China publishes Export Control Law

On 17 October 2020, China officially approved the Export Control Law (ECL), which will come into effect on 1 December 2020. The ECL sets out the basic framework of a unified export control regime that grants wide powers to the authorities to implement such controls.

The key features of ECL include, for Controlled items:

Dual-use items
Military items
Nuclear items, and
Other goods, technologies, services and items relating to the maintenance of national security and interests and compliance with international obligations such as non-proliferation
For the export of any goods, technologies or services that are not Controlled Items on the export control lists or the items subject to temporary control and that may have any of the following risks of which an export operator is or should be aware or is notified by the State Export Control Administrative Departments (SECADs) (1) endangering national security or national interests; (2) being used for the design, development, production or use of weapons of mass destruction and their delivery vehicles; or (3) being used for terrorist purposes.

Temporary control

The SECADs may exercise temporary control over any goods, technologies and services outside the export control lists, and make an announcement of such. A temporary control can be enforced for a term of up to two years. Before the expiration of the temporary control term, an assessment shall be carried out in a timely manner, and, depending on the assessment results, a decision on cancellation of temporary control, extension of temporary control, or inclusion of items under temporary control in the export control lists shall be made.

Controlled activities and extraterritoriality

Export - The transfer of any Controlled Items out of China, includes both physical and electronic transfers.

Re-export - The transit, transshipment, and through shipment, re-export of any Controlled Items or the export of any Controlled Items from bonded areas, export processing zones, and other areas specially regulated by the customs and regulated bonded places such as regulated export warehouses and bonded logistics centers.

Deemed export - The provision of any Controlled Items by any citizens, legal persons, or non-corporate organizations of the People’s Republic of China to any foreign organizations and individuals.

Facilitating violations - No organizations or individuals shall provide any agency, shipping, delivery, customs clearance, third-party e-commerce trading platform and financial services for any export operator engaging in any export control violations.

Risk management system for end-users and end-uses

Evaluate and review (i) end-users and (ii) end uses of controller items
Implement a strict management of (i) end-users and (ii) end uses
Establish a restricted (or control) list for importers and end-user that: a) violate the requirement regarding the management of (i) end-user and (ii) end-uses, b) may endanger national security, or c) Use controlled items for terrorist purposes.

Export operators shall not enter into any transactions with any importer or end-user that is included in the restricted list in violation of the rules. If an export operator has a true need to enter into a transaction with an importer or end-user on the restricted list, it can submit an application to the SECADs.

Licensing regime and consultation

For the export of Controlled Items listed on the control lists and the items subject to temporary control, export operators shall apply for a license to the SECADs. The SECADs will take all of the following factors into account in reviewing an export operator’s application for the export of Controlled Items, and make approval or non-approval decision:

national security and national interests;
international obligations and commitments;
type of export;
sensitivity of the items;
destination country or region of the export;
end-users and end-use;
credit record of the export operator;
other factors provided in laws and administrative regulations.

If an export operator is unable to confirm whether any goods, technologies and services to be exported are Controlled Items under this Law, and consult with the SECADs for that, the SECADs shall respond in a timely manner.

International countermeasures

If any country or region abuses export control measures to endanger the national security and national interests of the People’s Republic of China, the People’s Republic of China may, based on the actual situation, take reciprocal measures against that country or region.