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  • The new law establishes a unified export control system. “Export” governed by the law includes not only the transfer of controlled items from within the territory of the PRC to outside of the PRC but also the provision of controlled items by any PRC citizens, legal person or non-legal person organizations to any foreign organizations and individuals (similar to the “deemed export” concept under the U.S. export control regulations but covers a broader scope of items).
  • The controlled items under the law include not only dual-use items, military items, and nuclear items, but also “other items related to the maintenance of national security and interests, and the performance of international obligations such as non-proliferation. “Goods, technology, services, etc.” and data related to those items are all included in the controlled items.
  • While most of the penalties are imposed on exporters (including Chinese domestic and foreign invested enterprises incorporated in the PRC) that violate the law, the law also clearly provides that it will be applied extraterritorially to any foreign organization or individual outside of the territory of the PRC that violates the provisions of the law and empowers the enforcement authority of the law with the power to investigate the violation and hold the foreign violating party liable.

After submission for review and discussion at the 22nd session of the Standing Committee of the 13th National People’s Congress of the People’s Republic of China (PRC), the final version of the long-awaited Export Control Law of the PRC was passed and enacted on October 17, 2020, with an effective date of December 1, 2020.

The first and second drafts of the Export Control Law were published for public comment in June 2017 and December 2019, respectively. In June 2020, a revised draft was submitted to the NPC Standing Committee for a second review. Within less than four months, the law was formally enacted after a third review.

As compared to the latest draft published in June of 2020, the final law makes the following updates of note:

  • The law further emphasizes the importance of safeguarding national security and interests of the PRC as a priority.
  • Those engaged in export-control violations will be subject to not only administrative penalty but also criminal responsibility.
  • The law clarifies that technical data related to the items covered by the law is also subject to export control regulation.
  • Exporters are encouraged to establish and improve internal export control compliance systems. Subsequent implementing rules and/or export control guidelines will be issued to guide exporters to comply with the law during operations.
  • Exporters may apply with the enforcement authorities if they have a special need to conduct transactions with importers and end-users listed in the control list.

This alert introduces the key points of the Export Control Law.


1.1 Controlled Items
The Export Control Law regulates “Controlled Items” defined as dual-use items, military items, nuclear items and other goods, technologies, services and items relating to the maintenance of national security and interests and performance of anti-proliferation and other international obligations. Controlled Items also include technical data related to the above-described items.

1.2 Controlled Export
Export control under the law means the prohibitive or restrictive measures taken by the PRC State against (i) the transfer of any Controlled Items from within the territory of the PRC to outside of the PRC, and (ii) the provision of any Controlled Items by any citizens, legal persons or non-legal person organizations of the PRC to any foreign organizations and individuals. Item (ii) is similar to the concept of “deemed export” under the U.S. export control regime. This could affect information exchanges between Chinese employees and employees of foreign nationalities within the same entity. Further, it may cover any transfer of Controlled Items outside the territory of the PRC from a PRC citizen or entity to a foreign organization or individual.

Article 45 of the law also includes a general provision on “re-export” that the transit, transshipment and through shipment, re-export of any Controlled Items or the export of any Controlled Items from bonded areas, export processing zones and other areas specially regulated by the customs and regulated bonded places such as regulated export warehouses and bonded logistics centers shall be governed by the applicable provisions of this law. However, the Export Control Law does not include further explanations as to how this provision will be implemented. We anticipate this issue to be addressed in any implementing measures or guidelines to be formulated under the Export Control Law.


The Export Control Law establishes a unified export control system that consists of three key parts: control policy, control lists (including controlled item list and controlled party list), and control measures (e.g., export license).

2.1 Control Policies
Article 5 of the law provides that departments under the State Council and the Central Military Commission that perform export control functions will be the enforcement authorities and regulators (Regulators) of the export control system although the law does not identify the specific departments. We anticipate that Ministry of Commerce will play a leading role and the Regulators will also involve various ministries in charge of different key industries.

The Regulators have the power to formulate export control policies with relevant government departments, among which, important policies shall be approved by the State Council or jointly by the State Council and the Central Military Commission.

