Asset-freeze and payment-prohibition mechanics under FEFTA
Japan's primary economic-sanctions tool is the prohibition of cross-border payments and capital transactions involving designated individuals and entities. FEFTA Article 16 authorizes the competent minister to require permission for payments when the minister finds it necessary to fulfill Japan's obligations under treaties and international agreements, to contribute to international efforts for peace, or pursuant to a Cabinet decision (which must be approved by the Diet) to maintain Japan's peace and security. Following an official designation—typically published via Official Gazette notice—all natural and legal persons are prohibited from engaging in "payments" and "capital transactions" with the designated person or entity unless they obtain specific permission from the relevant minister.
Scope of prohibited payments
FEFTA Article 6 defines "payment or receipt of payment" (支払等, shiharai-tō) to include payment in currency, remittances through financial institutions, and transfers of deposit claims or other payment instruments. The prohibition reaches cross-border transfers (payments from Japan to a foreign country) and payments between residents and non-residents, whether the designated person is the payer, the payee, or an intermediate beneficiary. Under Article 16, when the competent minister has made it obligatory to obtain permission for a payment involving a designated person, any party that conducts such a payment without permission is subject to administrative prohibition orders (Article 16-2) and criminal penalties. The Ministry of Finance maintains and publishes the list of designated individuals and entities subject to asset-freezing measures under FEFTA; as of 2024, nearly 400 individuals and entities are designated in connection with North Korea's nuclear-related programs and Iranian nuclear activities in accordance with UN Security Council resolutions. Separate sectoral and jurisdictional restrictions also apply; for example, payments to individuals or entities domiciled in North Korea exceeding ¥100,000 (absent humanitarian justification) have been prohibited since February 26, 2016, and transactions "for the purpose of contributing to Iran's nuclear activities" have been restricted since January 22, 2016 (updated September 28, 2025).
Capital transactions
FEFTA Article 21 requires permission for "capital transactions" when the competent minister (the Minister of Finance for most capital transactions; the Minister of Economy, Trade and Industry for certain service-related capital flows) finds it necessary under the same three legal grounds—international treaty obligations, contribution to international peace, or Cabinet decision for Japan's peace and security. Article 20 defines capital transactions to include deposit agreements, trust agreements, loan contracts, guarantee agreements for debts, acquisition or disposition of securities, derivative contracts, and the acquisition or disposition of claims or debt obligations. When a capital transaction with a designated person requires permission under Article 21, the payment associated with that transaction is also prohibited under Article 8 unless authorization is obtained.
Bank and financial-institution obligations (Article 17)
FEFTA Article 17 imposes a critical gatekeeper duty on banks and other prescribed financial institutions (banks as defined in the Banking Act, and other financial institutions prescribed by Cabinet Order, as well as funds-transfer service providers under the Funds Settlement Act). These entities are prohibited from conducting foreign-exchange transactions for their customers until they have confirmed that the customer's payment either (a) does not fall under a category requiring permission, or (b) if it does require permission, that the customer has obtained the necessary authorization. This confirmation obligation applies before the bank conducts the exchange transaction. The Ministry of Finance has issued guidance to financial institutions, including banks, funds-transfer service providers, crypto-asset exchange service providers, and currency-exchange operators, setting out obligations to assess the risk of breaching asset-freezing measures, to maintain and update screening lists of designated persons and entities, and to verify customer transactions against those lists. Financial institutions are encouraged to report to MOF when they identify designated persons or entities among their customers.
Licensing framework
If a transaction falls within a prohibited category, the person or entity proposing the transaction must apply to the competent minister for permission. The application is submitted via the Bank of Japan using designated forms. FEFTA Article 16 (for payments) and Article 21 (for capital transactions) authorize the competent minister to permit otherwise-prohibited transactions; the statute does not enumerate specific exemption categories or humanitarian carve-outs. Each application is evaluated on a case-by-case basis. The licensing framework allows the minister to authorize transactions when necessary to protect the rights of bona fide third parties acting in good faith, though the precise criteria and approval standards are set forth in ministerial guidance and practice rather than in the statute itself.
