China’s New Export Control Regulations on Dual-Use Items

In a significant move, China has issued new regulations governing the export control of dual-use items, effective from December 1, 2024. With six chapters and 50 articles, these new regulations are designed to strengthen national security while promoting high-quality development. However, for businesses involved in exporting to and from China, failing to stay informed and compliant with these changes could lead to serious consequences – such as heavy fines, trade restrictions, or even loss of market access.

To avoid these risks, it’s essential to understand the key updates and adjust your operations accordingly. Below is an overview of the major changes and what they mean for your business.

What Exactly Are Dual-Use Items and Why Do They Matter?

Dual-use items refer to goods, technologies, and services that can be used in both civilian and military contexts. These items are critical to national security, particularly when they contribute to the development or production of weapons of mass destruction or their delivery systems. The new regulations reinforce China's commitment to controlling these items to prevent their unauthorized use or transfer.

What’s New in China’s Export Controls? 

The regulations provide detailed guidelines that must be followed by both domestic and foreign businesses involved in the export of dual-use items. Key provisions include:

• Licensing Requirements: Exporters will need a license to export dual-use items listed in China’s export control list or those subject to temporary control measures.
• Risk Management System: The commercial administration department of China’s State Council will establish a risk management system to evaluate and verify the end-users and end-uses of dual-use items.
• Restrictions on End-Use and Transfers: End-users cannot change the use of dual-use items or transfer them to third parties without the commerce department’s prior consent.
• Reporting Requirements: Chinese individuals and entities must report any requests from foreign governments for visits or inspections relating to export controls.
• Foreign Compliance: Foreign businesses may be required to comply with these regulations if involved in transferring or providing Chinese dual-use items, ensuring accountability on a global scale.

China’s Approach to Enforcement: What Businesses Need to Know

China’s enforcement mechanisms for the new regulations are stringent, ensuring that dual-use items are managed responsibly. Here’s how compliance will be monitored:

Control List for Violators

The new regulations introduce a control list that includes importers or end-users found violating the end-use or end-user agreements. Companies listed will face restrictions on transactions involving dual-use items, and in severe cases, transactions may be completely prohibited. This list is designed to safeguard national security and prevent the unauthorized use of controlled items.

Supervision and Inspection

The State Council’s commerce department, in collaboration with other state authorities, will conduct regular inspections to ensure compliance with the new regulations. Companies failing to meet the requirements could face legal action, including penalties for exporting items without proper authorization or engaging in unauthorized transactions.

Legal Liabilities

Violations of the new regulations will carry significant legal consequences, including fines and potential criminal charges. Companies exporting dual-use items without the required licenses or using deceptive means to obtain documentation could face severe penalties.

Future-Proofing Your Trade Operations

China’s new export control regulations signal a significant shift in how dual-use items are managed. Understanding these regulations and adapting to the requirements is crucial for companies involved in global trade. With expert support from CATTS, businesses can confidently navigate the complexities of these new regulations, ensuring compliance and optimizing their global trade strategies. For more details, refer to the Order of the State Council of the People'sRepublic of China or reach out to us for assistance.