Quality Magazine

Industry News: Mitutoyo Gets Export Ban

August 3, 2007

TOKYO, Japan--Japanese precision equipment maker Mitutoyo Corp. has been banned from exporting various precision measuring tools for periods of up to three years, according to a decision recently handed down by the Japanese government.

The company has been banned from exporting any products anywhere, including the United States, for six months, from July 3, 2007 until January 2, 2008. For 2-1/2 years following the end of the general export prohibition, there will be restrictions placed on Mitutoyo Japan’s ability to export computer numerically-controlled coordinate measuring machines (CNC CMMs) and the parts for these machines. During this period, Mitutoyo Japan will be permitted to export CNC CMMs and their parts to end users, as long as that end user is clearly identified and the proper licenses for export are in place.

The move marks the first time the Ministry has handed down a three-year export ban, which is the longest period permitted.

In late 2006, Mitutoyo Japan voluntarily agreed to similar export restrictions. “During that time, our existing inventory levels allowed us to continue to meet customer demands with very few exceptions, and it is our hope that these restrictions will again have a minimal impact on our customers,” said a Mitutoyo America Corp. spokesperson.

On June 25, a Japanese court imposed suspended sentences to four ex-employees of the company and fined the company 45 million yen for violating foreign exchange and customs laws, which included exporting five precision measuring tools to a subsidiary in Malaysia via Singapore between October 2001 and July 2005 without obtaining government permission.

CNC CMMs can, among other purposes, be used to measure cylinders with great precision, and the Japanese government claims they can be used on centrifuges employed in uranium enrichment, a process that can produce civilian nuclear fuel or fissile material for a nuclear weapon.

Though Malaysia is not on Japan's export blacklist, Japanese laws still require companies to receive government authorization for sensitive exports valued at more than $8,500, regardless of the country. Mitutoyo Japan admitted in November 2006 it had broken the law in a case involving the export of CNC CMMs without the required government permission.

“At Mitutoyo America Corp. we are wholly committed to compliance. The incident at hand has given us cause to carefully review the compliance policies we currently have in place to help ensure that we continue to conduct business ethically and responsibly. In fact, in February 2007, Mitutoyo America Corp. formed an internal corporate compliance committee. The goal of this Committee is to ensure that we continue to conduct operations that are in line with government regulations, as well as our own stringent guidelines for ethical operations,” said a Mitutoyo America Corp. spokesperson.