Administrative sanctions
Under FEFTA Article 16-2, if a person conducts a payment requiring permission without obtaining that permission, and the competent minister finds that the person is likely to repeat such a violation, the minister may—for a period of up to one year—prohibit that person from making payments from Japan to a foreign country (other than payments through banks or funds-transfer service providers) and from making and receiving payments between residents and non-residents, or may require the person to obtain permission for such payments. A parallel provision in Article 22 applies the same administrative prohibition or permission requirement (for up to one year) to capital transactions conducted without the required permission.
Criminal penalties
FEFTA imposes criminal penalties that vary by transaction type. For violations regarding payments, capital transactions, and service transactions (Articles 70 and 71), a natural person is subject to imprisonment for not more than three years, or a fine of not more than ¥1,000,000 or three times the value of the relevant transaction, whichever is higher (or both). For juridical persons, when a violation is committed in connection with the business or assets of the corporation, the corporation is subject to a fine of not more than ¥300,000,000 (or, if three times the value of the transaction exceeds ¥300,000,000, the higher amount).
For violations regarding trade in goods (import or export without required permission), penalties are more severe. Under Article 69-6, a natural person faces imprisonment for not more than five years, or a fine of not more than ¥10,000,000 or five times the value of the subject goods, whichever is higher (or both). If a corporation commits a trade-in-goods violation in connection with its business or assets, the corporation is subject to a fine of not more than ¥500,000,000 (or, if five times the value of the subject goods exceeds ¥500,000,000, the higher amount) (Article 72).
METI has established a post-facto audit system: when METI discovers that approval was not obtained for a payment, service transaction, or import/export subject to sanctions and determines there is a possibility of a FEFTA violation, METI conducts an audit to establish the facts and requires the business operator to formulate measures to prevent recurrence. This administrative process operates alongside potential criminal enforcement.
Source: Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949), Articles 6, 8, 16, 16-2, 17, 20, 21, 22, 69-6, 70, 71, 72 – Japan Law Translation Source: Economic Sanctions Overview – Ministry of Finance Source: National Risk Assessment of Proliferation Financing in Japan (December 2024) – Ministry of Finance Source: Follow-up Report: Anti-money laundering and counter-financing of terrorism measures – Japan (November 2021) – Ministry of Finance
North Korea autonomous sanctions program — comprehensive trade and payment bans
Japan maintains its most extensive autonomous sanctions regime against the Democratic People's Republic of Korea (North Korea), imposing comprehensive import and export prohibitions, payment restrictions, and capital-transaction controls that go beyond the measures required by United Nations Security Council resolutions. These autonomous measures are authorized under FEFTA Article 48(3) (exports) and Article 52 (imports) and implemented pursuant to Cabinet decisions approved by the Diet under FEFTA's third legal basis—countermeasures necessary to maintain Japan's peace and security. The program has been in place since 2006 (import embargo) and 2009 (export embargo) and reflects Japan's dual policy concerns: North Korea's nuclear-weapons and ballistic-missile development programs, and North Korea's abductions of Japanese citizens.
Comprehensive trade ban: all imports and exports
Under the Cabinet decision extended in April 2023, Japan prohibits all exports of goods destined for North Korea and all imports of goods originating in or shipped from North Korea. The export prohibition operates by requiring exporters to obtain approval from the Minister of Economy, Trade and Industry under FEFTA Article 48(3); in practice, METI denies all applications save those for humanitarian purposes. The import prohibition similarly requires importers to obtain approval from METI under FEFTA Article 52; again, approvals are granted only for humanitarian purposes. As announced by METI on April 7, 2023, the measures were extended for the period from April 14, 2023, to April 13, 2025. Unable to confirm as of 2026-06-01 whether METI has published an English-language announcement of a further extension beyond April 13, 2025.
The prohibition reaches intermediate trade (also known as triangular trade): transactions involving the buying, selling, lending, borrowing, or giving of goods that involve the movement of goods between North Korea and third countries, even when the goods never physically enter Japan, are prohibited under FEFTA Article 25(6). This provision closes the route of indirect exports via a third country. Payments of import bills for goods originating in or shipped from North Korea that are imported without the required import approval are likewise prohibited under FEFTA Article 16(5), thereby cutting off the payment leg of any unauthorized import.
