[February 2026 Edition] A Complete Overview of Domestic and International Export Regulations — How Companies Should Act in an Era of U.S.-China Rivalry and Economic Security

This is Hamamoto from TIMEWELL. Today, rather than a service introduction, I want to write about the latest developments in export regulations — a topic that no company with global operations can afford to ignore.

As of February 2026, dramatic changes continue in export control, driven by the technology supremacy competition at the heart of the U.S.-China rivalry. The suspension of the U.S. EAR Affiliate Rule, China's export regulations targeting 40 named Japanese companies, and the tightening of independent regulations in the EU and across Asia. I have organized the latest regulatory trends by country and region into a comparative table, and laid out four concrete actions Japanese companies should take immediately.

Reading the Rapidly Shifting Rules of World Trade

As of February 2026, the global trade environment continues to change at a breathtaking pace. Geopolitical tensions — centered on the technology supremacy competition between the U.S. and China — are fundamentally shaking export control policy across countries, particularly in advanced technology sectors such as semiconductors and AI. Export control is no longer a subset of customs procedures. It has become a top-priority issue directly connected to national security — one that directly shapes corporate supply chains, R&D strategy, and business strategy itself.

From the latter half of 2025 through early 2026, developments that could overturn the premises of doing business have unfolded one after another: the U.S. suspension of the EAR Affiliate Rule, China's export restrictions naming 40 specific Japanese companies. In my own daily work supporting clients, I have seen a noticeable increase in the urgent question: "Is my company safe?"

The following is an organized overview of domestic and international export regulations as of February 2026 — covering not just the U.S. and China, but Europe, Asia, the Middle East, and Latin America. In an uncertain era, the precision of your response depends on having accurate information.

The Latest Trends in Export Control in 2026

First, the overall picture. Three major currents characterize the current export control environment.

Deepening U.S.-China Rivalry and Accelerating Decoupling

The dominant driver of change is the U.S.-China rivalry. The competition for supremacy in advanced technologies — semiconductors, AI, quantum computing — only intensifies. The U.S. deploys EAR as a strategic tool, using Entity List designations of specific companies and broad export restrictions based on technical specifications to accelerate the decoupling of China from supply chains. China, in turn, is building its own Export Control Law and Unreliable Entity List framework, positioning strategic materials like rare earths as leverage for countermeasures. This back-and-forth creates tension throughout the global economy.

Mainstreaming of Economic Security

The U.S.-China rivalry has forced every country to sharply internalize the concept of economic security. It exposed the vulnerability of global supply chains — optimized under the principles of free trade — to geopolitical risk. The EU was compelled to rethink energy security through its Russia sanctions. Southeast Asian countries like Thailand and Vietnam are building new frameworks for managing dual-use items. The era has arrived where companies must constantly factor each country's economic security policy as a variable in their business planning.

Growing Geopolitical Risk and the Formation of New Frameworks

Russia's invasion of Ukraine severed energy and food supply networks and reinforced the power of export control as a diplomatic instrument. Geopolitical flashpoints — Middle East conflicts, tensions over the South China Sea — are scattered across the globe. At the same time, there are also moves to facilitate trade in defense equipment and advanced technology among countries sharing strategic interests — AUKUS among the U.S., UK, and Australia being one example. Rather than complete fragmentation, the world may be dividing into multiple blocs, forcing companies to make strategic decisions about which economic sphere they operate in and under which rules.

The U.S. and China Tighten Export Regulations — And the Impact

The United States — Strategic Tightening Centered on EAR

The EAR, administered by BIS at the U.S. Department of Commerce, is one of the most powerful tools in U.S. security policy. Regulations targeting China grow more complex and strict every year.

The One-Year Suspension of the EAR Affiliate Rule — What It Actually Means

In November 2025, BIS announced a one-year suspension of the Affiliate Rule (commonly called the 50% Rule). This rule treats non-U.S. companies as subject to EAR if a U.S. entity owns or controls 50% or more of their voting rights.

