In addition to ongoing concerns about the spread of weapons of mass destruction, changes in the international security balance necessitate further 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 2023, 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.

Toray Group performs risk management of security trade controls for the export of all products, devices, materials, and samples, as well as the provision of technology to non-residents of Japan (including residents falling under specific categories). 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

With the implementation of measures to mitigate the risk of COVID-19 infection, Toray Industries utilized web conferencing for highly specialized practical training and e-learning for basic level specialized training. The training programs continue to be improved to provide more effective teaching suitable to these methods. In fiscal 2023 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. Study sessions and discussion meetings were held to focus on individual departments and companies in order to increase the reliability of transaction information. (A total of 11 courses were held with 364 employees participating in the web conference courses, 141 employees taking part in the e-learning courses, and 438 participating in hybrid meetings.) The Company also conducted a series of advanced courses for employees with specialized expertise to practice classifications. (A total of two courses were held with 334 employees participating in the web conference courses.)
In addition, the Company systematically encourages employees to take the various qualification exams authorized by the Center for Information on Security Trade Control (CISTEC) in Japan. In fiscal 2023, 254 Toray Group employees passed the exam, bringing the cumulative number of Toray Group employees who have passed the exam to 4,850 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 has fully linked its security trade control system with its backbone sales system in order to prevent legal violations due to human error. The system increases the reliability of transaction information by thoroughly reviewing automatic matching results with CISTEC chaser information (i.e. high-risk entities from various watch lists). Support was also provided for the system's implementation across group companies in Japan. (The system has been implemented at Toray Research Center Inc. Implementation is under review at the following companies: Du Pont-Toray Co., Ltd., Toray Celanese Co., Ltd., and Toray Medical Co., Ltd.)