Created: 12/1/1983

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Controlling Technology Leakage to the USSRH


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a major shirt in policy. Japan has taken well-publicized steps to limitand Fast European access to advanced technologies andcries of events over the pastrevclalions by former KGB Major Levchenko of Soviet espionage activities in Japan and Ihc KALeceptive environmenlie new measures. Equally important has been the backing of Prime Minister Nakasone. hose emphasis on ji greater international role for Japan hu* encouraged Japanese participation in the general Western crackdown on technology leakage.

and ibe Foreign Ministry has laken ihe lead. The Ministry of International Trade and Industry, whose support is essential, waseluctant participant, but. over the past several months, il has become increasingly involved. Tokyo's tough line has taken several forms;

Two Soviets were expelled for industrial espionage in June.

The Foreign Ministry has tightened restrictions on entrance visas and travel for Soviet and feast European scientific and commercial delegations.

M1TI has laken llie first step toward limiting unauthorized reexport* of technology by requiring end-user certificates.

Japanese Coordinating Committee (COCOM) delegations have been more cooperative during COCOM list reviewnd MITI hasreater willingness lo limit exports of COCOM-controlled and some iKmembargocd goods.

The security services have stepped up effortsdentify illicit Soviet activities and io work with export conirol agencies io interdict illegal shipments.

Most large corporations ore abiding by the government's stricter policy on export controls, and many have canceled sales and technical exchanges. The firms and MITI their major spokesman in the government -arelose waich on Allied performance, however. Tokyo will find it difficult lo carry on Ihc policy if firms perceive thai Ihc new controls have damaged Japanese competitiveness in world markets

the past year Tokyo hat moved to curb illegal acquisition of Western icchmilogy by the Soviet Union and East European conntriei;

officials have been expelled for trying to acquire icchrvokej illegally.

The Foreign Ministry has placed tighteron Soviet visitors to Japan

Tokyo has increased manpower and funds forof export controls

Coordination among all agencies concerned with export control has been substantially improved, and Tokyo is reviewing export license applications more

Tokyo's Motl.cs

Although illegal technology transfers will probablyJapanese ate second only to West Germanyource of high technology for theenforcement measuresra-ma tic shift in policy. This new campaign is largely the result of concern among Japanese bureaucrats thai crackdowns now under way in the United Stales and Western Europe wouldapan open tocritieisin lhat it was not doing its pan. Furthermore, reliable sources report thai government officials fear failure io follow ihe US and Wesi European examples would affect broader iclaiionn with Washington.!

Less Interest ia Soiiei Bust nets

Japan 'i efforts to curbots comeime when Tokyo has shown diminishing interest ininvolvement in the Soviet economy, partly because recession and structural changes tn ihe economy have reducedaw material and energyJapanese businessmen have shown littlein new Siberian resourceajor component of Jopanese-Sonet trade and technology sale' |

The new measures to retina kifk-iethnoJory sales are unlikely lo damage Japanese export tradeTrade wiih the Smiei Union is growing but is Still relatively unimportant lo ihe Japanese economy, accounting for onlyercent of the value of Japan's total foreign trade2J. The Soviet share in any wen year has neverercent.2 the total trade between the two countries rose byercent In yen termsercent in US dollars, toillion. This overall growth was not maintainedS, when Imports rose slightly while exports declined fj

greater concern than their predecessors over security issues, and Ihey have been receptive to IIS approaches detailing the strategic implications of unregulated technology transfer lo tbe LSSKH

The revelations of former KGB Maj. Stanislav Lev-chenko in April concerning Soviet spying in Japan and the expulsion of iwo Soviets in June for industrial espionage have added impetus to ihe crackdown. The Foreign Minislry was able to use ihe Levchcnko disclosurespringboardublicity campaign aimed at increasing public awareness of the strategic significance of technology sales to the Soviets, the extcnl and effectiveness of theollection effort in Japan, and the implications for Japan's national security. Press briefings by the Minislry were designed to convince Japanese traders,and colleges to exercise greater care in inviting Soviet visitors to view advanced production orfacilities. In leaks lo the media, directed both at an initially skeptical publicusinessreluctant to curb trade, the Ministry noted that Tokyo's efforts to check technology loss were in accord with established international commitments and that Japan was acting in concert wiih its Western allies. Ninon Keizal, among others, billed Tokyo's new measures as efforts to enhance the effectiveness of COCOr

llic expulsion of two Soviet diplomats in Juneandmark in the Foreign Ministry's attempts tobureaucratic opposition lo tighter controls. Thefirst inhock to officials in the Ministry of International Trade and Industryhe Ministry had noi been notified of the police investigation of the two Soviets, which was conducted in close cooperation with the Foreign Ministry's Sovici Division.)



