Karl Zhang
On October 17, 2020, the Standing Committee of the 13th National People’s Congress adopted the Export Control Law of the People’s Republic of China (the “Export Control Law”), which came into effect on December 1, 2020. The main contents of the “Export Control Law” are as follows.
I. Scope of Application and Definitions
Export control refers to the prohibitive or restrictive measures enacted by the government in relation to the outbound transfer of controlled items from the territories of the People’s Republic of China to foreign countries, and the supply of such items to foreign organizations and individuals by citizens, legal persons and unincorporated organizations of the People’s Republic of China. Dual-use items refer to goods, technologies and services that have both civilian and military uses or contribute to the strengthening of the military’s potential, especially those that can be used in the design, development, production or use of weapons of mass destruction and their means of delivery. Military goods refer to equipment, specially produced equipment and other related goods, technologies and services used for military purposes. Nuclear means nuclear materials, nuclear equipment, non-nuclear materials for reactors and related technologies and services.
The state’s export control of dual-use items, military goods, nuclear and other goods, technologies, services related to the maintenance of national security and interests, as well as its fulfillment of international obligations such as non-proliferation of such items (collectively the “Controlled Items”), shall be governed by the Export Control Law.
II. Control policies, lists and measures
The state’s export control authority will develop and amend the export control list for the Controlled Items in conjunction with the relevant authorities and make timely announcements in accordance with the e Export Control Law, other relevant laws and administrative regulations, and the export control policies.
The state will implement a licensing system for the export of the Controlled Items. Exporters should apply to the national export control authority for a license to export the Controlled Items on the export control list or the temporary controlled items. For the Controlled Items on the export control list, goods, technologies and services other than temporary controlled items, as well as the relevant goods, technologies or services that the exporter knows and should know, or is informed by the national export control authority as likely to present the following risks, the exporter should apply to the national export control authority for a license: (1) undermining national security and interests; (2) being used in the design, development, production or the use of weapons of mass destruction and their means of delivery; or (3) being used for terrorism purposes. If an export operator is uncertain whether the goods, technologies and services to be exported fall within the scope of the Controlled Items under the Export Control Law and makes inquiries to the national export control authority, the national export control authority shall respond in a timely manner.
The national export control authority shall review an export operator’s license application for the export of the Controlled Items and make a decision while taking into account the following factors: (1) national security and interests; (2) international obligations and external commitments; (3) type of export; (4) sensitivity of the Controlled Items; (5) destination country or region for the export; (6) end user and end use; (7) relevant credit history of the export operator; and (8) other factors stipulated by laws and administrative regulations.
An export operator shall submit to the national export control authority documents issued by the end user or by the government agency of the country or region where the end user is located certifying the end user and end use of the Controlled Item. The end user of the Controlled Item shall undertake not to change the end use or transfer the Controlled Item to any third party without the permission of the national export control authority.
The national export control authority for dual-use items will be accepting applications for the export of dual-use items, reviewing applications for the export of dual-use items on its own or in conjunction with other relevant authorities in accordance with the Export Control Law and other relevant laws and administrative regulations. A decision on the application shall be rendered within the statutory period of time. In cases where a license is granted, the licensing authority that shall issue the export license.
The state shall implement an exclusive system for the export of military items. Operators engaged in the export of military items shall obtain an exclusive license for exporting military items and operate such business within the permitted scope of operation. The exclusive license for exporting military items shall be reviewed and granted by the national authority for the export control of military items.
III. Supervision and administration
The national export control authority shall, in accordance with the law, supervise and inspect the export of the Controlled Items. The national export control authority may take the following measures to investigate suspected violations of the Export Control Law: (1) entering the business premises of the parties under investigation or other relevant places to carry out the investigation; (2) interviewing the parties under investigation, interested parties and other relevant organizations or individuals, as well as requesting them to provide explanations related to the investigated matters; (3) examining and duplicating the relevant vouchers, agreements, accounting books, business correspondence, and other documents and data of the parties under investigation, interested parties, or other relevant organizations or individuals; (4) checking the transportation vehicles used for the export, stop the loading of suspicious items for export, and order the return of illegally exported items; (5) seizure and confiscation of relevant items involved in the investigation; and (6) examining the bank accounts of the parties under investigation. The measures set forth in Subparagraphs (5) and (6) above shall be approved in writing by the responsible persons of the national export control authority.
In addition, the Export Control Law also provides for penalties for export violations by relevant operators.