Principles of the Chinese export control law

On December 1, 2020, the PRC’s new export control law came into effect. It was so adopted by the National People’s Congress of the PRC on October 17, 2020. It is the first national export control law of the PRC. The previously applicable regulations were previously found in various laws and administrative regulations.

Firstly, the new requirements apply to companies that export controlled goods from China or process them as intermediate or end products and then re-export them. On the other hand, companies that hold shares in Chinese companies also have to comply with the rules.

The new provisions regulate the export of
dual-use goods according to the dual-use goods list 2022 of MOFCOM (1),
military goods (2),
nuclear goods (3) and
other goods, technology, or services related to the maintenance of national security and interests and the fulfillment of anti-proliferation and other international obligations (4).

The scope of application of the law includes both the transfer of controlled goods out of Chinese territory, as well as the making available of controlled goods by Chinese nationals, legal entities or other persons or other organizations to foreign individuals, legal entities or other organizations. It also applies to the transit, transshipment, transit, shipment, re-export and export of goods from a bonded area or special customs zone.

Implementing regulations and an official translation of the PRC Export Control Law adopted on October 17 are not yet available. An unconfirmed translation can be found on the National People’s Observer website.

The regulations also explicitly provide for extraterritorial scope, that is, local scope not limited to the territory of the People’s Republic of China. Under Article 44, organizations and individuals outside China will be held accountable if they violate export control regulations, harm China’s national security or interests, or impede the implementation of nonproliferation commitments. A similar measure is found in the United States export control regime. However, specifications for the practical application of this article are not yet existent.

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