Preparing for METI On-Site Inspections — A 30-Item Export Control Audit Checklist

This is Hamamoto from TIMEWELL.

"We received notice of a METI compliance inspection — and we have no idea what to prepare." "We've never been through an inspection before and can't picture what they'll ask." "Our internal record-keeping is a mess, and I'm worried we'll be flagged." These are the kinds of anxious comments I hear regularly from export control managers.

Under FEFTA Article 68, the Ministry of Economy, Trade and Industry (METI) conducts compliance on-site inspections at approximately 100 companies per year. In fiscal 2023, 100 inspections were carried out — 87 of which were at companies with registered Compliance Programs (CPs). Because they tend to come around every few years, "it's been a while since our last inspection and we've lost our footing on what matters" is a common refrain.

This article organizes a 30-item preparation checklist for on-site inspections, a list of required documents, and the 10 most common inspection findings along with countermeasures for each.

What You Will Learn from This Article

The purpose, content, and flow of METI on-site inspections
A 30-item checklist to complete before the inspection
A list of documents you may be asked to produce
10 common inspection findings and countermeasures
Tips for handling the inspection on the day itself

1. What Is a METI On-Site Inspection?

Legal Basis and Purpose

An on-site inspection is an administrative examination conducted by METI under FEFTA Article 68. Its stated purpose is to "support exporters in implementing appropriate export control on their own initiative" — it is different in character from a criminal investigation aimed at punishment.

That said, if a serious legal violation is discovered as a result of the inspection, the outcome can go beyond administrative guidance to include an export prohibition order or criminal referral. "It's supportive, so there's nothing to worry about" is too simplistic a view.

Inspection Target and Frequency

Item	Details
Legal basis	FEFTA Article 68
Number of inspections (FY2023)	100
Of which: CP-registered companies	87
Approximate frequency	Once every 3–5 years (varies by company size and risk profile)
Notification	In principle, advance written notice is provided
Inspection duration	1–3 days (depending on company size)

What Inspectors Examine

There are seven main areas inspectors look at: whether operations are being conducted in accordance with the CP; whether export classification is being carried out properly; whether transaction screening is functioning; whether pre-shipment verification confirms that classified items match items actually shipped; whether education and training is being conducted; whether records are being properly retained; and whether internal audits are being carried out.

In other words, the question is not "Are you doing these things?" but "Do you have evidence that you've been doing them?" That is the crux of the inspection.

2. The 30-Item Preparation Checklist

Use this checklist to identify any gaps between receiving the inspection notice and the inspection date.

Management Framework (Items 1–6)

No.	Checklist item	What to verify	Priority
1	Does the most current version of the CP exist?	Confirm it reflects current regulatory amendments	High
2	Does the organizational chart in the CP reflect the current state?	Has it been updated after personnel changes or restructuring?	High
3	Is the highest-level responsible officer listed as the current representative?	Update required if the president or CEO has changed	High
4	Are records of appointment for export control officers and staff available?	Letters of appointment, designation documents	Medium
5	Is there a record of the CP being communicated internally?	Notification documents, email distribution records	Medium
6	Is the CP revision history managed?	A record of what was changed and when	Medium

Export Classification (Items 7–12)

No.	Checklist item	What to verify	Priority
7	Can sample export classification records be produced?	Multiple classification records from the past year	High
8	Does each classification record include the basis for the classification?	Regulatory article references, technical data	High
9	Does each classification record include the date of the classification?	Allows identification of whether classification was done before or after a regulatory amendment	High
10	Are the classifier and approver separate individuals?	A dual-check structure	High
11	Has re-classification been conducted after regulatory amendments?	Revisions triggered by changes in thresholds	High
12	Is the basis for a non-controlled classification specific?	The technical reasoning for non-controlled must be articulable	High

Transaction Screening (Items 13–18)

No.	Checklist item	What to verify	Priority
13	Are transaction screening records retained?	Screening sheets, approval records	High
14	Are records of cross-referencing against the Foreign User List available?	Date and time of cross-referencing, results	High
15	Is the method for verifying intended use appropriate, with records?	Intended-use clauses in contracts, interview records	High
16	Are documentation confirming the end-user available?	End-Use Certificates (EUCs) retained	Medium
17	Are records of catch-all control verification available?	Use of objective-requirement verification sheets	High
18	Is there a procedure for detecting irregular transactions?	Procedures for responding to red flags	Medium

Shipment Management (Items 19–22)

