Sanctions 2025
Japan
Authors
Anderson Mori & Tomotsune is a full-service law firm with around 700 professionals that is best known for serving overseas companies doing business in Japan since the early 1950s. It is proud of its long tradition of serving the international business and legal communities, and of its reputation as one of the largest full-service law firms in Japan. The firm’s economic securities and international trade practice group consists of approximately 50 lawyers and provides advice in the areas of sanctions, international trade law and economic securities. The firm’s strength lies in its team of specialists who are well-versed in the practicalities of various countries, including Japan, Russia, CIS, the United States, and China. The firm’s main office in Tokyo is supported by offices in Osaka, Nagoya, Beijing, Shanghai, Singapore, Ho Chi Minh City, Bangkok, Jakarta, Hong Kong, London, Hanoi and Brussels.
1. Trends and Overview
1.1 Sanctions Market
No significant change in the sanctions sector has been observed compared to 12 months ago.
Over the last 12 months, the list of designated individuals and entities subject to financial sanctions has been expanded several times, targeting Russia for its continuing invasion of Ukraine, though less frequently than before. As for North Korea, the total ban on imports and exports originally implemented in 2006 and 2009, respectively, was extended once again for an additional two years in April 2025.
1.2 Key Trends
The key trend regarding the sanctions regime remains the close attention paid by the Japanese authorities to any efforts made to evade the sanctions imposed on Russia.
Particularly, the authorities have been concerned about illegal exports from Japan to Russia through a third country or third party. In the fall of 2023, the authorities officially emphasised that such exports can constitute breaches of sanctions, and encouraged businesses to analyse parties involved in their transactions, and for their transaction schemes to be carefully scrutinised before being entered into. If goods exported to a third country are unintentionally supplied to Russia, such due diligence measures may release the exporter from liabilities for illegal export thereto. Further, in December 2024, the Ministry of Economy, Trade and Industry (METI) uploaded on its website an explanatory document, and an explanatory video therefor, which contained warnings against illegal exports via third countries and red flags for transactions evading sanctions.
To prevent illegal exports to Russia via third countries or third parties, since 2024 Japan has been designating certain non-Russian entities (companies in the UAE, Turkey, Syria, Armenia, China, India, Thailand, Kazakhstan, Kyrgyz Republic and Uzbekistan) subject to export bans. Japan also designated certain shipping companies, including Cyprus-based entities, subject to restrictions on payments, which indirectly makes it impermissible for a Japanese resident to purchase their transportation services.
1.3 Key Industries
Since the spring of 2022, Japan has been intensifying its sanctions against Russia, which has affected Russia-related business conducted by Japanese companies – particularly those manufacturers that had operations in Russia or exported products to the Russian market.
1.4 Overview
1.4.1 Types of Sanctions
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 of Russian oil and oil products 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.
1.4.2 Scope of Sanctions
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.
1.4.3 Domestic and/or Supranational Measures
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).
2. Overview of Regulatory Field
2.1 Primary Regulators
The primary regulators for Japanese sanctions activity are the Ministry of Foreign Affairs (MOFA), the MOF, and METI.
2.2 Enforcement
2.2.1 Enforcement Responsibilities
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.
2.2.2 Breaching 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.
2.2.3 Civil Enforcement Action
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.
2.2.4 Criminal Enforcement Action
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.
2.2.5 Mitigation
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.
2.2.6 “Strict Liability”
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.
2.3 Licensing
2.3.1 Derogation
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.
2.3.2 Provision of Legal Services
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.
2.4 Reporting
Under the sanctions regime, no legal obligation of reporting is created.
The MOF has issued a compliance guideline to financial institutions and payment operators, instructing them to report to the MOF when they detect a violation of financial sanctions.
From a practical point of view, those who have breached sanctions are recommended to report their breach to the competent authorities immediately.
3. Recent and Future Legal Developments
3.1 Significant Court Decisions or Legal Developments
The first criminal conviction in relation to sanctions against Russia was handed down in 2024; however, no other significant court decision or legal development has been observed over the past three years.
