China adds japanese entities to export control and watch lists
Date of publication: July 1, 2026.
China's Ministry of Commerce (MOFCOM), through its Security and Control Bureau, has announced two measures under the Export Control Law (Announcement No. 27) and the Regulations on Export Control of Dual-Use Items (Announcement No. 28), to safeguard national security and interests and fulfill non-proliferation obligations, targeting a total of 40 Japanese entities involved with dual-use items and activities seen as contributing to Japan's military capabilities.
The new measures introduce:
- Inclusion of 20 Japanese entities, including the National Institute for Defense Studies and multiple Mitsubishi Heavy Industries group companies, in an export control list, subject to prohibitions on export and transfer of dual-use items originating in China.
- Prohibition on Chinese exporters supplying dual-use items to these 20 listed entities and prohibition on foreign organizations and individuals transferring or providing Chinese-origin dual-use items to them, with ongoing related activities required to cease immediately.
- A case-by-case licensing exception under which, in special circumstances where export is deemed necessary, exporters may apply to MOFCOM for approval.
- Inclusion of another 20 Japanese entities, including Mitsui E&S Co., Ltd., Terra Drone Corporation, multiple OKI group companies, and other firms involved with dual-use technologies, in a separate watch list due to unverifiable final users or end uses of dual-use items.
- A ban on use of general licenses and on obtaining export certifications via simple registration or information filing procedures for exports of dual-use items to the 20 watch‑listed entities.
- A requirement that exporters seeking individual licenses for exports to watch‑listed entities submit risk assessment reports on those entities and provide written undertakings that dual-use items will not be used for any purpose contributing to the enhancement of Japan's military capabilities.
- More stringent end-user and end-use review by MOFCOM for exports of dual-use items to watch‑listed entities, with denials for any exports involving Japanese military end users, military end uses, or any other uses that would enhance Japan's military strength.
- A mechanism under which entities on the watch list that cooperate with verification in accordance with Article 26 of the Regulations on Export Control of Dual-Use Items may apply for removal from the watch list, subject to MOFCOM's verification and decision.
- Immediate effect of both measures from the date of publication, 29 June 2026.
Since both MOFCOM announcements were issued and took effect on 29 June 2026, the export control and watch-list measures now simultaneously apply to 40 identified Japanese entities in relation to Chinese-origin dual-use items.
Conclusion
These measures significantly expand China's dual-use export control coverage over Japanese entities perceived as contributing to Japan's military capabilities, tightening both outright prohibitions and licensing scrutiny.
Companies should promptly update their restricted party screening and export control compliance procedures to reflect the new control and watch lists and to ensure enhanced due diligence and licensing checks for any transactions involving the identified Japanese entities.
These changes have been updated in ONESOURCE Global Trade Content.
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