The Foreignits Soviet Division inthe most active proponent of the new policy on high-technology exports. It has usedUS demarches to elevate the technology loss issuerade matter strictly in the hands of MITIroader foreign policy concern in which it canconsiderably more influcnc

The Foreign Ministry made the first move inhen it began to crack down on visas for Soviet science and technology delegations. As oft had denied at least IS visas because of the possibility of technology loss.ublic address covered widely in the press, Foreign Minister Abe in3 reaffirmed Tokyo's commitment to reducing theflow of technology and equipment to the USSR and Eastern Europe. Using ihe bluniesi publicyet on the issue, he acknowledged Ihelhal Western technology has made to Soviet military programs. Although not mentioning specific actions that Tokyo should take. Abe reaffirmedobligationember of the free world lo institute lighter controls

The Foreign Ministry's ability to control technology leakage rests wiih ils almost complete authority over visas and iravel itineraries for foreign delegations. By reslncting visas and travel, the Ministry has been able

The Visa Squeeze

The Foreign Ministry has almost complete autonomy over visas and travel itineraries for foreignvisiting Japan

' The Minislry is not required by law toeason forisa.

Granting visasiscretionary power given to the Foreign Minister and cannot be challenged in the Japanese courts. The latitude afforded the Ministry in its reasons for denial allows it to broaden control over Soviet access to technologies not available for export or to dual-use items considered sensitive by ihe Uniled States or other Allies but noi controlled by COCOM or contained on Japan's export control order

he Minislry deniedisas to Soviet visitors. Includinghat used the possibility of technology losses to the USSR at ihe principal reason

for denial. During the first four monthshe Minlsiry denied nine visa requests, two specifically

for activities related toollection:

Six Soviets were denied tnlry to Ishikawalimaajor industrial firm, because thebelieved thai they might try to collecton an oil drilling rig ihe firm is building for the Uniled Stales

In the few instances inenial has been appealedigher level in the government, the Ministry has generallytrong stance in defending lis decision. When pressure from political authorities Is brought inio play- in most casesthe firm argues that the action will resultignificant loss ofMinislry has been able to workompromise under which the visit Is allowed, bui ihe Soviets' travel itinerary or access io specific technologies is severely restricted. I

show some immediate progress in limitingloss. The Foreign Ministryo responsible Tor formulating and presenting Japan's COCOM policy, but it usually does not become involved in COCOM implementation or trade administration mailers.esult, it cannot, on its own. restrict exports by adding new categories of technologies and equipment to Japan's export control order. Instead, it must depend on cooperation from MITI, which is responsible for denying export licenses and recommending tobusiness that care be taken in export af sensitive tcchnologi


The Miimtrr has supplemented its informal guidancetepped-up disapproval rate for exports of *tvxific technologies or cquipiricni- al

action has included:

Spearheading the creationorking-levelcommission comprising MITI. the Ministry of Financehe National Police Agency, and ihe Ministry of Foreign Affairs to supervise strengthening of export controls and developing effective ways to limit the reexport of controlled technologies from thitd countries to ihc USSR

Expanding its COCOM-related staff from eight to ninerojected increase ton additional ISO employees from other sections in MITI periodically arc drawn into COCOM affairs.

Increasing its COCOM-related budget by nearlyercent by4 Japanese fiscal year.

ew irade policy planning section in the export division to handle some COCOM policy matters previously administered solely by theMinistry.

Reviewing all SAT exchange and cooperation agreements with the Soviet State Committee for Science and Technology and other Sovietto ensure they do noi include potential COCOM violations or unauthorized transfers of technology jjjffl

MITI remains reluctant, however, to issue extensive formal administrative guidance on the export oftechnology items not covered by existing COCOM regulations (see thet prefers lo counsel Japanese firms informally on ihe advisability

MITI's cooperation is essential to Tokyo's effort to deny the Soviets access to high technology because the Ministry is responsible for the implementation, coordination, and enforcement of Japanese iradeand export controls. It is the sole authority issuing export licenses, including approvals for COCOM-conlrolled goods. It is also Tokyo's principal channel for guidance to the business community on the technology transfer or any other trade-related issues |

The Security Services

The National Police Agency and the Public Security Investigation Agency are not directly involved in formulating or implementing export controls, bul Ihey haveey support role. Both services have expanded their operations against the Sovieis and have publicized their findings through appropriate channels in the government and media. The National Police have worked closely with the Foreign Ministry in support or the visa denial program by identifying possible intelligence officers and unauthorizedof sensitive technology. j

Tbe Public Security Investigation Agency has also expanded its coverage of the technology loss issue maintaining extensive Hies on the activities andof Soviet visitors. It does not enjoy aseking rclaiionship with the Foreign Ministry as do the police but has nonetheless taken steps to publicize

ffon& and demonstraje its competence in address-tcchnology leakage.

The MtMstryofRnaixc

The Finance Ministry playsangential role in adminisirating export controls. Its chief innuence lies in its customs authority, through which it canajor part in identifying and interdicting illegal shipments of high-technology goods. In response to Foreign Ministry disclosures in September thattrade delegations bad purchased high-technology equipment for the Soviets, the Finance Ministry hasreater willingness to support Customs Service scores of shipments containing restricted as well as 0Iher scnsiiivc technologies bound for Cuba and Soviet Bloc destinations

Business Plays Along In response to the government program, most major trading firms and manufacturers have curtailed some sales of high-icchnology items lo the USSR and have reduced the number and visibility of exchanges and cooperation agreements with the Soviets:

Several Japanese electronics manufacturers have refused to provide ihe Soviets with video tape recorder technology.

iiness leaders have consistently supporied the new restrictions, in part to avoid provoking even stronger measures and closer MITI supervision. Oili. is_havcc-cr. fully cooperative.