Payment and capital-transaction prohibitions
Payments to individuals or entities domiciled in North Korea are subject to strict licensing requirements. Since February 26, 2016, any payment exceeding ¥100,000 to a North Korean-domiciled person requires permission from the Minister of Finance under FEFTA Article 16. As a matter of policy, MOF grants permission only for humanitarian purposes. Japan also prohibits remittances to North Korea in principle. The National Risk Assessment of Proliferation Financing published by MOF in December 2024 states that "Japan prohibits remittances to North Korea in principle in order to prevent flows of funds to that country." MOF maintains a narrow humanitarian exemption for small-value payments to individuals in North Korea (for example, family remittances) when approved on a case-by-case basis; the Assessment notes that MOF "exempts, on humanitarian grounds, payments to individuals in North Korea from the requirement to obtain permission."
Designated persons and entities
In addition to the comprehensive jurisdictional bans, Japan designates individuals and entities involved in or providing support for North Korea's nuclear, ballistic-missile, and proliferation programs for asset-freezing measures under FEFTA Article 16 and Article 21. These designations derive primarily from UN Security Council resolutions but are incorporated into Japan's domestic sanctions list maintained by the Ministry of Foreign Affairs and published by MOF. As of 2024, the sanctions list includes nearly 400 individuals and entities designated in connection with North Korea's nuclear-related programs. Payments to or capital transactions with any listed person or entity require prior permission; in practice, such permission is rarely granted.
Humanitarian exemption
Goods exported for humanitarian purposes are exempt from the export and import prohibitions. METI's April 2023 announcement states: "Goods exported for humanitarian purposes are exempt from the above restrictions." The exemption typically covers medical supplies, food aid channeled through recognized international organizations, and goods for disaster relief. Exporters claiming the humanitarian exemption must apply to METI and demonstrate that the goods will reach civilian beneficiaries and will not be diverted to the North Korean government or military. The approval process is case-specific and subject to end-use monitoring requirements.
Enforcement and penalties
Violations of the North Korea trade prohibitions carry the highest criminal penalties under FEFTA. For unauthorized exports or imports, a natural person faces imprisonment for not more than five years, or a fine of not more than ¥10,000,000 or five times the value of the subject goods, whichever is higher (or both) under FEFTA Article 69-6. If a corporation commits the violation in connection with its business or assets, the corporation is subject to a fine of not more than ¥500,000,000 (or, if five times the value of the goods exceeds ¥500,000,000, the higher amount) under FEFTA Article 72.
The National Risk Assessment of Proliferation Financing reports enforcement cases disclosed by METI and Japanese law enforcement. Case 4 in the Assessment describes an August 2019 arrest: "In January 2017, a former trading company manager was found to have exported furniture and other goods to North Korea via Hong Kong and Dalian in the People's Republic of China despite the prohibition of all goods destined for North Korea that was introduced on June 18, 2009, and the former manager was arrested in August 2019 for having violated the FEFTA." The document notes that "there are entities engaging in illicit exports and indirect exports to North Korea via third countries, and those entities and others involved in remittances made thereby may be considered to be potential threats."
Policy rationale and renewal process
Japan's North Korea autonomous sanctions reflect two distinct but related policy concerns. First, North Korea's continued nuclear-weapons development and ballistic-missile testing pose a direct security threat to Japan; the comprehensive trade and payment bans are intended to deny financial and material resources to those programs. Second, North Korea's abductions of Japanese citizens in the 1970s and 1980s remain unresolved. The Cabinet decision underlying the autonomous sanctions explicitly cites both grounds. The Cabinet reviews and renews the sanctions program biennially (most recently April 2023), and each renewal requires Diet approval under FEFTA's third legal basis.
Source: Extension of Ban on Imports from and Exports to North Korea, Pursuant to the Foreign Exchange and Foreign Trade Act (April 7, 2023) – METI Source: National Risk Assessment of Proliferation Financing in Japan (December 2024) – Ministry of Finance Source: Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949), Articles 16, 16(5), 25(6), 48(3), 52, 69-6, 72 – Japan Law Translation
Russia sanctions program — export controls, asset freezes, and payment prohibitions
Japan maintains an extensive autonomous sanctions program against the Russian Federation in coordination with G7 partners, implemented following Russia's February 2022 invasion of Ukraine. The measures combine asset-freezing and payment prohibitions under FEFTA Articles 16 and 21, comprehensive export controls under FEFTA Articles 25 and 48, and import restrictions under FEFTA Article 52. These sanctions are imposed under FEFTA's second legal basis—"contribution to international efforts for international peace"—and reflect the Japanese government's policy to support Ukraine and deter further Russian aggression. Japan characterizes the situation with the statement "Ukraine today may be East Asia tomorrow," underscoring that the measures serve Japan's own security interests in maintaining a rules-based international order.
