Enacting this first-ever dedicated Export Control Law in 2020 demonstrates the latest efforts of China to enhance its export control regime. The new law effectively establishes a unified export control system that aims to safeguard China’s national security and interests while upholding other international obligations. What does the new law include and what are the consequences of violations? What are the recommendations for global trade compliance programs? Are you affected? Get the answers here.
All companies, organizations, and individuals that export controlled items from China as well as Chinese citizens, legal persons or non-legal-person organizations that provide controlled items to foreign entities are required to comply with this first-ever dedicated law on export controls as of December 1, 2020.
"Controlled items" can refer to many things and range included in China's new law is very broad. It is important to understand which goods, technologies, and activities may be affected. Read on to find out what the new regulation means for your business and members of staff.
Dual-use goods (items that can be used for both commercial and military purposes), military, and nuclear items.
Other items (with impact on China’s national security and interest, and on the performance of international obligations).
Goods, technology, services, and data that involve or otherwise relate to any of the controlled items.
China's new Export Control Law encourages exporters to establish an internal compliance program (ICP) for export control compliance. With such an ICP in place, the governing authority and official regulators in China may grant licensing facilitation measures. This can include general export licenses for relevant controlled items.
Seasoned trade compliance specialists and companies versed in export controls may recognize such recommendations from other governing bodies’ guidelines. For example, the EU Guidance on Internal Compliance Programme (ICP) for dual-use trade controls or the US Framework for OFAC Compliance Commitments.
Software forms an integral part of such trade compliance programs and AEB’s Export Controls delivers powerful protection for your business. China’s new ECL is a new example for the increasing complexity of global export control landscapes. Don’t take any risks.
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Violating the new Export Control Law of China will result in penalties. And suspected violations of the ECL will result in investigative measures. Both penalties and investigations can only be imposed by authorized parties of the governing authorities, i.e. regulators of the new export control system in China. While non-compliance penalties and investigations will be imposed on exporters based in China (domestic and foreign), the law also stipulates extraterritorial application with impact on foreign organizations or individuals outside of China.
Official effectiveness date. This means that the new export control law of the People’s Republic of China as released in October 2020 has taken effect.
The final version of the new ECL was passed and officially enacted following the third review by the Standing Committee of the NPC on October 17, 2020.
A revised draft of the new export control law was presented for second review to the Standing Committee of the 13th National People’s Congress (NPC).
The second draft of the new export control law (ECL) was released by the Ministry of Commerce (MOFCOM) for public comment until January 26, 2020.
The first draft of the new ECL was released for public comment by the Ministry of Commerce (MOFCOM) of the People’s Republic of China (PRC).