Japan may implement the following types of sanctions under the current legislation.

Financial Sanctions

Financial sanctions include restrictions on the making and receipt of payments; the execution, change and termination of transactions on deposits, trusts and loans; outward and inward investments; and the issuing, obtaining and transferring of securities.

Under the sanctions regime, modes of payment include settlements by set-off and payments in substitution.

Under Japanese law, there is no measure expressly called an “asset freeze”, but in practice, restrictions regarding payments and transactions on deposits, trusts and loans are referred to as “asset freeze” measures.

In particular, the making of payments and the conducting of transactions involving deposits, trusts and loans to designated individuals and entities associated with various countries, including North Korea, Russia, Belarus and Iran, as well as terrorist organisations, have been restricted. Restrictions on the receipt of payments apply only in limited cases as of 20 June 2025.

Investment bans apply to inward investments by Iranian persons in a Japanese company in the industry of nuclear technology, and outward investments by Japanese residents in a Russia-related company. The scope of outward investments in a Russia-related company under the sanctions regime includes the acquiring of a share of 10% or more of a non-resident (a Russian or non-Russian company) in relation to a Russian business, the increasing of the share of a non-resident of which it already holds 10% or more in relation to a Russian business, and the provision of a long-term loan to a non-resident of which it holds a share of 10% or more in relation to Russian businesses.

As part of financial sanctions, financial institutions are obliged to check and make sure that payment operations will not violate the sanctions regulations under the Foreign Exchange and Foreign Trade Act (the “Foreign Exchange Act”). If the Ministry of Finance (MOF) finds that a bank does not fulfil this obligation or might fail to, it is entitled to order the bank to take appropriate actions.

Trade Sanctions

Typical trade sanctions include restrictions on the import and export of goods, intermediary trading, and the provision of technologies and certain services.

Trade sanctions are in place primarily in relation to North Korea and Russia as of 20 June 2025.

In the case of sanctions against Russia, price caps are set on Russian oil and oil products, and certain services in relation to the trading and production of oil are prohibited.

Restrictive Border Measures

Travel bans and entry bans of vessels and aircrafts are also possible.

As sanctions measures, Japan has blocked the entry of North Korean nationals, North Korean vessels and any vessels that have called at North Korean ports, and the entry of designated persons involved in or relating to Russia’s invasion of Ukraine.

General Principles

The key criteria for determining the application of Japanese sanctions are Japanese residency and links with Japan. The current sanctions legislation does not adopt extraterritorial application.

Under the Foreign Exchange Act, which regulates financial and trade sanctions, a Japanese resident is defined as a natural person with a domicile or residence in Japan or a corporation whose principal office is in Japan. A branch office, local office, or other such office of a non-resident in Japan is deemed to be a Japanese resident, even if the non-resident’s principal office is located in a foreign state.

Financial Sanctions

Generally, financial sanctions apply to a Japanese resident.

Restrictions on payments apply also to a designated non-resident when payments are made from Japan.

Trade Sanctions

Export or import bans apply to those who export goods from or import goods into Japan, irrespective of their residency.

As for the provision of technologies, everyone must comply with sanctions when providing technologies from Japan. In addition, all Japanese residents must comply with sanctions when providing technologies to a non-resident or a Japanese resident connected with a designated country.

Restrictions on the provision of services apply to Japanese residents.

Japanese sanctions may be imposed either to comply with international obligations – for example, resolutions adopted by the United Nations (eg, in relation to North Korea, Iran, the Democratic Republic of Congo, Somalia, Yemen and other countries) – or to co-operate with other countries or international communities (eg, in relation to Russia and Syria) or maintain the peace and security of Japan (eg, in relation to North Korea).

The MOF implements and enforces primarily financial sanctions, but also restrictions on the provision of some services, while METI implements and enforces primarily trade sanctions, but also some financial sanctions.

Criminal Offence

For violations of financial and trade sanctions, criminal liabilities may be imposed. For violations of export or import restrictions, the potential penalties to an individual offender are imprisonment for up to five years or a fine of up to JPY10 million (but no more than five times the value of a transaction violating the sanctions), or both. In addition, a company for which the offender works may also be subject to a fine of up to JPY500 million, but no more than five times the value of a transaction in breach of the sanctions.