Designated-person asset freezes and payment prohibitions
Japan has designated hundreds of Russian individuals and entities for asset-freezing measures. As of September 12, 2025, the Ministry of Foreign Affairs Notice lists 47 Russian entities and 9 individuals subject to payment and capital-transaction prohibitions under FEFTA Articles 16 and 21. The designated list includes the Central Bank of the Russian Federation, major Russian banks (VEB.RF, Promsvyazbank, Bank Rossiya, VTB Bank, Bank Otkritie, Sovcombank, Novikombank), senior government officials (including President Vladimir Putin), and entities involved in Russia's defense industry and strategic sectors. Under the designation framework, all payments to a designated person require prior permission from the Minister of Finance, and all capital transactions (deposit agreements, trust agreements, loan contracts, securities transactions) require permission from the competent minister. In practice, such permissions are rarely granted save for narrowly defined humanitarian purposes. The prohibition reaches payments in any form—currency, bank transfers, remittances, and crypto-asset transactions—and applies whether the designated person is the payer, payee, or intermediate beneficiary. Financial institutions operating in Japan are required under FEFTA Article 17 to screen all cross-border payments against the designated-person list and to confirm that the customer has obtained the necessary permission before conducting a foreign-exchange transaction.
Export prohibitions — sectoral and entity-based controls
Japan's export controls on Russia are layered and comprehensive, prohibiting or restricting broad categories of goods and technology through a combination of sectoral bans and entity-specific prohibitions. The restrictions, enforced by METI under FEFTA Articles 25 and 48, operate through six principal categories as set forth in the Export Trade Control Order and implementing Ministerial Notices.
Category 1: Multilateral-regime-listed dual-use goods (Russia and Belarus). All goods subject to the Wassenaar Arrangement, Nuclear Suppliers Group, Missile Technology Control Regime, and Australia Group that appear in Appended Table 1 of the Export Trade Control Order require METI approval for export to Russia or Belarus. These include machine tools, carbon fibers, high-performance semiconductors, and related technologies. In practice, METI denies all applications except those for humanitarian purposes. The enforcement date for this category was March 18, 2022, and it applies equally to Belarus.
Category 2: Unlisted dual-use items that could contribute to military capacity (Russia and Belarus). General dual-use goods such as semiconductors, computers, telecommunication equipment, and their related technologies require METI approval even when not listed in the multilateral-regime control lists, if the exporter determines (or METI informs the exporter) that the items could be used in the development of Russian or Belarusian military capacity. This catch-all provision was enforced on March 18, 2022, and was expanded on February 3, 2023. The National Risk Assessment of Proliferation Financing notes that this category targets circumvention routes via third countries.
Category 3: Chemical- and biological-weapon precursors (Russia). Substances usable as raw materials for chemical-weapon agents and equipment for production of chemical-weapon agents and biological agents have been subject to export controls since October 7, 2022, with the scope expanded on February 3, 2023. This measure implements Japan's obligations under the Chemical Weapons Convention and responds to concerns about Russia's use of chemical agents in the conflict.
Category 4: Military-related entities (Russia and Belarus). Exports to designated military-related entities require METI approval, which is denied as a matter of policy. The designation list, published by METI and updated periodically, includes 437 Russian entities (as of June 2, 2023, when 80 entities were added) such as the Ministry of Defense of Russia, Russian aircraft manufacturers (Sukhoi, MiG, Ilyushin, Tupolev), shipbuilders, missile-design bureaus, and research institutes involved in nuclear-weapons development. The list also includes 27 Belarusian entities tied to the Armed Forces of Belarus. The prohibition reaches exports made "through direct or indirect transactions with a Designated Person," meaning that an exporter must obtain METI approval if the designated entity is the final recipient even when the direct contractual counterparty is a third party.
