Request a Demo
On December 28, 2019, the China National People’s Congress (NPC) released a new draft [1] of the Export Control Act. Public comments will be solicited until January 26, 2020.
The new draft consists of 6 chapters, 48 articles. Compared with the draft released in 2017, the quantity of the articles has decreased by one third. However, the main content has not changed significantly.
The six chapters of the Act are:
Chapter 1: General provisions
Chapter 2: Control policies and lists
Chapter 3: Control measures
Chapter 4: Supervision and administration
Chapter 5: Legal liability
Chapter 6: Supplementary provisions
According to the Act, the national export control administrations will formulate control lists for dual-use items, military products, and nuclear products. To export items in the control lists, exporters shall firstly apply for a permit. Administrators will assess applications based on international liability, national safety, export type, item sensitivity, export destination, end-user and end-use, and the credit history of the exporter, etc.
The exporter is also required to submit certification documents for the end-user and end-use to export control administrations, which shall be issued by the end-user or by government agency where the end-user is located. The administrations will establish a risk management system for the end-use and end-user and evaluate the certification documents submitted by the exporter.
For the export of items that are not listed, the exporter shall know if the item poses a risk to national security, could be used to make weapons of mass destruction or could be used in terrorism. If the items pose any of the risks listed above, the exporter shall apply for a permit. And if the exporter cannot determine whether the item poses these risks, they must consult the relevant administrations.
Here are some other key points in the Act:
Normally, for the export of dual-use items, the application shall be answered in 45 working days;
The importer and end-user who violate end-user or end-use commitments, those that endanger national security or use controlled items for terrorist purposes will be subject to trade restrictions.
Violations will be subject to stricter punishments.
The Act will also permit administrators to establish special policies for specific countries. The policies will include increasing bans and temporary controls beyond the general control list and will empower China’s government to take more actions during trade disputes. This Act will have a significant impact on trade and is of significant concern to international stakeholders.