The backdrop to this suspension was the enormous $250 million penalty announced against Applied Materials in October 2025. A transaction conducted by the company's Chinese subsidiary was deemed an EAR violation, and the parent company's inadequate oversight was found to be the problem.

The critical point: this one-year suspension is not a relaxation of regulations. BIS characterizes it as a "temporary enforcement suspension." I interpret it as a grace period for building a global compliance framework. Japanese companies with subsidiaries and affiliates overseas must accurately understand how their entire group structure is entangled in EAR's regulatory net and build an effective governance framework. If this year is spent doing nothing, stricter enforcement is likely waiting from November 2026 onward.

At the Frontier of Advanced Semiconductor Controls

U.S. semiconductor controls targeting China have evolved from an approach of regulating by uniform technical standards to a dynamic approach of targeting specific products. The revised license review policy that took effect on January 15, 2026 is emblematic of this shift.

For high-performance AI chips such as Nvidia's H200 and AMD's MI325X, case-by-case review is now applied even for exports to China. The intent appears to be ensuring business opportunities for U.S. companies within the scope of not threatening U.S. technological superiority — rather than a complete ban on the Chinese market. However, "case-by-case" means significant BIS discretion, and a low-predictability environment for exporting companies continues.

The House Foreign Affairs Committee has also passed the AI OVERWATCH Act, and congressional oversight over high-performance AI chip exports only intensifies. TSMC securing an annual export license for its Nanjing plant is good news, but companies should be aware that a structure dependent on individual permits carries its own risks.

China — Countermeasures Through the Export Control Law

Faced with strict U.S. regulations, China is not standing still. Using the Export Control Law enacted in 2020 as its legal basis, China has moved to formalize countermeasures. Against Japan in particular, a series of tough measures have been introduced since early 2026.

Two-Stage Tightening of China's Export Restrictions Against Japan — The Shock of the 40-Company List

China's export restrictions against Japan were tightened in two stages.

The first: on January 6, 2026, China's Ministry of Commerce announced — and immediately enforced — a strengthening of export controls on dual-use items targeting "all end-users and purposes that contribute to Japan's military capability enhancement." Japanese companies began facing demands for more detailed end-use explanations when sourcing from China.

The second: on February 24, 2026, China's Ministry of Commerce published and immediately enforced a list naming 40 Japanese companies and organizations. Honestly, the speed of this was striking. The list is divided into two categories.

The Export Control Regulation List subject to export prohibition — 20 companies — includes Mitsubishi Shipbuilding, Mitsubishi Heavy Industries Aero Engines, the Kawasaki Heavy Industries Aerospace Systems Company, IHI Group subsidiaries, Fujitsu Defense & National Security, NEC Network & Sensor Systems, NEC Aerospace Systems, Japan Marine United, JMU Defense Systems, the National Defense Academy, and JAXA. The export of dual-use items is in principle prohibited.

The Watch List — 20 companies — includes Subaru, TDK, Hino Motors, Mitsubishi Materials, and other manufacturers spanning far beyond the defense industry. Exports are not prohibited, but transactions will be closely monitored.

Because the covered items are broadly defined as dual-use items, the extent to which the impact will spread — from automotive components to electronic components and materials — is difficult to predict. Beyond direct transactions with listed companies, there is also risk that procurement of materials from China could be disrupted for companies connected to these entities through their supply chains.

The Strategic Card of Rare Earths

China has long signaled its willingness to use rare earths — of which it produces the majority of the world's supply — as a strategic card. This latest round of export control tightening against Japan also covers dual-use items that include rare earths, once again highlighting the risk that supply could be manipulated for political purposes. Stable procurement of rare earths essential for Japan's core industries — hybrid vehicle motors, semiconductor polishing agents, and more — is an unavoidable challenge in building supply chain resilience.