Category 5: Advanced-technology items (Russia). Items related to the development of advanced technology, including quantum computers, additive-manufacturing equipment (3D printers for metal parts), metamaterials (materials that improve the difficulty of detection by electromagnetic waves), high-entropy alloys, and conductive polymers, have been subject to export controls since May 20, 2022. This category targets dual-use technologies with both civilian and military applications in next-generation defense systems.
Category 6: Items that could enhance Russian industrial capacity (Russia). Items that could contribute to the enhancement of Russian industrial capacity require METI approval. This category, enforced since April 5, 2022, includes dump trucks, bulldozers, vehicles with a cylinder capacity exceeding 1,900 cc, hybrid passenger vehicles, oil-refining equipment, and aircraft engines. The inclusion of high-displacement and hybrid vehicles reflects the Japanese government's concern that such vehicles can be repurposed for military logistics or converted into military platforms. METI does not grant approvals for these items except in narrowly defined humanitarian cases.
Luxury-goods export prohibition (Russia). Japan prohibits the export of luxury goods to Russia, including alcoholic beverages (HS codes 22.03, 22.04, 22.05, 22.06, 2207.10, 22.08), high-value fashion and accessories, jewelry and precious stones, luxury leather goods, high-value artworks, and musical instruments above defined value thresholds. This prohibition, enforced since April 5, 2022, targets the Russian elite and is coordinated with similar bans imposed by the EU and the United States.
Import prohibition — crude oil price cap and sectoral restrictions
Japan prohibits the import of certain goods originating in or shipped from Russia under FEFTA Article 52. The import prohibition includes alcoholic beverages, wood, electric machinery, crude oil and petroleum products traded at prices exceeding the G7-coordinated price cap, and coal. The crude-oil price cap, introduced in December 2022 and lowered from USD 60 to USD 47.6 per barrel effective September 12, 2025, operates by requiring importers, capital-transaction participants, and service providers to obtain permission from the Minister of Finance or the Minister of Economy, Trade and Industry if the seaborne Russian-origin crude oil is purchased at a price exceeding the cap. The lowered price cap applies to Russian crude oil unloaded in Japan on or after October 18, 2025, and to related obligations and services performed on or after September 12, 2025. A transitional rule applies the former USD 60 cap to crude oil unloaded on or before October 17, 2025, and to obligations performed before September 12, 2025.
Export and import bans — Donetsk and Luhansk (eastern Ukraine)
Japan prohibits all exports to and imports from the self-proclaimed "Donetsk People's Republic (DPR)" and "Luhansk People's Republic (LPR)" in eastern Ukraine. The import prohibition was enforced on February 26, 2022, and the export prohibition on March 18, 2022. These measures are implemented under FEFTA Article 48(3) (exports) and Article 52 (imports) in response to Russia's recognition of the DPR and LPR as independent states and subsequent military operations in those regions.
Circumvention and third-country transshipment enforcement
METI has issued enforcement guidance warning exporters that circumvention to Russia through third countries is a criminal offense. FEFTA Article 25(6) prohibits intermediate trade (triangular trade) transactions—the buying, selling, lending, borrowing, or giving of goods involving the movement of goods between Russia and third countries—even when the goods never physically enter Japan. Criminal penalties for unauthorized exports to Russia or through third countries are severe: imprisonment for not more than five years, or a fine of not more than ¥10,000,000 or five times the value of the subject goods, whichever is higher (or both) for natural persons under FEFTA Article 69-6, and a fine of not more than ¥500,000,000 (or five times the value of the goods if higher) for corporations under FEFTA Article 72. The National Risk Assessment of Proliferation Financing reports documented enforcement cases, including the August 2019 arrest of a former trading-company manager who exported furniture and other goods to North Korea via Hong Kong and Dalian; METI has indicated that similar enforcement actions apply to Russia circumvention routes. METI's December 2024 enforcement poster states: "Criminal penalties could be imposed if you export sanctioned goods to a third country knowing that they will be resold to Russia. (Administrative penalties even for negligence)."