Japanese busine*mcn are still trying hard to promote sates of nonstrategic technology and equipmeni to the USSR ^Businessmen are alsolose watch on

and Allied performance under both established COCOM regulations and new unilateral controls and are careful to maintain parity with them:

Some firms continue to complain of bias in ireai-ment of Japanese COCOM cases. In one instance, Japanese companies protested afier the United Slatesritish compuier sale lo the USSR ihai ihev believed would noi have been allowed had ii been Japanese.


Japan's flexibility was particularly evident during negotiationsmbargo sates of electronics-grade silicon. The Japanese initially found ihc US proposalota] embargo unacceptable because they feared losing millions of dollars in sales. They agreedompromise, however, in which Japan accepted the US position on silicon sales to the USSR as long as it could recoup some of Ihe lost sales in ihc Chinese market |

Reaction I'roin Moscow

inndcately to the nc* measures. Soviet protests against ihc expulsions or the two officials were mild-suggesting no reprisals of any significance unless Tokyo continued lo publicize the case. Although Moscow is clearly irritated by ihe Foreign Ministry's visa controls, it has not allowed the matter to escalateisa war. To date, the Soviets have refused only one low-level Japanese official's entry into ihe USSR. Moscow has continued to stress the need for improved relations but has also continued to criticize sharply Japan's stand on foreign policy and defense issues.

We do not expect Moscow to cui back ils overall efforts to acquire high technology, and it probably will continue Irving to persuade Japaneseespecially those specializing in Irade with thecircumvent ihc COCOM restrictions. There is some evidence, however, thai the USSR has recentlyess aggressive stance in its tempts to recruit agents for SfiT collection.

MITI Itraining program for il< export control officeraew trade administration office to process COCOM cases- It atso will require firms lo appoint an official to take charge of the security aspects of high techrsoaogy. Umit the number of employees handling sensitive information, anda detailed plan for coordinating controlwith government

During the current round of COCOM negotiations, wc believe Tokyo will be receptive toonitoring system for emerging technology ofmilitary significance Several Japanese officials have indica led, however, thai Tokyo probably will noi agreeS proposal for adding equipment and technology related lo the oil and gas industry to Ihe COCOM lists. Japan views the proposal us covering too many ivonstratejjicjtems and potent mlly hindering legitimate i


The intensity with which the new measures will be pursued over ihe long term is urscertain Tokyo does not view the security threat posed by technology transfer to the USSR with the same urgencylates doesl-

To the degree thai the Japanese perception of the Soviet threat increases, however in particular,awareness ofeployment in Asia andmilitary buildup on the Northernresolve to limit technology leakage to the USSR will wengiben Prime Minister Saka-sone's role at as advocate for the new measures will continue, bul hit influence may be diminished as he devotes more aitcntion to domestic issues in the wake of the ruling party's sclback^nthc3 lower house elcctionvM

For now. the Foreign Ministry remains ihe most committed to the new program, but even Mill believe* ii politically expedient to support tighter oViirol* These and other relevant ministries have cwercorne bureaucratic difTereiycea lo csubtish an institutional framework capable of enhancing Tokyo's ability in enforce stricter export controls Continued emphasis on the importance of technology transfer issues during US-Japanese consultation* will help keep the new program on course, as will both in international climate that supports stricter export controls and the perception that Allied enforcement is being applied equitably |

MITI is the ministry most likely to challenge and even break with the tighter controls. The Ministry look action only after it had seen Ihe Foreign Ministry Ihreatening to diminish its authority over export control policy. Despite the measures it has taken, MITI disagrees with the Foreign Ministry on the extentri controls. MITI is charged with supporting Japanese business worldwide, including tbe So-net Union, and according lo severalin the Minislry, its leaders believe that loo many restrictions adopted loo quickly would hampertrade. I

Uncertainties will persist in evaluating the cffcctive-ncss of Ihc new measures because of the inherent difficulties in identifying and tabulating illegal tech-no'of) transfers. There will be indicators, however, of Tokyo's commiimcniontinued enforcement of established controls and of an rsraiidcd effort. Including

A greater willingness to restrict eiports of sensitive technologies not currently embargoed by COCOM, particularly in the areas of microelectronicsand testing, advanced telecommunications,manufacturing, and oil and

Sirictcr controls on reexports of sensitive anditems through third countries.

Increased willingness of Japanese firms to deny ad hoc Soviet request* io view restricted facilities and obtain technical data and specifications during plant tours and contract negotiations.

igh public profile by publicizing Soviel collection efforts, strategic implications of cetiain technology exports, and seizures of illegal shipments.

' Impeoved means of identifying and peevcoting ei-ports lo cad users engaged in military prcdisclion

| Continued or growing reluctance of firms with records of illegal sales to entertain new requests for illegalK"ii-J


Japan are rcguUied b>criarallel, .he lis, ofseiecedT

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