Country-by-Country Comparison Table — Key Export Regulation Trends by Country and Region (February 2026)

The story is not only about the U.S. and China. Other major countries and regions are also rushing to strengthen their own export control frameworks. Here is a comparative table of the latest trends in countries and regions that Japanese companies must be aware of.

Country/Region	Regulatory framework	Recent notable developments	Effective/scheduled date	Key covered items	Notes for Japanese companies
United States	EAR, ITAR	1-year suspension of Affiliate Rule (50% Rule); change in license review policy for advanced semiconductors	From November 2025	Semiconductors, AI, aerospace, quantum technology	Rebuilding group-wide compliance framework is urgent
China	Export Control Law	40-company list against Japan (20 prohibited + 20 monitored); tightened management of dual-use items including rare earths	From January–February 2026	All dual-use items, rare earths	Re-evaluation needed of transaction risks with covered companies in the supply chain
EU	EU Regulation 428/2009	20th Russia sanctions package; updated dual-use items list	February 2026	Energy-related technology, industrial machinery	Complete review of Russia-related business is required
UK	UK Export Control Act	Relaxation of defense trade restrictions related to AUKUS; consolidation to UK Sanctions List	January 2026	Defense equipment, dual-use items	Business opportunities exist within the AUKUS framework
India	SCOMET, FEMA	New emerging technology categories added to SCOMET list; introduction of FEMA Import-Export Regulations 2026	From second half of 2025	Quantum computing, semiconductors	Compliance framework must be built when entering this growth market
Thailand	New framework	Phased introduction of an export control regime for dual-use items	From Q1 2026	Expanding from nuclear-related items to all categories	Early consideration of ICP adoption and blanket license applications for manufacturing bases
Vietnam	Strategic Trade Management Decree	Operations begin under the country's first full-scale strategic goods management legislation	From October 2025	All dual-use items	Framework for compliance with domestic law must be built
Singapore	Strategic Goods (Control) Act	Advanced semiconductor and AI-related export controls tightened in coordination with the U.S.	From December 2025	Semiconductor manufacturing equipment, AI-related technology	Strict management aligned with U.S. regulations is required
Australia	Defence Trade Controls Act	AUKUS-related license-free environment being established	From January 2026	Defense equipment	Opportunities in defense and space sectors
Middle East	Various national laws	U.S. approved AI chip exports to Saudi Arabia and UAE; Iran sanctions significantly tightened	From November 2025	High-performance AI chips, oil-related	Technology transfers to Gulf countries strongly reflect U.S. intentions
Latin America	Various national laws	U.S. partially relaxed oil-related sanctions on Venezuela (OFAC GL46); Russia/Iran-related excluded	From January 2026	Oil-related technology and services	Sanctions relaxation is limited and conditional

Looking at this table, it becomes clear that export control is far from being solely a U.S.-China issue. Countries around the world are beginning to form their own rules based on their national interests and security considerations. Companies need to constantly be aware of this multilayered and complex regulatory web, and accurately understand the meaning of each node within it.

The developments I personally find particularly notable are those in Thailand and Vietnam. If export control frameworks in these two countries — where Japanese company manufacturing bases are concentrated — become fully operational, a revision of local operations will be unavoidable. Thailand plans to expand regulated categories from Categories 7–9 to eventually include Categories 1–6 during 2026. Vietnam's Decree 259, promulgated in October 2025, has only just begun implementation and operational uncertainty remains. Early information gathering and framework preparation will be the decisive factor.

Japan's Response and the Four Actions Companies Should Take Immediately

As international export control trends shift, the Japanese government is also accelerating the development of its legal framework, placing economic security at the center of national strategy.

Japan's Government Moves — From Defensive to Proactive Economic Security

Steady Updates to FEFTA and the Export Trade Control Order

Japan's Foreign Exchange and Foreign Trade Act (FEFTA) and the Export Trade Control Order — the foundation of Japan's export control — are continuously amended to align with international regulatory trends. Most recently, the revised Export Trade Control Order took effect on February 14, 2026. Concrete measures to prevent the leakage of advanced technology have been taken, including tightened regulations on FPGAs (Field-Programmable Gate Arrays).