Coordination with G7 and continuing evolution
Japan's Russia sanctions are coordinated with the G7 and regularly updated. The Ministry of Foreign Affairs, Ministry of Finance, and Ministry of Economy, Trade and Industry issue joint announcements implementing new measures and expanding designated-person lists. As of 2025, Japan has imposed cumulative sanctions measures in response to Russia's invasion of Ukraine in more than 30 separate Cabinet decisions and ministerial notices since February 2022. The sanctions regime continues to evolve in response to Russia's conduct in Ukraine, G7 coordination, and observed circumvention activity. Exporters and financial institutions operating in Japan are required to monitor METI, MOF, and MOFA announcements for updates to the designated-entity lists, controlled-goods categories, and import/export prohibitions.
Source: Measures based on the Foreign Exchange and Foreign Trade Act regarding the situation surrounding Ukraine (September 12, 2025) — Ministry of Foreign Affairs Source: Japan's Export and Import measures against Russia and Belarus (Overview, September 2023) — METI Source: Economic Sanctions Overview — Ministry of Finance Source: Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949), Articles 16, 21, 25, 25(6), 48, 48(3), 52, 69-6, 72 — Japan Law Translation
UN Security Council sanctions implementation and the Iran program
Japan implements mandatory United Nations Security Council sanctions through FEFTA's first legal basis—"when the competent minister finds it necessary to fulfill Japan's obligations under treaties and other international agreements"—and, in certain cases, through FEFTA's second legal basis—"contribution to international efforts for international peace." These two categories encompass all UN Security Council resolutions imposing economic measures, including those targeting North Korea, Iran, Taliban-related persons, and international terrorists. Unlike Japan's autonomous sanctions (such as the comprehensive North Korea trade and payment bans and the Russia program), UN-based measures are treaty obligations binding on Japan as a UN member state. The distinction matters for licensing practice: while autonomous sanctions allow almost no humanitarian exceptions in practice, UN-mandated measures may incorporate exemption categories prescribed by the Security Council resolution itself.
Iran sanctions snapback—September 2025 reimposition of UNSC resolutions
On September 28, 2025, Japan time, sanctions against Iran that had been lifted under UN Security Council Resolution 2231 in 2015 were reimposed following the activation of the snapback mechanism by the E3 (France, Germany, United Kingdom). The reimposed measures reinstate previously lifted Resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008), and 1929 (2010). Japan characterised the snapback as a response to the Iranian Government's continued failure to meet its requirements under the Joint Comprehensive Plan of Action (JCPOA) and a necessary measure to prevent Iran's development of nuclear weapons. The snapback took effect at 20:00 EDT (00:00 GMT) on September 27, 2025, and Japan proceeded with the swift reintroduction of restrictions reapplied by these UNSC resolutions in accordance with its obligations as a UN member. The Ministry of Foreign Affairs, Ministry of Finance, and Ministry of Economy, Trade and Industry jointly promulgated implementing measures effective September 28–29, 2025.
Designated persons and entities—asset freezes and payment prohibitions
Japan designated 78 entities and 43 individuals as being involved in Iran's sensitive nuclear activities and the development of nuclear weapon delivery systems for asset-freezing measures under FEFTA Articles 16 and 21, as promulgated by Ministry of Foreign Affairs Notice on September 28, 2025. These designations derive from the reimposed UN Security Council resolutions and are maintained on Japan's consolidated sanctions list published by the Ministry of Finance. Payments to any designated individual or entity require prior permission from the Minister of Finance under FEFTA Article 16; in practice, such permissions are granted only for narrowly defined humanitarian purposes. Capital transactions—including deposit agreements, trust agreements, loan contracts, guarantee agreements for debts, acquisition or disposition of securities, derivative contracts, and the acquisition or disposition of claims or debt obligations—with designated persons require permission from the competent minister (Minister of Finance for most capital transactions; Minister of Economy, Trade and Industry for certain service-related capital flows) under FEFTA Article 21. Financial institutions operating in Japan are obligated under FEFTA Article 17 to screen all cross-border payments and capital transactions against the designated-person list and to confirm that the customer has obtained the necessary permission before conducting a foreign-exchange transaction.
