Security Trade Controls
Thorough Compliance with Export Control Regulations
Countries with a high level of concern for international peace and security implement strict controls in accordance with international agreements on the export of commodities and technologies for civil use that could be diverted for use in weapons of mass destruction or conventional weaponry. Japan controls such exports through the Foreign Exchange and Foreign Trade Control Law.
To achieve full compliance with these export control regulations, Canon Inc. created a security trade control framework headed by the president in 1988. In the framework, the Foreign Trade Legal Division within the Global Logistics Management Center works as an administration division and the framework includes the general managers of all division headquarters, except for the Finance & Accounting Headquarters and Human Resources Management & Organization Headquarters.
Specifically, each related division and the Foreign Trade Legal Division, which controls export administration, double-check such issues as whether commodities and technologies for export are controlled by regulations and whether trading parties are engaged in the development of weapons of mass destruction.
We hold regular explanatory meetings for employees to make them aware of the importance of these export controls. 18 meetings were held on a variety of themes in 2011, with a total of around 1,300 participants.
Such thorough internal controls have enabled Canon to remain in compliance with the Foreign Exchange Control Law and maintain a bulk export license from Japan's Ministry of Economy, Trade and Industry continuously since 1990. This license is granted only to exporters who exercise strict controls.
We also support our Group companies worldwide in the establishment of administrative structures and management rules that match their type of business. More precisely, the Foreign Trade Legal Division dispatches representatives to offshore companies to deliver training courses, provides templates for corporate compliance programs, compiles English-language versions of guidelines, supplies educational materials for local employees, and carries out various other activities.
Guidance was provided to 46 companies within and outside Japan in 2011, 11 of which were visited by personnel for direct guidance. As a result, no infractions of export control laws took place within the Group.
We will continue to work to strengthen and expand the range of our guidance, especially for overseas Group companies, so as to keep infractions to zero for the Group.
Seminars for Preventing Serious Incidents Involving Security Trade Controls
Seminars for Preventing Serious Incidents Involving Security Trade Controls were held in October-November 2011 for general managers in R&D divisions as part of Canon's efforts toward thorough security trade control education. There were 62 participants.
These seminars presented actual case studies so as to deepen awareness of the seriousness of security trade control, owing to the fact that an infraction of these controls by a single employee could shut down all of Canon's export activities.
Redoubling Technology Transfer Controls
A variety of technologies are subject to export control regulations, not only commodities such as manufactured products and parts, but also diagrams, software, operational manuals, and other "arts" (information concerning products), which can be traded or transferred more easily than physical commodities. Due to the current proliferation of telecommunications networks, any employee can transfer technical information, so the most important issue becomes developing full awareness of technology transfer controls among all employees.
The Global Logistics Management Center therefore in 2009 issued the Technology Transfer Administrative Guidance, which covers the technology transfer regulations and the in-house technology transfer control rules in a Q&A format.
In 2010, we organized seminars using this guide as the textbook with the aim of reinforcing our technology transfer control system. It was then included as a Compliance Week theme in 2011, with lively exchanges about it at more than half of the operations at Canon Inc. and the Group companies in Japan. This confirmed the strong effectiveness of the use of Compliance Week, in which most employees participate.
We will continue to reinforce technology transfer controls know-how among the entire Group, including through the use of the educational methods described above.
