China: Export Control Law Review for public comment


The revised draft Export Control Law was published on the National People’s Congress (NPC)’s website for public comments. December 28 – January 26).

Several laws of relevance for "Export Contro Law"

According to the legislative plan of the central government, several pieces of legislation may have an impact on export controls for certain goods leaving China. Three important ones are:

  1. the Export Control Law, not in effect yet, the second round of comments

  2. the Cryptography Law, in effect since 1/1/2020

  3. the Atomic Energy Law, not in effect yet


Chinese Export Control Law - Key Points

What type of export is covered? What about re-export?

Under the draft Chinese law, traditional export and deemed export are included. Export covers

  1. Moving controlled items from within Chinese territory to abroad; and

  2. Providing a foreign person (including a natural person and a legal person) and a foreign organization of other kinds with controlled items by a Chinese person (including a natural person and a legal person) and a Chinese organization of another kind.

A previous version of the export control law talked about the re-export of controlled items or foreign products including Chinese controlled items from abroad to 3rd countries. As a result, a calculation of De Minimis would have been necessary. This is no longer provided for.


What items are covered? "Subject to" Chinese export control law considers the following items and goods in scope:

  1. Dual-Use Items

  2. Military Items

  3. Nuclear Items;

  4. Other goods, technologies, and services pertaining to fulfilling international obligations and defending national security.

Control & Entity Lists

There appear to be three authorities, each is responsible for formulating, publishing, and maintaining its own control list. There is also a provision for an entity lists (article 20), however, it is yet to be understood if this list will be published externally.


Internal Compliance Programs Exporters shall establish the Internal Compliance Program. For those who have effective ICPs and without major violation record, facilitation measures will be granted in the licensing process (Article 14). Read more about ICPs

End-Use & End-User Certificate There is a licensing requirement for end-use and for the end-user certificate. These must be issued by the end-user or the government agency of the country where the end-user is located and submitted by the exporter to Chinese export control authorities (Article 17) Penalties The penalty for export without a license ranges from RMB 500,000 – 5,000,000. Companies or individuals found in breach of the law can also have export privileges revoked for five years, or for the rest of their lives if convicted on criminal charges.


Getting Support Economic operators can establish or participate in the Chamber of Commerce, association, or other kinds of organizations for export control compliance support (Article 7 of the 2nd draft)

Consultation

Competent authorities shall respond in time to the inquiries made by exporters regarding whether or not an item in question is subject to the jurisdiction of this law (Article 16)

Resources

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