Export controls—dual-use goods and technology related to nuclear activities
Effective September 29, 2025, METI reimposed export controls on goods and technologies related to Iran's nuclear activities and weapons-of-mass-destruction programs. The export of goods listed in Item 2 (nuclear-related goods and technologies) and Item 4 (missile-related goods and technologies) of Appended Table 1 of the Export Trade Control Order to Iran, and the provision of technologies listed in Item 2 and Item 4 of the Appended Table of the Foreign Exchange Order, require an export license from METI under FEFTA Articles 25 and 48. Without such a license, these exports are prohibited. The controlled categories include nuclear-related dual-use items (machine tools, carbon fibers, high-performance semiconductors, bellows valves made of corrosion-resistant materials for uranium hexafluoride, vacuum pumps used in uranium isotope separation equipment), missile-related items, and equipment for production of chemical-weapon agents and biological agents. METI maintains an End User List identifying foreign entities suspected of involvement in the development of weapons of mass destruction, which as of October 2025 includes hundreds of Iranian entities involved in Iran's defense industry, nuclear-research institutes, and missile-design bureaus. Exports to a designated End User entity require METI approval, which is denied as a matter of policy.
Import prohibitions—weapons and nuclear-related goods
Japan prohibits the import of weapons and related materials (as listed in Item 1 of Appended Table 1 of the Export Trade Control Order) originating in or shipped from Iran, as well as goods designated in the reimposed UNSC resolutions as related to Iran's nuclear activities. These include the items listed in Item 2 of Appended Table 1, Item 3(2)(7) (limited to bellows valves made of corrosion-resistant materials for uranium hexafluoride), Item 3(2)(9) (limited to vacuum pumps used in uranium isotope separation equipment), and Item 4 of the Export Trade Control Order. Imports of these goods require METI approval under FEFTA Article 52; in practice, approvals are granted only for humanitarian purposes.
Payment and capital-transaction restrictions—nuclear-related transactions
In addition to the designated-person asset freezes, Japan prohibits payments made "for the purpose of contributing to activities related to Iran's sensitive nuclear activities, the development of nuclear weapon delivery systems, or other activities prohibited by the relevant resolutions," as designated by Ministry of Foreign Affairs Notice promulgated on September 28, 2025. This prohibition reaches payments and capital transactions even when the counterparty is not a designated individual or entity, if the transaction purpose is to support Iran's nuclear or missile programs. The burden is on the payer or capital-transaction participant to establish that the transaction does not contribute to prohibited activities; if the competent minister determines that a transaction falls within the prohibited category, prior permission is required under FEFTA Articles 16 and 21.
Investment restrictions—Iranian-related parties in nuclear-technology sectors
Japan imposes inbound-investment restrictions on Iranian-related parties (individuals with Iranian nationality or entities established under Iranian law) seeking to acquire shares in Japanese companies operating in sectors designated as related to nuclear technology. Transfers of less than 1% of shares in listed companies to Iranian-related parties require a prior license from the Minister of Finance. Acquisitions of 1% or more of shares in listed companies or any acquisition in unlisted companies by Iranian-related parties are subject to notification requirements and are, in principle, prohibited under the Foreign Exchange and Foreign Trade Act's inbound foreign-direct-investment screening provisions. These restrictions implement UNSC Resolution 1929 and subsequent resolutions' calls to prevent Iran from accessing nuclear-related technologies through equity investments.
Financial-institution obligations—correspondent banking and branch prohibitions
Japan prohibits the establishment of new correspondent banking relationships with any Iranian banks. An advisory letter is issued by the Ministry of Finance to banks domiciled in Japan to make it clear that they are not to open new correspondent banking relations with any Iranian banks. Furthermore, should any Iranian financial institution apply for a license for opening branches or subsidiaries in Japan, or should any Japanese financial institution apply for a license for opening branches or subsidiaries in Iran, the Government of Japan will not authorize such applications in accordance with the Banking Act. These measures implement UNSC Resolution 1929's provisions to prevent the Iranian financial sector from facilitating proliferation financing. The Ministry of Finance also advises financial institutions to scrutinize customer identifications as required by FEFTA and the Act on Prevention of Transfer of Criminal Proceeds, and to file reports with the authorities upon detection of any suspicious transactions.
