Discover how China's new export control measures on graphite will impact the supply chain for essential materials in electric car production. Read China's official notice.
Newspapers, such as Reuters, report that China has announced that it will require export permits for certain graphite products in an unexpected move aimed at controlling the supply of a critical mineral and is in response to challenges over China's global manufacturing dominance.
China is the world's top producer and exporter of graphite, and it refines more than 90% of the world's graphite into the material that is used in electric vehicle (EV) battery anodes. This negatively charged portion of a battery is crucial for EVs to operate. China's graphite restriction is the third restrictive measure since August when China reduced exports of two chip-making metals, gallium and germanium.
As a result of the restrictions, the export of graphite and graphite products may soon require export permits.
We understand that China's commerce ministry has said that the move on graphite was "conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests".
It added that it was not targeting any specific country. According to Chinese customs data, top buyers of graphite from China include Japan, the United States, India and South Korea.
Details of new restrictions
Under the new restrictions, China will require exporters to apply for permits to ship
two types of graphite, including
high-intensity synthetic graphite material,
and natural flake graphite and its products.
Three types of "highly sensitive" graphite items had already been under temporary controls, the commerce ministry said, and are included in the new list.
No restrictions on less sensitive graphite products
Meanwhile, China dropped temporary controls on five less sensitive graphite items used in basic industries such as steel, metallurgy, and chemicals.
Consequences of the new export control
This new graphite export curb means that South Korean firms which heavily rely on China for graphite imports would need to seek alternatives, such as mines from the United States or Australia, but it would likely increase the cost burden for many.
MOFCOM Press Release
Announcement of the Ministry of Commerce and the General Administration of Customs on Optimizing and Adjusting Temporary Export Control Measures for Graphite Items
[Issuing Unit] Bureau of Safety and Control
[Issue Number] Ministry of Commerce and General Administration of Customs Announcement No. 39 of 2023
[Issue Date] October 20, 2023
In accordance with the relevant provisions of the Export Control Law of the People's Republic of China, the Foreign Trade Law of the People's Republic of China, and the Customs Law of the People's Republic of China, in order to safeguard national security and interests, and with the approval of the State Council, it was decided to impose restrictions on the Ministry of Commerce, the State Commission of Science, Technology and Industry for National Defense, and the Customs The scope of items listed in the General Administration Announcement No. 50 of 2006 ( " Decision to Implement Temporary Export Control Measures on Graphite Related Products " ) has been optimized and adjusted , and export controls have been implemented on some items . The relevant matters are announced as follows:
1. Items that meet the following characteristics may not be exported without permission :
(1) High-purity (purity >99.9%) , high-strength (flexural strength >30Mpa ), high-density (density >1.73g / cubic centimeter) artificial graphite materials and their products (refer to customs commodity numbers: 3801100030 , 3801909010 , 6815190020 ).
(2) Natural flake graphite and its products (including spheroidized graphite, expanded graphite, etc.) (refer to customs commodity numbers: 2504101000 , 2504109100 , 3801901000 , 3801909010 , 3824999940 , 6815190020 ).
2. In addition to the above items, other items in the Announcement No. 50 of 2006 ( " Decision to Implement Temporary Export Control Measures on Graphite Related Products " ) issued by the Ministry of Commerce, the State Commission of Science, Technology and Industry for National Defense, and the General Administration of Customs have canceled temporary export controls.
3. Export operators should handle export licensing procedures in accordance with relevant regulations, apply to the Ministry of Commerce through the provincial commerce department, fill in the dual-use items and technology export application form and submit the following documents:
(1) The original of the export contract or agreement or a copy or scanned copy that is consistent with the original;
(2) Technical description or test report of the items to be exported;
(3) End user and end use certification;
(4) Introduction to importers and end users;
(5) Identity certificates of the applicant’s legal representative, main business manager and person in charge.
4. The Ministry of Commerce shall conduct an examination from the date of receipt of the export application documents, or shall conduct an examination in conjunction with relevant departments, and make a decision to approve or disapprove within the statutory time limit.
The export of items listed in this announcement that have a significant impact on national security shall be submitted to the State Council for approval by the Ministry of Commerce in conjunction with relevant departments.
5. If the license is approved after review, the Ministry of Commerce will issue an export license for dual-use items and technologies (hereinafter referred to as the export license).
6. Export license application and issuance procedures, handling of special circumstances, document retention period, etc. are in accordance with the Ministry of Commerce and the General Administration of Customs Order No. 29 of 2005 ( " Measures for the Administration of Import and Export Licenses for Dual - Use Items and Technologies") The relevant regulations are implemented.
7. Export operators shall issue export licenses to the customs, handle customs procedures in accordance with the provisions of the Customs Law of the People's Republic of China, and accept customs supervision. The customs will handle the inspection and release procedures based on the export license issued by the Ministry of Commerce.
8. If an export operator exports without permission, exports beyond the scope of permission, or commits other illegal acts, the Ministry of Commerce or Customs and other departments will impose administrative penalties in accordance with relevant laws and regulations. Constitute a crime, be held criminally responsible.
9. This announcement will be officially implemented from December 1 , 2023. The Ministry of Commerce , the State Commission of Science, Technology and Industry for National Defense, and the General Administration of Customs Announcement No. 50 of 2006 ( " Decision to Implement Temporary Export Control Measures on Graphite Related Products " ) will be abolished at the same time . .
Ministry of Commerce and General Administration of Customs
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