As a minor development, in 2022, sanctions legislation was amended twice to bring transactions involving cryptocurrency and electronic settlements under the scope of financial sanctions.
3.2 Future Developments
No pending court cases on sanctions, or cases with particular issues related to the sanctions regulations, have been published in publicly available legal sources.
4. Delisting Challenges
4.1 Process
General
Measures related to financial sanctions and trade sanctions are established by administrative orders in the form of public notices issued by the MOF and METI, respectively. However, a sanctions designation is made by administrative orders in the form of public notices issued by MOFA in relation to both financial sanctions and trade sanctions.
Technically, a sanctions designation as an administrative disposition may be challenged in two ways:
- by administrative review, which is a request made to MOFA for the review of a designation under the Administrative Complaint Review Act; and
- by judicial review, in the form of a motion to revoke the impugned designation, which is made under the Administrative Case Litigation Act.
In principle, a motion for revocation can be filed immediately without going through the process of administrative review. In the case of a sanctions designation set out under the Foreign Exchange Act, a person to whom a sanction applies may choose to file either a request for review or a motion to revoke.
No case challenging a sanctions designation has been identified in the published legal sources as of 20 June 2025.
Administrative Review of a Designation
With regard to a request for the review of a designation, a person who is dissatisfied with a sanctions designation may file a request with MOFA for the review of the impugned designation within three months from the day following that on which the person comes to know of the designation, but this must be done before one year has passed from the day following that on which the designation was made.
If, during the review procedure, a designation is determined to be illegal or unjust, it is revoked or altered retroactively.
Judicial Review of a Designation
With respect to a lawsuit for the revocation of a designation, the lawsuit must be filed within six months of the date on which the person became aware of the designation, but this must be done before a period of one year has elapsed from the date of the designation.
If a designation is found to be illegal, it is revoked retroactively.
4.2 Remedies
A revocation of a sanctions designation does not automatically grant a right in damages. A person who was designated as a sanctioned person may file a lawsuit against the state for damages under the State Redress Act. The illegality of an administrative disposition is determined under the State Redress Act separately, even if the disposition was judged to be illegal and revoked in the review procedure or the court proceedings. The illegality of a designation under the State Redress Act will be recognised only in the case where officials have made the designation in a careless manner without exercising the duty of care that the officials should normally exercise in the course of their duties.
4.3 Timing
Administrative Review of a Designation
As for administrative review, legislation encourages administrative agencies to determine and announce publicly the standard period necessary for the carrying out of a review; however, this recommendation has not been followed publicly by MOFA. Statistics related to the duration of an administrative review by all public agencies in 2019 show that 80% of all reviews were completed within one year.
Judicial Review of a Designation
As for a motion to revoke a sanctions designation, the duration of the proceeding will vary depending on the situation, but will likely require a couple of months at least.
5. Trade and Export Restrictions
5.1 Services
Sanctions on the provision of technologies and services are in place mainly in relation to North Korea and Russia.
- Sanctions against North Korea: Sanctions restrict the provision of financial services whose purpose is to contribute to the nuclear industry of North Korea.
- Sanctions against Russia: Japanese residents are prohibited from providing services, such as the settling of trusts, auditing, management consulting, civil engineering and construction, or plant engineering, to a Russian entity, except when being provided to a Russian subsidiary of a Japanese resident entity. Japanese residents are also prohibited from providing to a non-resident services such as maritime transportation, customs clearance, issuance of letters of credit or the provision of non-life insurance policies in connection with the purchase of Russian oil and oil products at prices exceeding the specified limit.
5.2 Goods
Bans on the export and import of goods are in place mainly in relation to North Korea and Russia.
Sanctions Against North Korea
No goods may be exported to North Korea from Japan, except where medicine, foods and other goods are donated to international organisations in North Korea, and where personal goods are exported for personal use.
No goods originating from or loaded within the borders of North Korea may be imported into Japan.
In addition, a Japanese resident is prohibited from selling, purchasing, lending, leasing or donating any goods originating from, loaded within the borders of or delivered to North Korea when such goods are transferred between destinations outside Japan (intermediary trading).