These updates to list-controlled items will continue. Companies must consistently check the latest regulatory lists and accurately conduct export classification for their products. Including the large-scale amendment of October 9, 2025, FEFTA-related changes have been accelerating over the past six months.

Review of the Three Principles on Transfer of Defense Equipment

The principles governing Japan's weapons exports — a symbol of postwar Japan's pacifism — are also at a major turning point. On February 25, 2026, the ruling Liberal Democratic Party compiled a proposal to revise the operational guidelines of the Three Principles on Transfer of Defense Equipment, abolishing the provision restricting exports to five specific categories ("rescue, transport, warning, surveillance, minesweeping") and making exports of all items — including lethal weapons — permissible in principle.

This represents a significant business opportunity for Japan's defense industry. However, it goes without saying that as exports expand, the requirement for a stringent export control framework becomes even more critical than before.

Creation of a Japanese Equivalent of CFIUS

As measures under the Economic Security Promotion Act advance, the next development to watch is the creation of a Japanese equivalent of CFIUS (the Committee on Foreign Investment in the United States). The government has finalized a policy to amend FEFTA and bring under prior screening not only direct share acquisitions of Japanese companies with strategically important technologies, but also indirect investments made through funds and other vehicles.

The Four Actions Companies Should Take Immediately

We are in an era where "I didn't know" is no longer an acceptable position. Four priorities:

1. Rebuild Transaction Screening and Export Classification Frameworks

What the EAR Affiliate Rule and China's 40-company list make clear is that conventional transaction screening frameworks are no longer sufficient. You need deep screening that goes beyond your direct counterparty — covering their parent companies, subsidiaries, affiliates, and even further upstream to suppliers and customers. Export classification also cannot stop at checking specification sheets; analysis extending to intended end-use is required.

2. Make Supply Chains Visible and Assess Risks

Where and by whom are your products made, and where and to whom are they sold? Making the full picture visible is the first step. Are there components with high concentration of sourcing from specific countries? Is there a risk that counterparties could appear on regulatory lists? Assess with geopolitical risk factored in, and consider diversifying procurement sources and securing alternative components.

3. Enhance Internal Compliance Programs (ICPs)

Continuously review your ICP (Internal Compliance Program) against the latest legal requirements and risk landscape. Document management's commitment, organizational structure, export classification and transaction screening procedures, audit mechanisms, and training programs — and enforce them company-wide. Ongoing education for responsible personnel in relevant departments is the lifeline for preventing violations before they occur.

4. Establish a System for Collecting and Acting on Regulatory Information

Export control information changes daily. Build a framework for quickly capturing information from METI, MOFA, JETRO, CISTEC, and other specialized agencies. The difference between organizations that can analyze captured information for its impact on their own business and rapidly communicate it to management and relevant departments — and those that cannot — is what determines adaptability to change.

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Summary

• The one-year suspension of the U.S. EAR Affiliate Rule is a grace period. Group-wide compliance frameworks should be in place by November 2026
• China's 40-company list against Japan includes 20 prohibited companies and 20 monitored companies. Pay attention to indirect supply chain impacts as well
• Export control frameworks are becoming operational in Southeast Asian countries like Thailand and Vietnam. Manufacturing base responses need to be accelerated
• Japan is also accelerating economic security: FEFTA amendments, relaxation of defense equipment transfers, creation of a Japanese CFIUS equivalent
• Use the comparison table in this article as a starting point for your company's risk assessment. Regulations do not wait

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Reference Information

• METI — Trade Control
• Japan External Trade Organization (JETRO)
• Center for Information on Security Trade Control (CISTEC)
• U.S. Department of Commerce Bureau of Industry and Security (BIS)
• Ministry of Commerce of the People's Republic of China
• Reuters, Bloomberg, Nikkei, and other domestic and international reporting