Export-credit and insurance restrictions
The Government of Japan announced that the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) will not enter into new medium to long-term (two years or over) commitments for export credit for trade with Iran, taking all circumstances into consideration. The Government prohibits the provision of insurance and reinsurance services by Japanese companies if activities covered by such insurance or reinsurance services could contribute to Iran's nuclear activities or to Iran's activities pertaining to the supply of large conventional weapons. Similarly, the Government prohibits the provision of brokering services both in primary and secondary markets by Japanese companies for securities issued by Iranian entities, if those securities could contribute to Iran's nuclear activities or to Iran's activities pertaining to the supply of large conventional weapons. These measures implement UNSC Resolution 1929's financial-sector restrictions and Japan's broader policy to deny financial resources to Iran's proliferation programs.
Distinction from autonomous sanctions and enforcement
The Iran sanctions program differs from Japan's autonomous sanctions against North Korea and Russia in both legal basis and scope. Whereas the North Korea comprehensive trade and payment bans are imposed under FEFTA's third legal basis (Cabinet decision for Japan's peace and security, requiring Diet approval), the Iran measures are imposed under FEFTA's first legal basis (fulfillment of international treaty obligations) and derive directly from UN Security Council resolutions. The Iran program is targeted: it prohibits designated-person transactions and transactions for the purpose of contributing to Iran's nuclear or missile activities, but it does not impose a comprehensive trade or payment ban against all Iranian persons or entities. Exporters and financial institutions must conduct case-by-case assessments to determine whether a proposed transaction falls within a prohibited category. Criminal penalties for violations are the same as for autonomous sanctions: for payments, capital transactions, and service transactions, a natural person faces imprisonment for not more than three years, or a fine of not more than ¥1,000,000 or three times the value of the relevant transaction, whichever is higher (or both) under FEFTA Article 70, and a corporation faces a fine of not more than ¥300,000,000 (or three times the transaction value if higher) under FEFTA Article 71. For export or import violations, a natural person faces imprisonment for not more than five years, or a fine of not more than ¥10,000,000 or five times the value of the subject goods, whichever is higher (or both) under FEFTA Article 69-6, and a corporation faces a fine of not more than ¥500,000,000 (or five times the value of the goods if higher) under FEFTA Article 72.
JCPOA background and future evolution
Japan had lifted many Iran-related sanctions in January 2016 (the "implementation day" under the Joint Comprehensive Plan of Action) in conjunction with the end of sanction-related rules against Iran under past UN Security Council resolutions. Following the United States' withdrawal from the JCPOA in May 2018 and the reimposition of U.S. secondary sanctions, Japan ceased most business operations with Iran pre-emptively to avoid U.S. sanctions exposure, though Japan continued to characterize the JCPOA as the diplomatic framework for resolving Iran's nuclear issue. The September 2025 snapback occurred after the E3 determined that Iran had failed to meet its JCPOA requirements; Japan supported the E3 activation and characterized the snapback as necessary to prevent nuclear proliferation. Japan's position remains that the Iran nuclear issue should be resolved through dialogue, and Japan continues to call on Iran to implement the Security Council resolutions and to resume full cooperation with the International Atomic Energy Agency (IAEA) in accordance with its obligations under the relevant safeguards agreements. The Iran sanctions regime is subject to change depending on Iran's compliance with IAEA obligations and any future diplomatic resolution; exporters and financial institutions operating in Japan must monitor METI, MOF, and MOFA announcements for updates to the designated-entity lists, controlled-goods categories, and licensing requirements.
Source: Reapplication of United Nations Security Council Resolutions of sanctions against Iran (Statement by Foreign Minister IWAYA Takeshi, September 28, 2025) — Ministry of Foreign Affairs Source: G7 Foreign Ministers Statement on Iran Sanctions Snapback (October 2, 2025) — Ministry of Foreign Affairs Source: Measures based on the Foreign Exchange and Foreign Trade Act regarding Iran pursuant to UN Security Council Resolutions (September 29, 2025) — METI Source: Economic Sanctions Overview — Ministry of Finance Source: Accompanying Measures pursuant to United Nations Security Council Resolution 1929 — Ministry of Foreign Affairs Source: Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949), Articles 16, 21, 25, 48, 52, 69-6, 70, 71, 72 — Japan Law Translation