Sanctions Against Russia and Ukraine
Bans on exports to Russia apply to a wide range of goods, including high-tech goods, goods that can contribute to the strengthening of the Russian military and its industries and luxury goods. Exports to certain designated entities are banned for all goods.
As for imports, it is prohibited to import alcohol, wood and forestry equipment, gold and non-industrial diamonds originating from or loaded within the borders of Russia, and to import oil and oil products originating from Russia that are traded at prices exceeding the specified limit.
Intermediary trading is also prohibited for Russian oil and oil products that are traded at prices exceeding the specified limit.
With regard to conflict zones within Ukraine, no goods may be exported to such zones from Japan, and no goods originating from these zones may be imported to Japan.
6. Civil Litigation and Arbitration
6.1 Force Majeure
No civil litigation case has been reported in the publicly available legal sources regarding the performance of contractual obligations under the sanctions as of 20 June 2025.
6.2 Enforcement
No enforcement case has been reported in the publicly available legal sources where the enforcement of judgments or arbitration awards has been litigated in relation to the sanctions as of 20 June 2025.
7. Designation, Compliance and Circumvention
7.1 Executive Body
MOFA designates individuals or entities subject to restrictions on payments and transactions on deposits, trusts and loans, and to export bans.
7.2 Scope of Designation
The Foreign Exchange Act does not provide a general rule on the indirect designation of a person being owned or controlled by a directly designated person.
However, in the case of sanctions against Russia, MOFA has determined that it will apply restrictions on payments and transactions on deposits, trusts and loans to designated entities and their subsidiaries where 50% or more of the shareholding of such subsidiaries is held by designated Russian and Belarussian entities. In the case of export bans in relation to Russia, such a rule on indirect designation does not apply.
7.3 Circumvention
7.3.1 Prohibiting Provisions
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.
7.3.2 Criminal Penalties
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.
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Trends and Developments
Authors
Oh-Ebashi LPC & Partners is a leading full-service law firm with more than 170 attorneys. The main offices are in Tokyo and Osaka, and the firm was the first Japanese law firm to establish an office in China. Today, the firm operates across five locations, including the Nagoya office and the Jakarta desk. Its practice covers the full spectrum of areas, including corporate and M&A, risk management and compliance, intellectual property, export controls and sanctions, life sciences, restructuring and insolvency, competition and antitrust, consumer protection, finance and insurance, employment law, administrative and regulatory law, tax, and dispute resolution. In addition, the firm offers international practices with a strong focus on Asia, private client services, and pro bono work. With a long-standing client base, Oh-Ebashi LPC & Partners is committed to delivering top-tier legal advice and building enduring partnerships.
Introduction
Japan’s sanctions regime mainly comprises financial sanctions, trade sanctions and travel sanctions. For implementation of these measures – particularly financial and trade sanctions – Japan relies principally on the Foreign Exchange and Foreign Trade Act (FEFTA) rather than a standalone “Sanctions Act”. More precisely, the FEFTA supplies the core, transaction-based framework, and is complemented by several measure specific statutes, including the “Act on Special Measures Concerning Freezing of Assets Implemented by Japan in Light of the United Nations Security Council Resolution 1267”, “Act on Special Measures Concerning Cargo Inspections Conducted by the Government Taking into Consideration United Nations Security Council Resolution 1874” and “Act on Special Measures Concerning Prohibition of Entry of Specified Ships into Ports”. In addition, sanctions concerning the entry and exit of persons are implemented under statutes outside the FEFTA, notably the Immigration Control and Refugee Recognition Act. Together, these instruments form the basic legal infrastructure through which Japan operationalises sanctions.
Furthermore, while the FEFTA sets out the fundamental principles, the detailed operational provisions are established through Cabinet Orders, Ministerial Orders and Ministerial Notices. Accordingly, when confirming the specific procedures for implementation of sanctions, it is necessary to review not only the FEFTA but also the relevant Cabinet Orders, etc.
