- Chinese Export Control Law has become effective
- Practical implications of the new Chinese Export Control Law
I. Chinese Export Control Law has become effective
The new unified Chinese Export Control Law will become effective on December 1st. It has a significantly expanded scope. “Controlled items” are defined to include dual-use items (with both civilian and military applications), nuclear materials and military products. Also, “controlled items” are “other goods, technologies, services, etc., that are related to the maintenance of national security and interests and the implementation of international obligations such as non-proliferation.”
In addition to that, there a new far-reaching control powers and fines if provisions of the Chinese Export Control Law are violated. This new law will have considerable effects on export trade. And it does not matter whether businesses have a branch in China. The new Export Control Act has a particularly extraterritorial approach. In the future, companies with and without a branch in China will be subject to comprehensive Chinese export controls. Now, all goods that could endanger the national security and national interests of China are relevant.
II. Practical implications of the new Chinese Export Control Law
The new Chinese export control law has a considerably wider scope than under the previous legal situation. The use of vague legal terms (“national interests and national security” – we know this from the Chinese Biosecurity Law) offers the government a wide margin of discretion. Authorities will probably make use of their control and intervention powers intensively. Detailed implementation regulations from the authorities are yet to come. Hence, the extended control powers will likely lead to sanctions. Even negligent violations could cause severe fines.
In a questionable manner, the Chinese Export Control Law obliges exporters to assess independently whether a delivery of goods might sufficiently implicate national security or national interests to require a license (even if the product is not listed on any control list). Companies with business in China will have to take this new law seriously.
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