform" requirement).

The objective requirement does not apply to Group A destinations. But under the revision that took effect on October 9, 2025, a license is now required for Group A destinations too when METI issues an inform notice because of a risk of diversion to countries of concern (Export Trade Control Order, Article 1(3))². The older line that "catch-all does not apply to Group A" no longer holds. The revision also changed how the conventional-weapons catch-all works, and the Foreign End User List was amended, so check METI's latest guidance for the covered items and requirements³. The overall structure is covered in list controls vs catch-all controls, and which countries are in Group A, and how it differs from Groups B to D, in Japan's white countries (Group A) list and Country Groups A–D.

Q11: What are end-use and end-user checks?

Confirm what the product will be used for and who will use it: contract wording, customer interviews, end-use certificates, and screening against the Foreign User List (~835 entities as of the Oct 9, 2025 effective amendment)³. Volume quickly outgrows manual screening.

Deemed Export

Q12: What is deemed export?

Imagine handing technical documents to a foreign national engineer in a Tokyo office. If the technology is controlled, that transfer can be treated as an export. Deemed export regulates providing controlled technology to non-residents in Japan.

Q13: What changed in the 2022 clarification?

Transfers between residents in Japan were often out of scope. After the 2022 clarification, transfers to residents who fall under "specified categories" (e.g., employment with a foreign government, significant income from a foreign government, acting under foreign-government direction) can be in scope⁴. See the deemed-export risk guide.

Q14: Do universities fall under deemed export?

Yes. Instruction of international students/researchers and technology sharing in joint research can be in scope. Many universities run export-control committees. Fundamental-research exceptions exist but are applied narrowly.

Technology Transfer

Q15: What counts as "technology"?

Design data, know-how, test data, source code, oral technical instruction — anything related to design, production, or use. Email, phone, and online meetings count. Oral discussion at an international conference can be enough.

Q16: Are technical presentations on overseas trips regulated?

They can be. Exhibitions and customer meetings involving controlled technology may require prior classification and, if needed, a service-transaction license.

Q17: What about cloud storage accessible from abroad?

If controlled technology sits in a cloud environment reachable from overseas, that can constitute "provision." Limit access to residents in Japan where appropriate and segregate controlled materials.

Practical Operations

Q18: Where do I get official updates?

METI's Security Trade Control site is the primary source — Guidance Version 3.0 (Mar 2026)⁵, amendment pages, and post-export review materials. CISTEC and JETRO also publish practical notes.

Q19: How do I check whether a counterparty is restricted?

Screen against METI's Foreign User List, OFAC SDN, EU sanctions lists, and others. Name variants make manual work brittle; TRAFEED can assist automated screening.

Q20: What should I do first?

(1) Classify products and technology you handle, (2) appoint an export-control owner and document the workflow, (3) systematize end-user checks. Start with classification; improve the rest in stages.

For a quick self-check, use the export-control readiness assessment.

Summary

• FEFTA covers more than currency — it is Japan's core export-control statute
• List controls cover specified items; catch-all covers non-listed items with end-use/user concerns
• Deemed export can apply to domestic technology transfers; the 2022 clarification broadened scope
• Cloud access and overseas technical talks can be "exports"
• Penalty ceilings: up to 10 years custodial sentence; corporate fines up to 1 billion yen (or 5× value)

Related: export-control basics FAQ / list vs. catch-all

TRAFEED catalog (PDF) · Contact

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Sources

• FEFTA text (e-Gov); METI Q&A; CISTEC violation cases; JETRO materials

Footnotes

1. METI post-export review (FEFTA violations) https://www.meti.go.jp/policy/anpo/violation00.html ↩
2. METI, "Revision of complementary export controls (effective October 9, 2025)" (Japanese) https://www.meti.go.jp/policy/anpo/apply-01/20251009_catchminaoshi/20251009catchall.html ↩
3. METI Foreign User List amendment (Sept 29 / Oct 9, 2025) ↩ ↩²
4. METI deemed-export clarification ↩
5. METI Guidance Introductory Edition Version 3.0 (Mar 2026) ↩