2.2 Controlled Item List
Article 9 of the law provides that the Regulators shall work with the relevant departments pursuant to required procedures to establish and adjust export control list(s) for Controlled Items (Controlled Item List) and promptly publish such list(s) in accordance with the provisions of this law and relevant laws and administrative regulations, as well as export control policies.

The law empowers the Regulators to designate goods, technologies and services outside the Controlled Item List as a “Temporarily Controlled Item” for a period of up to two years, subject to approval by the State Council or joint approval by the State Council and the Central Military Commission. An assessment shall be conducted before the expiration of the temporary control period to determine whether the temporary control shall be cancelled or extended, or the Temporarily Controlled Item shall be listed in the Controlled Item List.

In addition, the Regulators also have the power to work with other relevant departments to prohibit the export of the relevant Controlled Items, or prohibit the export of the relevant Controlled Items to specific destination countries and regions or specific organizations and individuals, subject to approval by the State Council or joint approval by the State Council and the Central Military Commission.

2.3 Control Measures
The key control measures established under the Export Control Law are found in the export licensing system.

Article 12 of the law provides that an “exporter” (also translated as “export operator”, “出口经营者” in Mandarin) must apply to the Regulators for a license for the export of Controlled Items and Temporarily Controlled Items.

For the export of goods, technologies and services that are not Controlled Items and Temporarily Controlled Items, an exporter must still apply for an export license if it knows or should know, or is notified by the Regulators that the export of such goods, technologies and services may pose the following risks:

(i) endangering national security and interests;

(ii) potentially used in the design, development, production or use of weapons of mass destruction and their delivery vehicles;

(iii) potentially used for terrorist purposes.

The Regulators shall take all of the following factors into consideration in reviewing any application made by an exporter and making a decision to approve or not approve the application:

(i) national security and interests;

(ii) international obligations and commitments;

(iii) type of export;

(iv) sensitivity of the items;

(v) destination country or region of the export;

(vi) end users and end use;

(vii) credit record of the exporter;

(viii) other factors provided in laws and administrative regulations.

2.4 End-User and End-Use Risk Management
Article 17 of the Export Control Law provides that the Regulators shall establish a risk management system for end-users and end uses of Controlled Items and evaluate and review end-users and end uses of Controlled Items to implement strict management of end-users and end uses.

An exporter is required to submit documents certifying end-users and end uses as part of its application package, and the relevant certifying documents shall be issued by the end-user or a national or regional government agency where such end-users are located. If an exporter or importer becomes aware of any possible change to the reported end-users or end use, it shall immediately report to the Regulators.

2.5 Controlled Party List
The Regulators shall establish a “Controlled Party List” to include importers and end-users that:

(i) violate the requirements regarding the management of end-users and end uses;

(ii) may endanger national security and interests; or

(iii) use Controlled Items for terrorist purposes.

For importers and end users that are included in the Controlled Party List, the Regulators may take necessary measures such as prohibiting or restricting the relevant transactions relating to Controlled Items, ordering suspension of export of the relevant Controlled Items and other necessary measures. Such Controlled Party List is somewhat similar to the Entity List maintained by the U.S. Department of Commerce’s Bureau of Industry and Security.

Exporters are prohibited from entering into any transactions with any importer or end-user that is designated to the Controlled Party List in violation of the rules. Exporters may apply with the regulators if they have a special need to conduct transactions with such designated importers and end-users. Any designated importers and end-users may apply with the Regulators to be removed from the Controlled Party List if none of the circumstances described under items (i) to (iii) above exist and the Regulators have the authority to make a decision based on actual circumstances.


3.1 Administration

The Export Control Law empowers the Regulators to take the following investigative measures against any suspected violation of any provisions of the law:

(i) entering the business site or any other relevant site of the investigated person for inspection;

(ii) interviewing the investigated person, interested parties, or other relevant organizations or individuals, and requesting them to provide explanations relating to the investigated matters;

(iii) examining and duplicating the relevant documents, agreements, accounting books, business correspondence and other documents and information of the investigated person, interested parties or other relevant organizations or individuals;

(iv) checking the delivery vehicles used for the export, preventing the loading of suspicious export items, and ordering the withdrawing of illegally exported items;

(v) confiscating and seizing the relevant items involved in the investigation; and

(vi) examining the bank accounts of the investigated person.