Administrative Liabilities

For violations of export or import restrictions, METI may ban exports or imports for up to three years or prohibit an individual offender from engaging in the activities of a company in a specified business as a director or an officer for up to three years.

Generally, authorities make public only a small number of administrative enforcement actions each year, primarily related to violations of export or import bans.

In May 2025, METI announced an administrative penalty in connection with the unauthorised export of motorcycles and other goods to Russia via South Korea. This was prosecuted as a criminal case, as outlined in 2.2.4 Criminal Enforcement Action. As an administrative penalty, METI imposed a one-year ban on the Japanese company and its CEO, prohibiting them from exporting the sanctioned goods to any region.

In March 2024, METI issued a warning to an individual who had imported alcohol originating in North Korea via a hand carry-on in breach of sanctions in 2019, requesting compliance with import regulations.

By June 2025, several criminal enforcement actions related to sanctions had been made publicly available in 2024 and 2025, while none were disclosed in 2022 or 2023.

In April 2025, the former CEO of a Japanese marine products import company received a one-and-a-half year prison sentence, suspended for three years, for the unauthorised import of seafood from North Korea. As part of the company’s operations, he imported 18,000 kg of clams originating in North Korea, with a declared value of JPY3.4 million, from a port in South Korea in January 2020. He falsely declared to customs that the clams were of Russian origin, using a forged certificate of origin. He did not contest the charge. The company was not prosecuted.

In October 2024, a Japanese trading company was fined JPY5 million, and its Russian national CEO received a three-year prison sentence (with a four-year suspension), for the unauthorised export of motorcycles and other goods (valued at JPY42 million) to Russia via South Korea during a period ending in January 2023. The defendants did not contest the charge. This case was the first criminal conviction for a violation of sanctions against Russia.

In March 2025, it was reported that a Japanese used car dealership and two employees of an affiliated company were referred for prosecution on charges of unauthorised exports to Russia, with the employees pleading guilty. The investigation is ongoing into the foreign beneficial owner of the dealership, who departed Japan in June 2023 following a site inspection. According to the reports, the dealership exported four luxury cars, with a total value of JPY85 million, to Russia between December 2022 and January 2023 without obtaining the necessary approval. The dealership declared to customs that the cars were being exported to a company in South Korea; however, they were ultimately transported to Vladivostok, Russia, via South Korea.

No legislative provision or official guidance clarifies any mitigating steps in the case of a breach of sanctions. However, self-reviewing, self-reporting and the establishment of preventive measures may be taken into account when the competent authorities determine penalties.

The competent authorities have discretion in determining penalties and can take into account whether the breaching party had knowledge or should have had knowledge that it was in breach of sanctions. Depending on the situation or the seriousness of the consequences resulting from a breach of sanctions, the authorities may choose not to impose penalties, opting instead to issue an administrative directive or merely a warning without any formal punishment.

In the case of criminal liability, knowledge is essential in establishing responsibility for a breach of sanctions. In 2018, the court found a Japanese trading company and its employee in the company’s export division innocent in a criminal case where fabrics were, several times, exported to a northern port of China from Japan under contracts between the Japanese trading company and a Chinese company, the final destination of the fabrics being North Korea. The main argument centred on whether the employee was aware that the fabrics would be ultimately delivered to North Korea. It was concluded that the employee was not aware and was therefore found not guilty.

Japanese Sanctions Measures

Japanese sanctions are implemented not by way of prohibiting certain actions or transactions, but by way of requiring the approval or permission of the competent authorities to conduct certain actions or transactions for which permission is, as a rule, not normally granted.

In exceptional cases, the competent authorities may set exemptions or grant an approval or permission. No provision of legislation clearly states on which grounds the competent authorities may do so.

Financial Sanctions

The MOF exempts, on humanitarian grounds, payments to individuals in North Korea from the requirement to obtain permission.