No.	Checklist item	What to verify	Priority
19	Are pre-shipment verification procedures documented?	Method for confirming classified items match items actually shipped	High
20	Can shipment records be linked to classification records?	Ensuring traceability	High
21	Are license conditions verified at the time of shipment for licensed goods?	Validity period, quantity, and destination confirmation	High
22	Is technology transfer (deemed export) being managed?	Technology disclosure to foreign-national employees, material removal during overseas business travel	Medium

Education and Training (Items 23–25)

No.	Checklist item	What to verify	Priority
23	Are records of education and training sessions available?	Date, attendance roster, content	High
24	Are training materials retained?	Texts, slides used	Medium
25	Have management-level briefings or training sessions been conducted?	At least once per year	Medium

Record Retention (Items 26–28)

No.	Checklist item	What to verify	Priority
26	Are export licenses retained for at least 5 years?	Identify storage location, confirm searchability	High
27	Are contracts, invoices, and shipment-related documents properly retained?	5-year retention obligation	High
28	For electronic records, are tamper-prevention measures in place?	Access logs, backups	Medium

Audit and Improvement (Items 29–30)

No.	Checklist item	What to verify	Priority
29	Has an internal audit been conducted at least once per year?	Audit reports, corrective action records	High
30	Are records of improvements made following audit findings available?	Corrective plans, completion confirmation records	High

3. List of Required Documents

Below are the documents inspectors may ask to see. Confirm the location of each document in advance and ensure it can be retrieved promptly.

Management Framework

Document name	Retention period	Notes
Internal export control regulations (CP)	Always current version	Including revision history
Organizational chart	Always current version	Should show the position of the export control department
Records of appointment for responsible officers and staff	Throughout tenure	Letters of appointment

Classification and Screening

Document name	Retention period	Notes
Export classification records	5 years or more	Including basis for classification and date
Product technical specifications	5 years or more	Technical data used for classification
Parameter sheets	5 years or more	CISTEC item-specific comparison tables, etc.
Transaction screening records	5 years or more	Screening sheets, approval records
Foreign User List cross-reference records	5 years or more	Date, time, and result of cross-referencing
End-Use Certificates (EUCs)	5 years or more	Obtained from counterparties
Objective-requirement verification sheets	5 years or more	Records of catch-all control verification

Transactions, Shipment, Training, and Audit

Document name	Retention period	Notes
Pre-shipment verification records	5 years or more	Confirmation that classified items match items shipped
Export licenses	5 years or more	Issued by METI
Copies of license applications	5 years or more	Including attached documents
Export contracts	5 years or more	Including intended-use clauses
Invoices	5 years or more
Training session records	At least 3 years recommended	Date, participants, content
Training materials	At least 3 years recommended	Texts, slides
Internal audit reports	At least 3 years recommended	Audit results, corrective plans
Corrective action records	At least 3 years recommended	Status of implementation of improvement plans

4. The 10 Most Common Inspection Findings and Countermeasures

Based on METI inspection reports and industry cases, here are the 10 items most frequently cited.

Finding 1: The CP Has Become a Formality

The CP exists on paper, but actual operations have diverged from what it prescribes. The CP states that a "transaction review committee" must conduct the screening, but in practice only a brief email confirmation is performed.

The countermeasure is straightforward: revise the CP to reflect actual operations. There is no point in having an impressive-looking CP if operations are not following it. A "workable set of regulations" is the prerequisite.

Finding 2: Classification Records Lack the Basis for the Classification

Classification records state "non-controlled" but omit any explanation of why that conclusion was reached. This is an extremely common finding.

Build a mandatory field into the classification record format specifically for the basis of the classification. Include the regulatory article number referenced, the parameters compared, and the product's actual measured values. Skipping this step in the interest of saving time will invariably draw scrutiny during an inspection.

Finding 3: Re-Classification Has Not Been Conducted After Regulatory Amendments

After the October 2025 catch-all control amendments, some companies are still using outdated classification results without updating them.

When a regulatory amendment occurs, identify which products are affected and conduct re-classification. The ideal approach is to build a re-classification schedule into the annual plan.

Finding 4: Transaction Screening Is Perfunctory

Cross-referencing against the Foreign User List is being done, but intended-use verification stops at "it says so in the contract, so we're fine."

Create a transaction screening checklist that itemizes specifically what must be confirmed. Where necessary, conduct interviews with the counterparty and retain records of those interviews. Both "the fact that verification was conducted" and "the basis for the verification" are required.

Finding 5: No Records of Training Sessions

Training sessions are being held, but no attendance rosters or records of the training content are being kept. In my experience, this is the most "wasteful" type of finding — being cited for something you're actually doing, simply because there's no documentation.

