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After years of deliberation, and in accordance with the National
People's Congress; The People's Republic of China, by order of the
President, has confirmed a new Export Control Law for the purpose
of safeguarding national interest and security and preventing the
proliferation of potential weapons of mass destruction. This Export
Control Law pertains to any entities, citizens, legal persons or
incorporated organization's shipping 'controlled items' from the
People's Republic of China overseas. It also applies to the
transit, transshipment, through transportation and re-export of
controlled items through the country.
The controlled items within the regulation focus on the
following categories: Nuclear dual-use items, Missile items,
Biological dual-use items, controlled Chemical and Chemical
precursor items and Military items. The emphasis on these goods is
accredited by the fact that the People's Republic of China is a
valued member of the Nuclear Suppliers Group (NSG), Biological
Weapons Convention (BWC) and Chemical Weapons Convention (CWC). The
country's focus on controlling the exports of missile goods and
technology aligns with the standards adhered to by the country
members in the Missile Technology Control Regime (MTCR), although
they are not a member.
In addition to listing the items under export control, this
regulation details the factors that will be influential in the
decision to grant export licenses to any exporter wishing to trade
controlled items overseas. These include:
Confirming the trade of goods does not affect National Security
and Interest
Confirming the trade of goods is in line with International
commitments and obligations
The type of export
The 'sensitivity' of the controlled item
The destination country or region of the exported goods
End-user and end-use
The credit records of the exporter
To expand on reference point six above; when applying for an
export license, the exporter is required to alongside the importer
provide certified documentation detailing the end-user and end-use
of the controlled item to the State Export Control Authority of
China. The end-user is then required to agree not to change the
end-use of the control item or transfer the item to a third party.
The State Export Control Authority maintain an 'End-user Control
List' of importers and end-users, adding entities who violate the
terms and conditions over end-use. They have the authority to
prohibit, restrict or suspend trade of those controlled items to
the importer and end-user. The State Export Control Authority can
at short notice, implement temporary export controls on items that
are not included in the new Export Control Law. This is an added
measure to safeguard national interest and security outside the
scope of the regulation.
This regulation will come into force on 1 December 2020.
Posted 03 November 2020 by Ravi Amin, Trade Compliance Subject Matter Expert, Maritime, Trade & Supply Chain, S&P Global Market Intelligence
