P.R. China Issues New Export Control Regulations

Regulations on Export Control of Dual-Use Items

P.R. China is enforcing a new set of Regulations on Export Control of Dual-Use Items (hereinafter, the “new regulations”) starting December 1, 2024, marking a significant step in its efforts to safeguard national security and enhance global cooperation on non-proliferation. This updated framework, announced by the State Council, aims to regulate the export of goods, technologies, and services that can be used for dual-use items with both civilian and military purposes.

Dual-use items, as referred to in the new regulations, are goods, technologies, and services that have both civilian and military applications or contribute to enhancing military capabilities. Specifically, they can be used for the design, development, production, or use of weapons of mass destruction and their delivery systems, including related technical data and documentation.

Licensing requirements regarding the export of dual-use items

According to the new regulations, the export of dual-use items is strictly regulated through a licensing system. Exporters are required to apply for licenses from the Ministry of Commerce (MOFCOM) when dealing with dual-use items listed in the export control list or subject to temporary control measures.

Types of licenses and eligibility

Exporters have access to three main types of licenses:

1. Single license: This license permits a single export of a specified dual-use item to a designated end user, with a validity period of one year. If the export is completed within the validity period, the single license shall automatically become invalid.
2. General license: This option allows for multiple exports of specific dual-use items to one or more end users over a maximum period of three years.
3. Registration-based export certificate: This option requires exporters to fill in and report relevant information with the MOFCOM every time before exporting certain dual-use items and obtain an export certificate. With the export certificate, exporters can then proceed with the export.

Approval timeline

Once an application is submitted, MOFCOM will conduct a review, either independently or in collaboration with relevant national departments, within a timeframe of 45 working days. During this period, the agency will determine whether to approve or deny the license. For exports that may significantly affect national security, additional approvals from the State Council or the Central Military Commission could be required.

Penalties for non-compliance

Failure to comply with these regulations can lead to serious penalties, including substantial fines (up to RMB 3 million) and restrictions on future licensing applications. 
Entities found guilty of violations may face administrative sanctions, and companies with severe penalties within the last five years are barred from applying for general licenses or obtaining an export certificate through the registration-based information submission method. 

Additionally, MOFCOM has the authority to revoke existing export licenses if violations occur, halting export activities until compliance is restored.

What does it mean for Exporters?

• Obtain the appropriate export licenses.
• To adhere to these new export control requirements, companies should establish robust internal compliance systems that track and document all export activities, maintaining detailed records of their export history.
• Exporters shall better navigate the complexities of China’s export control regulations and ensure their operations remain compliant

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