For every training session, record the date, location, attendance roster, content, materials used, and the person who conducted the session. Retain signed attendance sheets. That alone prevents this problem.

Finding 6: Internal Audits Have Never Been Conducted

The CP includes a provision for audits, but in practice no audit has ever been carried out.

Start with something simple. Beginning with a self-check using CISTEC's Self-Management Checklist is perfectly acceptable. The difference between "never done it" and "done it at least once" has a significant impact on the inspector's impression.

Finding 7: Pre-Shipment Verification Is Insufficient

Export classification has been conducted, but there is no process to verify at the time of shipment that the item being shipped matches the classified item.

Establish and document a procedure for comparing the model number, quantity, and destination against the classification record and license at the time of shipment, and retain verification records.

Finding 8: Technology Transfer (Deemed Export) Is Not Being Managed

Physical export controls are in place, but the provision of technology is not being treated as a regulated activity. Technology disclosure to foreign-national employees, materials taken abroad on overseas business trips, technology transfer in joint research — all of these can constitute deemed exports.

Communicate the concept of deemed export through internal training, and establish rules for technology disclosure to foreign-national employees and for the handling of PCs and materials during overseas business travel.

Finding 9: Subsidiary and Group Company Management Is Insufficient

The CP specifies that the company will provide guidance to subsidiaries, but in practice no concrete guidance or oversight is being carried out.

Periodically assess the export control status of subsidiaries. Ideally, develop unified management standards across the entire group.

Finding 10: Record Retention Period Is Insufficient

Old records have been discarded after fewer than 5 years, or the storage location is unknown and documents cannot be produced during inspection.

Clearly establish the record retention period (5 years or more) as an internal rule and create a ledger of storage locations. Digitizing records to improve searchability is the practical solution.

5. Guidance for the Day of the Inspection

Basic Approach

On-site inspections are supportive in nature, not punitive. There is no need to be excessively defensive toward inspectors. That said, arriving unprepared is something to avoid.

Approach	Specific behavior
Respond honestly	Answer questions truthfully. For things you don't know, say "I'll confirm and get back to you."
Base answers on records	Don't rely on verbal explanation alone — support your answers with documentation
Don't volunteer more than asked	Answer what is asked. There is no need to proactively disclose information that was not requested
Have relevant personnel present	For technical questions about classification, have technical staff present; for transaction screening questions, have sales or legal staff present
Treat findings as opportunities for improvement	When a finding is identified, respond proactively with an improvement plan

Post-Inspection Follow-Up

If you receive improvement guidance or recommendations after the inspection, act on them promptly. Document the findings and share them with relevant internal stakeholders. Develop an improvement plan with clear deadlines and responsible parties. Implement improvements and retain completion records. Verify the status of improvements in the next internal audit.

This entire cycle is itself the best preparation for the next inspection.

6. Strengthening Audit Readiness with TRAFEED (formerly ZEROCK ExCHECK)

The two most common inspection findings are "no records exist" and "records exist but the basis is insufficient." Maintaining appropriate records as a matter of daily routine is ultimately the most effective preparation for an audit. There is a limit to what can be scrambled together in the days before an inspection.

TIMEWELL's export control AI agent "TRAFEED (formerly ZEROCK ExCHECK)" (worried.jp) addresses this record management challenge.

Classification and screening history is automatically recorded in the system. Who did what classification or screening on which product or counterparty, when, and what the result was — all of this is centrally managed and can be retrieved immediately during an inspection.

Because the system can output reports showing the classification basis and supporting reference information, the risk of receiving a finding for "unclear basis for non-controlled classification" is reduced. Periodic counterparty screening records also serve as evidence that Foreign User List cross-referencing is being conducted regularly.

When regulatory changes occur, the system is updated within two weeks, reducing the risk of "missing a regulatory amendment."

Summary

A METI on-site inspection is nothing to fear if you prepare appropriately.

The purpose of the inspection is not punishment — it is to promote self-managed compliance by companies. The core of preparation is documentation. Without records of what you're doing, an inspector cannot distinguish that from not doing it at all.

Common findings follow predictable patterns: a CP that has become a formality, classification records lacking their basis, missing training records, and audits never conducted. Addressing these four areas in advance makes inspection handling dramatically easier.

And the real work comes after the inspection. Receive a finding, implement an improvement, and retain a record of it. That process itself is the best preparation for the next inspection.

For those struggling with inspection preparation or day-to-day record management in export control operations, please visit TRAFEED (formerly ZEROCK ExCHECK) (worried.jp). We recommend starting with screening your existing counterparties and building up your records from there.