Measures described under items (v) and (vi) above can only be taken with the written approval of the person in charge of the Regulators.

3.2 Penalties
Most of the penalties under the law are imposed upon the exporter and/or its responsible person for violating provisions of the Export Control Law. Depending on the specific violation, one of more of the following penalties could be imposed:

(i) warning;

(ii) order to stop illegal activities;

(ii) confiscation of illegal gain;

(iv) monetary fine;

(v) suspension of business;

(vi) revocation of export business qualification;

(vii) revocation of export license.

For an exporter that is punished for any violation of the Export Control Law, from the date when the penalty decision becomes effective, the Regulators may refuse to accept any export license application by such exporter within five years. Any person directly responsible for the violation or any other directly responsible persons may be prohibited from engaging in relevant export operation activities within five years. The Regulators shall include the exporter’s violation in its credit record.

Article 43 of the law further provides that those who export Controlled Items that are prohibited from export or without a license in violation of this law will be investigated for criminal responsibility. Any person who receives any criminal penalty for any export control violation will be prohibited from engaging in relevant export operation activities during his/her lifetime.


In addition to the above, below are a few other points worth noting about the Export Control Law.

4.1 Internal Compliance Program
Exporters are encouraged to establish an internal audit system for export control compliance. If such system is established and functions well, the Regulators may grant licensing facilitation measures such as a general license for the export of the relevant Controlled Items by the exporter.

4.2 Obligations of Intermediaries
Article 20 of the law provides that no organizations or individuals shall provide any agency, shipping, delivery, customs clearance, third-party e-commerce trading platform and financial services for any exporter engaging in export control violations.

If any person provides any such services for an exporter in the circumstances of knowing of said exporter’s engagement in export control violations, the Regulators will issue a warning, order that the violation be stopped, confiscate any illegal income, and impose a fine.

4.3 Extraterritoriality
Article 44 confirms the extraterritoriality of the Export Control Law, which provides that an organization or individual outside of the territory of the PRC that violates the provisions of the law in relation to administration of export control, endangers the national security and interests of the PRC, or hinders the performance of non-proliferation and other international obligations, shall be subject to investigation and legal liability.

As noted above, the law also contains a general provision regarding “re-export” and provisions on end-user and end-use risk management which may be implemented extraterritorially in the future.


China has been actively developing and enhancing its export control regime in the past year.

On August 28, 2020, PRC authorities released the updated Catalogue of China’s Export Prohibited and Restricted Technologies (see our client alerts here and here) to add new restricted technology items (such as space materials to 3D printing, encryption and large-scale high-speed wind tunnel design) and revise control points and technical parameters of certain technology items.

On September 19, 2020, China’s Ministry of Commerce published the Provisions on the Unreliable Entity List (see our client alert here) to provide the framework and working mechanism for the identification by the PRC government of foreign entities or individuals to be designated to the Unreliable Entity List.

The passing of the Export Control Law demonstrates the latest efforts of the PRC to enhance its export control regime and use export control as a tool to protect national security and interests. We anticipate that the formulation of new implementing measures and control lists and the adjustment of existing regulations and control catalogues will follow.

Chinese domestic companies and foreign invested companies in the PRC are encouraged to establish and improve their internal export control compliance policies and programs to better analyze their own products, services and technologies, review and filter business partners and end users, and establish internal export control reviews and reporting mechanisms and risk analyses and control systems. Further, training of employees on export control requirements is essential. Foreign companies and organizations that have business related to the PRC are recommended to follow the development and implementation of China’s export control law and update their export control compliance policies to ensure compliance with the export control law of China.

We will closely follow the development of China’s export control regime and advise our Chinese and foreign clients in a timely manner.

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