Under the FEFTA, sanctions are implemented through a comprehensive set of regulatory tools that govern, inter alia:
- financial sanctions:
- payments – restrictions on remittances and settlement of obligations; and
- capital transactions – permission requirements for loans and other cross-border capital transactions; and
- trade sanctions – approval/permission requirements for goods, services, and technology transfers.
At the basic level, the FEFTA adopts a “minimum necessary control” principle based on the foundation of free international transactions. Restrictions on transactions are imposed to the minimum extent necessary to control or co-ordinate foreign transactions to maintain peace and security in Japan and in the international community.
In the context of sanctions measures, the FEFTA regulations are applied when necessary to:
- fulfil Japan’s obligations under a treaty or any other international agreement that it has concluded (eg, United Nations Security Council (UNSC) obligations);
- contribute to international efforts towards international peace in concert with like-minded states (eg, the G7, the EU and the USA); or
- implement Cabinet decisions safeguarding national peace and security.
Legal and Institutional Framework
The chapters of the FEFTA relevant to sanctions include those governing payments, capital transactions, and trade. The FEFTA also applies to acts conducted outside Japan if they involve Japanese residents or agents/employees of Japanese companies acting in relation to their assets or business.
As for the institutional framework, three ministries – MOFA, MOF and METI – effectively co-operate in the domestic implementation of sanctions.
The Ministry of Foreign Affairs (MOFA) designates individuals and entities subject to sanctions, while actual enforcement measures are carried out by the Ministry of Finance (MOF) and the Ministry of Economy, Trade and Industry (METI). The consolidated list of individuals and entities subject to sanctions is available on MOF’s website. MOF is primarily responsible for financial sanctions – ie, asset freezes, payment restrictions, other capital market measures, and restrictions on certain transactions for services between a resident and non-resident, whereas principally oversees trade sanctions on goods and technology as well as a part of payment and capital transactions – eg, directly associated with import/export transactions, and transactions concerning the transfer or establishment of rights to use mining rights and industrial property rights. To facilitate smooth implementation, both MOF and METI publish guidance materials for financial institutions and companies.
Japan’s Unique Characteristics in Sanctions Policy
Single statute implementation of multiple measures
Japan’s sanctions regime is distinctive because it consolidates control over payments, capital transactions, and trade in goods, services and technology within a single statute – the FEFTA. This structure enables Japan to apply sanctions measures to specific transaction types more consistently and efficiently. Authorities can freeze or restrict payments, approve or halt capital transactions, and ban trade in goods, services and technology – all under one coherent legal framework.
By contrast, the USA provides separate statutes such as the International Emergency Economic Powers Act (IEEPA) and Trading with the Enemy Act, operationalised primarily through the Office of Foreign Assets Control (OFAC). US sanctions are often implemented via executive orders and regulations targeting specific sectors or actors.
The EU adopts Council Decisions and Regulations on sanctions under the Common Foreign and Security Policy (CFSP). These measures are directly applicable across member states but require national implementation legislation for penalties.
Multi-track approaches beyond UNSC resolutions
Japan’s sanctions framework is not limited to implementing UNSC resolutions. It also provides flexibility to adopt measures under coalition-based commitments among like-minded states and to impose autonomous sanctions. This adaptability enables Japan to participate in, for instance, G7-led initiatives, such as the co-ordinated price cap on Russian crude oil and petroleum products. These measures are enforced through the FEFTA’s permission/approval requirements and payment restrictions, ensuring that Japan can operationalise coalition-based commitments within its domestic legal system.
UNSC-based sanctions implemented by Japan
As of January 2026, the following Japanese sanctions to implement UNSC resolutions are currently in place: Taliban (2001), Terrorists (UNSC Resolution 1373 framework, 2001), Iraq (former regime, 2003), Democratic Republic of the Congo (2005), Sudan (2006), North Korea (initial measures in 2006; expanded in 2009 and onward), Somalia (2010), Libya (Gaddafi regime, 2011), Central African Republic (2014), Yemen (2014), South Sudan (2015), Iran (reactivated in 2025 through the UNSC “snap-back” mechanism), Mali (2020), and Haiti (2022).
