Fiscal 2019 CSR Activity Report- Corporate Ethics and Legal Compliance

Improving Security Trade Controls

Governance

Watching the Latest Trends and Management Strategies for Security Trade Controls

Concerns about the spread of conventional mass weapons of destruction and changes in the international security balance necessitate risk management addressing security trade controls.
Toray Industries, Inc. convenes a Security Trade Administration Committee comprising officers of divisions that are involved in exports and technology transfer. In fiscal 2019, the committee decided on measures to implement for the fiscal year after considering pressing risks based on recent international circumstances and regulatory trends. The committee members also convene a Divisional Security Trade Administration Committee that communicates corporate measures and implements supplementary programs, such as precautions to be taken by departments and group companies under its supervision.

Practically Addressing Risks

Toray Group performs risk management of security trade controls with regard to the export of all products, devices, materials, and samples, as well as the transfer of technologies outside Japan. Particularly strict management is necessary for TORAYCA™ carbon fiber and its composite materials, semiconductor coating agents, and water treatment membranes, which are listed as restricted items requiring export permission from the Japanese Minister of Economy, Trade and Industry.
The following measures to enhance risk management associated with security trade controls have been implemented based on conditions in and outside of Japan.

(1) Enhanced employees’ capacity for accurate judgment within Toray Industries’ divisions and group companies

Toray Industries provided the necessary practical knowledge to mid-level employees who play a central role in security trade control. Training was also given to newly appointed managers to promote appropriate management on the front lines. A total of 769 employees participated in the 13 courses. The Company also conducted a series of advanced courses for employees with specialized expertise to practice classifications. A total of 127 employees participated in 2 courses. In addition, the Company systematically encourages employees to take the exam authorized by the Center for Information on Security Trade Controls in Japan. 221 Toray Group employees passed the exam in fiscal 2019, bringing the cumulative number of Toray Group employees who have passed the exam to 3,996 persons.

Cumulative number of Toray Group employees who have passed the exam authorized by the Center for Information on Security Trade Controls in Japan
3,996 persons

(2) Conducted regular audits

Toray Industries carried out paper audits and onsite audits of group companies, and provided individualized guidance based on the results to help group companies make improvements.

(3) Enhanced information sharing and reporting

Toray Industries integrated and centralized information on concerns such as suspicious trade inquiries, reported or consulted with the appropriate authorities as required, and took the appropriate measures. The Company also shared suspicious trade information at various company meetings, and took steps to improve its risk management.

(4) Improved inspection systems

Toray Industries began to fully link its security trade control system with its backbone sales system, and put in place a mechanism to prevent erroneous shipments due to human error. In order to improve management efficiency through use of the linked system, support was given to outstanding initiatives and the successful cases were shared with other departments.