China: Decree No. 792 of the state council on the regulations of the People's Republic of China on export control on dual-use items
Date of publication: October 22, 2024
On September 30th, 2024, the State Council of China promulgated Decree No. 792 on “
The Regulations of the People's Republic of China on Export Control of Dual-Use Items
” which were adopted on September 18th, 2024, and will take effect on December 1st, 2024. They are designed to safeguard national security, fulfil international obligations, and standardise export controls on dual-use items, which have both civilian and military applications. The Decree will take effect on December 1st, 2024.The Decree No. 792 consists of six chapters with 50 articles. Here is the summary of those.
- General provisions
- Establishes a framework for export control of dual-use items, emphasizing national security and international obligations.
- Defines dual-use items as goods, technologies, and services with both civilian and military uses.
- Regulatory policy
- The State Council’s Commerce Department formulates and adjusts export control policies and lists.
- Temporary controls can be implemented for up to two years, with possible extensions.
- Control measures
- A licensing system is in place for exporting dual-use items from the Commerce Department of the State Council.
- Exporters must apply for licenses and adhere to specified conditions and validity periods.
- A single license allows an export operator to export a specific dual-use item to a single end-user with-in the scope, conditions and validity period specified in the export license. The validity period of a single license shall not exceed 1 year. If the export is completed within the validity period, the export license will automatically become invalid.
- A general license allows an export operator to export specific dual-use items multiple times to a single or multiple end-users within the scope, conditions and validity period specified in the export license. The validity period of a general license shall not exceed 3 years.
- End-user and end-use management
- The commercial administration department of the State Council shall establish a risk management system for end-users and end-uses of dual-use items, evaluate and verify the end-users and end-uses of dual-use items, and strengthen the management of end-users and end-uses.
- Exporters must submit documentation proving end-user and end-use compliance periods. The competent commerce department of the State Council may require export operators to simultaneously submit documents proving the end-user and end-use issued or certified by government agencies of the country or region where the end-user is located.
- The end-users of dual-use items shall make commitments as required by the Commerce Department of the State Council and shall not change the end-use of dual-use items or transfer them to any third party without the permission of the Commerce Department of the State Council
- Control list
- Importers or end-users violating regulations may be included in a control list, restricting their transactions.
- The State Council's commerce department can add importers or end-users to a control list if they violate end-user or end-use management requirements, threaten national security, or use dual-use items for terrorism. This includes using such items for weapons of mass destruction or if state measures restrict transactions.
- Those on the list face restrictions or prohibitions on transactions. Exporters must not deal with listed entities unless approved.
- Entities on the list must cooperate with investigations, cease illegal activities, and may apply for removal from the list if they rectify their actions.
- Supervision and inspection
- The State establishes a cooperative law enforcement system for supervising the export of dual-use items, ensuring illegal activities are promptly addressed.
- The Commerce Department of the State Council oversees this process, conducting inspections and investigations with at least two credentialed personnel. They may identify dual-use items and take preventive measures if risks are detected.
- Export operators must report and mitigate any illegal export risks. Service providers must report suspected illegal activities.
- The Commerce Department can issue end-user documents and manage related matters. Chinese entities must report foreign government requests for inspections and cannot comply without consent.
- Violations and penalties
- Exporting without permission: Punishable under Article 34 of the Export Control Law.
- Exceeding license scope or conditions: Subject to fines and confiscation of illegal gains.
- Circumventing export controls: Subject to severe penalties, including fines up to 10 times the illegal turnover.
- Failure to report violations: Warnings and fines up to RMB 3 million.
- Illegal acceptance of foreign inspections: Fines up to RMB 3 million and potential business suspension.
- Outstanding points
- The regulations emphasize national security and international cooperation.
- A comprehensive system for licensing and compliance is established.
- Strict penalties are enforced for violations, reflecting the seriousness of export control breaches.
- The regulations repeal several previous export control measures, streamlining the legal framework.
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