Update on the China Export Control Law – lists updated and/or published

22/06/21

This article is an update of China Export Control Law to take its effect per 1 December 2020.

The People’s Republic of China Export Control Law (ECL) has taken effect as of the 1st of December 2020 (please also see our previous news flash on this subject). As mentioned in the previous news flash, it is important to monitor the developments of the ECL, especially the export control lists formulated. As such, please note that various lists have been updated and/or published in the last couple of months, in which items are included that are prohibited, restricted and/or subject to import or export licensing. It is in this respect important to note that the lists/regulations published have a broad scope and, in some cases, a specific focus on technologies.

What does this mean for your business?

The following 4 lists/regulations have been published so far:

China’s Catalog of Technologies Prohibited and Restricted from Export (effective from 28th of August 2020)
Provisions on the Unreliable Entity List (effective from 19th of September 2020)
Announcement on the release of commercial Cryptography Import Licensensing List and Export Control List (effective from 1st of January 2021)
Catalog of Dual-use items and technologies subject to import & export licensing administration (effective from 1st of January 2021)
Next to the above, it is also expected that the authorities will in the near future publish a list with end-destinations and/or end-users that are prohibited and/or restricted.

As mentioned, the China Export Control Law has a broad scope and also aims to target the export of technologies. It is for example good to note that the "China's Catalog of Technologies prohibited and restricted from Export" has been updated and now includes technologies such as: 3D printing, cipher security, Artificial Intelligence (e.g. voice recognition), intelligent reading, etc. Companies operating a Research & Development function/department in China are therefore highly recommended to review their operations against the China Export Control Law to determine whether their business is impacted in any way. Please note that also (the transfer of) technical know-how and/or data with respect to, for example, machinery, could fall within the scope of the China Export Control Law, and as such could be subject to export control.

Another item to take into consideration is that the China Export Control Law differs from other Export Control Regulations, such as the EU dual-use regulation or EAR, in the sense that it is based upon the Harmonized System. The correct classification of products right from the start is therefore very critical.

How can we help?

It is highly recommended that businesses review their supply chain and evaluate whether the export (which includes the transfer of data, knowledge, etc) of their intangible or tangible goods in any way may be affected by the China Export Control Law. In addition, due to the extraterritorial effect of the China Export Control Law, it is important to assess if, and if so to which extent, it has an impact on your business.

Furthermore, it can be worthwhile to assess whether implementing a trade automation system would be beneficial for your company, that would help your business to be compliant with the rules of the ECL and also with export control regulations of other countries, such as the EU, which is expected to be updated soon. Together with our export controls specialists in China, we can assist with assessing the impact of the ECL on your business and provide guidance on the interpretation of the rules.