Japan’s coalition-based and autonomous sanctions
In addition to implementing UNSC resolutions, Japan exercises flexibility to adopt sanctions under coalition agreements with like-minded states such as the EU and the USA, and to impose autonomous measures. Key examples of coalition-based sanctions include those in respect of former Yugoslav President Slobodan Milošević and related persons (2001), North Korea (2009 and 2013), former Syrian President Al Asad and related persons (2011), the Crimea Annexation/Eastern Ukraine destabilisation (2014), Russia (2022), Belarus (2022), and Israeli settlers (2024). Japan also enforces autonomous measures, notably comprehensive import and export bans against North Korea (2006 and 2009).
Enforcement Mechanisms
Permission and approval mechanism under the FEFTA
Payments
Any payment subject to sanctions measures requires prior permission mainly from the Minister for Finance. In practice, Japanese banks must verify the purpose of the transaction, review counterparties and beneficial owners, and request supporting documentation to ensure compliance with payment regulations, including those under the FEFTA.
Capital transactions
Activities such as deposits, trusts, loans, and the issuance or acquisition of securities that fall under sanction measures mainly require permission from the Minister for Finance before execution.
Trade ban
The import or export of goods or technology subject to sanction measures require prior approval from the Minister for Economy, Trade and Industry, while the export of services from a resident to non-resident subject to sanction measures requires prior permission from the Minister for Finance.
Supervisions and inspections
Payment transactions
MOF has issued the Guidelines on Compliance with the FEFTA for Foreign Exchange Dealers, which set out its interpretation and expectations under the FEFTA. These guidelines require foreign exchange dealers (including banks) to establish robust internal compliance systems to ensure adherence to the FEFTA obligations. In practice, MOF may receive reports of suspicious transactions from banks operating under these compliance frameworks.
Trade
Customs inquiries/inspections under the Customs Act often serve as the starting point for investigations into potential violations of sanctions measures. These inquiries/inspections can trigger further inquiries into prohibited exports or imports.
In addition to the above, Japanese parties involved in transactions may voluntarily notify authorities of activities that could fall under sanctions, supporting proactive compliance and enforcement.
Enforcement
Administrative measures
Authorities may impose the following administrative actions for violations of sanction measures:
- order to suspend service transactions – an administrative order prohibiting the conduct of service transactions for a period of up to one year;
- order to suspend import/export of goods – an administrative order prohibiting the import or export of goods for a period of up to one year (or up to three years in cases involving violations of Japan’s autonomous sanctions measures imposed by Cabinet decision);
- order to prohibit assuming an executive position – an administrative order prohibiting a violator from assuming any executive position (such as representative, director, executive officer) in the relevant company for the same period of the above suspension;
- formal warnings – written warnings to companies or individuals for non-compliance; and/or
- publication of enforcement actions – disclosure of the names of violators to deter future violations.
Criminal penalties
In addition to the administrative sanctions, violations of sanctions measures under the FEFTA may result in criminal consequences.
Financial transactions (payments and capital transactions) and transactions for services
Engaging in these transactions without the required permission may lead to:
- imprisonment for up to three years; and/or
- a fine of up to JPY1 million.
If three times the value of the transaction exceeds JPY1 million, the maximum fine increases to three times the transaction value.
Trade in goods and technology (imports/exports)
Conducting import or export transactions without approval may result in:
- imprisonment for up to five years; and/or
- a fine of up to JPY10 million.
If five times the value of the transaction exceeds JPY10 million, the maximum fine increases to five times the transaction value.
Case Studies: Russia, North Korea and Iran
Russia: multi-channel controls and anti-circumvention
In response to Russia’s invasion of Ukraine, Japan has repeatedly expanded sanctions measures under the FEFTA in co-ordination with the G7, the EU and the USA, including asset freezes, payment restrictions, restrictions on outward investment in a Russia-related company, trade (import/export) restrictions and market prohibitions (such as restrictions on issuance by specified sovereign and quasi-sovereign actors). MOFA has frequently updated its consolidated sanction lists since 2022.
