Regulations on Export Control of Dual-Use Items Introduced in China
On September 30, 2024, China’s State Council officially announced the issuance of the Regulations on the Export Control of Dual-Use Items, set to come into effect on December 1, 2024. This landmark move represents a significant step by the Chinese government to establish a comprehensive regulatory framework for the export control of dual-use items, following the enactment of the Export Control Law in 2020. The Regulations are structured into six chapters, outlining key aspects such as the scope of application, control policies, specific measures (including licensing and end-use management), supervision, and legal responsibilities for non-compliance. By consolidating and streamlining export control regulations, these new guidelines aim to enhance the management of dual-use items in China’s export landscape. The Regulations are highly regarded as the Chinese equivalent of the U.S. Export Control Regulations, signaling a harmonized approach towards export control practices.
The Regulations introduce several crucial elements that businesses need to consider when navigating the evolving regulatory environment surrounding dual-use items. Here are some key highlights and implications for companies:
Integration of Control Measures: The Regulations mark a pivotal advancement in the integration of control measures for various types of dual-use items in China. By unifying the administration of export controls under a single legislative instrument, the Regulations aim to enhance coordination and oversight in this critical area.
Expanded Scope of Application: Article 49 of the Regulations extends the export control regulations extraterritorially to certain dual-use items, affecting overseas organizations and individuals. This expansion introduces new requirements for the transfer or provision of specific dual-use items outside of China, potentially impacting entities engaged in cross-border transactions involving Chinese-origin items.
Enhanced Licensing Policies: The Regulations reiterate the adoption of a licensing system for the export of dual-use items, categorized into single licenses, general licenses, and export certificates by information registration. These varying types of licenses provide exporters with different mechanisms for compliance based on their specific circumstances and export activities.
End User Management: The Regulations introduce a List of Parties of Concern and Controlled Parties List to manage end users and end uses effectively. This enhanced oversight mechanism imposes restrictions on exporters dealing with listed entities and introduces stringent license review policies for transactions involving restricted parties.
As China steps up its regulatory framework for governing dual-use items, companies operating in this sector must proactively assess and adapt their compliance strategies to align with the evolving requirements. The Regulations underscore the growing emphasis on export control enforcement and risk mitigation in a dynamic global trade environment. By understanding and adhering to these new guidelines, businesses can navigate regulatory complexities and ensure compliance while engaging in international trade activities involving dual-use items.
Source: https://www.hoganlovells.com/en/publications/china-issues-the-regulations-on-the-export-control-of-dual-use-items
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