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On September 30, 2024, China issued PRC Regulations on the Export Control of Dual-use Items (dual-use items regulations or regulations), which became effective on December 1, 2024. These regulations, based on the Export Control Law promulgated in October 2020, are set to significantly impact global supply chains, particularly those involving goods, technologies and services that can be used for both civil and military purposes.
Key elements of the regulations
The dual-use Items regulations adopt the same definition of dual-use items as the Export Control Law, encompassing goods, technologies and services that can enhance military potential or be used in the development of weapons of mass destruction. The regulations introduce several critical measures:
- Export license. Exporters must obtain an export license for dual-use items subject to export control.
- Risk management system. A system for managing risks associated with end-users and end-uses is required.
- Watch list and control list. Enhanced oversight of entities and transactions that could pose risks to national security must be put in place.
Unified list of dual-use items
Article 11 of the regulations authorizes the Ministry of Commerce to formulate and publish a unified list of dual-use items subject to export control (unified list). This list will be implemented simultaneously with the regulations and is expected to consolidate existing measures and catalog documents into a unified system. This could streamline the export control process but also introduce new compliance challenges for supply chain managers.
Prior to the issuance of the regulations, the Ministry of Commerce and the General Administration of Customs have been jointly issuing and regularly updating the catalogs for the administration of dual-use Items and technology import and export permits under China’s existing export control framework. The latest and currently effective version was issued in December 2023, taking effect from January 1, 2024. In our previous article, “Tomorrow’s supply chain: China imposes restrictions on export of gallium and germanium-related products” we discussed the July 3, 2023, joint announcement of the PRC Ministry of Commerce and General Administration of Customs regarding the export control of gallium- and germanium-related products. The export control restrictions set forth by this joint announcement have been fully incorporated into the latest catalog, listing such gallium- and germanium-related products as special dual-use items and technologies.
- Starting now, exporters must obtain licenses for dual-use items, with Ministry of Commerce publishing unified list
- Regulations require detailed documentation of end-users and end-uses for export licenses, and Ministry of Commerce must authorize changes
- Regulations introduce watch and control lists, restricting non-compliant entities and prohibiting control list entities from acquiring PRC dual-use items