In December 2022, Japan implemented the G7 price cap on Russian crude oil and petroleum products, prohibiting maritime services and payments above the cap. This measure was operationalised through the FEFTA’s payment permission regime and co-ordinated METI/MOF Notices. On 12 September 2025, Japan lowered the price cap from USD60 per barrel to USD47.6 per barrel.
METI provides detailed guidance on its Russia sanctions page, including G7/GECC materials enumerating “Common High-Priority Items” which are prohibited from export. METI has also published resources highlighting the risks of evading sanctions and the need for countermeasures, including red flags and case studies of circumvention through third-country exports.
Japan also imposes similar sanctions on Belarus, and imposes trade restrictions on goods originating in Ukraine (limited to those originating in the Autonomous Republic of Crimea or the city of Sevastopol since 2014 as well as in the self-proclaimed Donetsk People’s Republic or the Luhansk People’s Republic since 2022) aligned with coalition-based measures.
Recent enforcement examples
On 16 December 2025, METI issued a formal warning to Red Baron Co., Ltd., for exporting motorcycles to Russia without obtaining the required ministerial approval between 2022 and 2024. METI directed the company to strengthen export control compliance, clarify internal procedures, and implement measures to prevent recurrence. Under Japan’s sanctions on Russia pursuant to the FEFTA, exporting motorcycles valued at over JPY600,000 to Russia requires prior approval from the Minister for Economy, Trade and Industry. Red. Red Baron Co., Ltd., circumvented this requirement by routing exports through third countries such as South Korea, triggering the above warning action.
In addition to the above, unauthorised export of personal watercrafts and used motorcycles to Russia led to convictions in 2024 and the same for passenger cars in 2025. In the former case, METI issued an order to the company concerned and its representative director (a Russian national) prohibiting the export of goods for a period of one year and prohibiting its representative director from assuming any executive position in the relevant company for the same period of the above prohibition.
METI has also highlighted further cases in its compliance guidance materials to illustrate common pitfalls and the importance of strict adherence to the FEFTA requirements, as outlined below.
Case 1: transshipment to Russia via a third country
Exports to Russia are restricted under Japan’s sanctions regime. In this case, regulated goods were shipped to Russia via a third country. The exporter mistakenly believed that sanctions only applied to direct exports to Russia and failed to confirm the interpretation with METI. Under the FEFTA, if the goods are ultimately destined for Russia, the destination is considered Russia – even if routed through another country. Exporting to a third country for onward shipment constitutes a transshipment export, which violates the relevant sanctions under the FEFTA.
Case 2: misinterpretation of luxury goods threshold for passenger vehicles
An exporter was aware that passenger vehicles and similar luxury goods exceeding JPY6 million per unit were restricted under Russia sanctions, but misinterpreted the threshold as the purchase price rather than the export value. The exporter proceeded with a direct shipment to Russia. METI clarified that the “amount per unit” for luxury goods sanctions was calculated based on the total value under the export contract divided by the number of units, or, if different, the FOB price at the Japanese port of export at the time of shipment. Passenger cars and goods vehicles with engine displacement exceeding 1,900 cc, hybrid engine passenger cars, and similar vehicles are subject to these measures.
North Korea: UNSC-based and own autonomous sanction measures
For North Korea, Japan is implementing both UNSC-driven sanctions and Japan’s own autonomous measures.
UNSC-based measures
Japan enforces all measures mandated by UNSC resolutions, including:
- asset freezes – individuals and entities designated by the Security Council or its sanctions committee;
- export bans – all arms, luxury goods, aviation fuel, new helicopters and vessels, crude oil (annual ceiling: 4 million barrels or 525,000 tonnes), petroleum products (annual ceiling: 500,000 barrels), machinery, electrical equipment, transport equipment, iron and steel, base metals, and more;
- import bans – all arms, specific natural resources (coal, iron, iron ore, copper, nickel, silver, zinc, lead and lead ore), marine products (including fishing rights), textiles, agricultural products, machinery, electrical equipment, earth and stone, timber, vessels, etc; and
- other restrictions – personnel exchanges, port calls by North Korean vessels, and related activities.