In the case of sanctions on investment in Russia, exemptions have not been established, but there is the possibility of the MOF granting permission if a Japanese company were to make additional investments in its Russian subsidiary for the sole purpose of maintaining the Russian operation or of exiting from the Russian market, which would otherwise violate financial sanctions.

Trade Sanctions

METI has issued a general guideline on the operation of general export controls, which sets out when METI can or cannot grant approvals.

METI has also issued a guideline on the potential granting of approval in relation to the Russia-related export ban. For example, METI may consider approving exports when goods are exported to a Russian company wholly owned by a Japanese company, or companies with US, European or South Korean owners. It should be noted that METI cannot otherwise grant approvals in such cases, and doing so will depend on the situation.

In the case of sanctions against Russia, the provision of some services, such as auditing and engineering services, to a Russian company is exempted from permission when the services are rendered to a Russian subsidiary of a Japanese resident.

From the perspective of the sanctions regime, it may technically be possible to prohibit the provision of legal services, but no such direct prohibition is in place in relation to any country as of 20 June 2025.

However, if legal services fall under the category of management consulting services, which are prohibited from being provided to Russian entities (except when providing said services to a subsidiary of a Japanese resident entity), the provision of such legal services may be subject to sanctions.

There is no direct provision prohibiting the circumvention of sanctions.

However, the authorities pay close attention to these matters, particularly in relation to the present sanctions against Russia. Thus, the authorities have issued a warning that an export to a third country or third party intending to deliver goods to Russia can constitute a breach of sanctions. Careful consideration is required when exporting goods from Japan to a third party located in a third country that manufactures products using goods from Japan and then exports such products to Russia. Depending on the situation, the export of goods from Japan to a third country can be regarded as an export to Russia and can thus be in breach of the sanctions.

In addition, to prevent the circumvention of sanctions, certain non-Russian entities (for example, entities in China, India, the UAE, Uzbekistan and other countries) have been designated as subject to export bans or financial sanctions.

The circumvention of sanctions may be regarded as a breach of sanctions, which opens the door to criminal liability for the circumventing entity and related persons.

The potential penalties to an individual offender are imprisonment for up to five years or a fine of up to JPY10 million (but no more than five times the value of the transaction violating the sanctions), or both. In addition, a company for which the individual offender works may also be subject to a fine of up to JPY500 million, but no more than five times the value of the transaction in breach of the sanctions.

In fact, criminal cases regarding sanctions primarily involve the circumvention of sanctions, as outlined in 2.2.4 Criminal Enforcement Action. In addition to these, the following cases can be found in publicly available legal sources.

• In 2016, a Japanese company was sentenced to a fine of JPY3 million, and an employee thereof received a two-and-a-half-year sentence with a four-year suspended sentence in a case where the export of 7,700 kitchen and daily items in total (valued at around JPY12 million) to Singapore was judged to be a de facto export to North Korea. The employee’s customs declaration stated that the final destination was Singapore, but instead the employee had the items delivered to North Korea with the assistance of a North Korea-related person.
• In 2010, a Japanese company imported agricultural products originating from North Korea (valued at JPY7.6 million) through China, falsely declaring that the products originated in China. In 2015, the company was sentenced to a fine of JPY2 million, while its representative director and an employee were sentenced to two years in prison and one year and eight months in prison, respectively, with a four-year suspension of execution.
• In 2011, the courts handed down a one-and-a-half-year sentence of imprisonment, served as a four-year suspended sentence, to an individual who exported three cars (valued at JPY7 million) to South Korea under cover of a fraudulent company, and where said export was determined to be a de facto export to North Korea. The individual insisted that they were not aware of any breach of sanctions since they thought that the delivery to a foreign embassy in North Korea was not prohibited. They claimed that they had been asked to deliver the cars only to South Korea, understanding that such delivery was not a breach of sanctions. The court’s conclusion was that the individual was aware of the illegality and had no good reason to believe that their actions were not in breach of the prevailing sanctions. The court also stated that, taking into account the fact, among others, that the individual did not consult with lawyers or specialists on the nature of the prevailing sanctions, it was doubtful that the individual would have not been aware of the illegality of their actions.