Japan’s own autonomous measures
Beyond UNSC obligations, Japan imposes stricter controls:
- Export Ban: Since 2009, the export of all items to North Korea (including those from a third country) requires prior approval from the Minister for Economy, Trade and Industry.
- Import Ban: Since 2006, the import of all items from North Korea requires prior approval from the Minister for Economy, Trade and Industry.
The approval for the above items is not granted except in rare cases of limited exceptions. Further, entry into Japan by North Korean nationals is generally prohibited. All North Korean vessels and any foreign vessels that called at a North Korean port are prohibited from entering Japan. The reporting threshold for carrying means of payment to North Korea has been lowered from the equivalent of over JPY1 million to JPY100,000.
These measures have been repeatedly extended, most recently in April 2025, when Japan decided to continue them until 13 April 2027.
Recent enforcement example
On 15 March 2024, METI issued a formal warning to an individual who imported alcoholic beverages that originated in North Korea as hand luggage without obtaining the required ministerial approval. This violated Japan’s blanket import ban in place since 2006. METI’s press release reiterated that the ban applies to all goods of North Korean origin or shipped therefrom, with no personal effects exception for hand-carried items in the absence of prior approval. Furthermore, the unauthorised import of freshwater clams from North Korea in violation of trade sanctions led to a conviction in 2025.
In addition, METI has introduced other enforcement examples in its published materials, including:
- Case 1: An order for daily necessities was received from an acquaintance residing in North Korea, declared to customs as being exported to China, and subsequently re-exported to North Korea.
- Case 2: At a business meeting held in China, the purchase of North Korean seafood products was agreed upon after being introduced by a Chinese company, and the goods were subsequently imported into Japan via China.
Iran: nuclear-related measures and sectoral restrictions
Japan implements sanctions against Iran pursuant to UNSC resolutions. In September 2025, Japan reactivated sanctions under the UNSC “snap-back” mechanism, reinstating measures previously eased under the Joint Comprehensive Plan of Action. Key measures include:
- Asset Freezes: Assets of designated entities and individuals involved in Iran’s nuclear and missile development programmes shall be frozen.
- Investment Prohibition Measures: Certain capital transactions and foreign direct investment by Iranian persons into shares or other interests in Japanese companies operating in sectors designated as “Sectors Subject to Measures Prohibiting Investment by Iran Related to Nuclear Technology, etc” under the MOFA’s Notice (promulgated on 28 September 2025) are principally prohibited. Such transactions require either prior permission or notification (in principle, they are prohibited) under the FEFTA.
- Measures to Prevent Fund Transfers: Payments made for the purpose of contributing to activities designated by the MOFA’s Notice (promulgated on 28 September 2025) as “Activities related to Iran's proliferation-sensitive nuclear activities and development of nuclear weapon delivery systems subject to measures to prevent the transfer of funds” and “Activities related to the supply of major conventional weapons, etc, to Iran” shall be subject to permission.
- Import Bans: Imports of weapons and nuclear-related items originating from Iran require prior approval from the Minister for Economy, Trade and Industry.
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Anderson Mori & Tomotsune is a full-service law firm with around 700 professionals that is best known for serving overseas companies doing business in Japan since the early 1950s. It is proud of its long tradition of serving the international business and legal communities, and of its reputation as one of the largest full-service law firms in Japan. The firm’s economic securities and international trade practice group consists of approximately 50 lawyers and provides advice in the areas of sanctions, international trade law and economic securities. The firm’s strength lies in its team of specialists who are well-versed in the practicalities of various countries, including Japan, Russia, CIS, the United States, and China. The firm’s main office in Tokyo is supported by offices in Osaka, Nagoya, Beijing, Shanghai, Singapore, Ho Chi Minh City, Bangkok, Jakarta, Hong Kong, London, Hanoi and Brussels.
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