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Home > Export Control
English Translation of Export Control Law of China
By Henry Chen | 2020/10/19 20:09:11


Law of the People’s Republic of China on Export Control


(Unofficial Translation)


Passed by the 22nd Session of the Standing Committee of the 13th National People Congress


Chapter I General Provisions 2

Chapter II Control policies, Control lists and Control measures 4

Section 1 General Provisions 4

Section 2 Administration on Export of Dual-use Items 6

Section 3 Administration on Export of Military Items 7

Chapter III Supervision and Administration 7

Chapter IV Legal Liability 9

Chapter V Supplementary Provisions 11


Chapter I General Provisions


Article 1 This law is enacted with a view to safeguarding national security and interests, fulfilling international obligations such as non-proliferation, strengthening and standardizing export control.


Article 2 This law is applicable to the state's export control over dual-use items, military items, nuclear and other goods, technologies and services related to the maintenance of national security and interests and the performance of international obligations such as non-proliferation (hereinafter referred to as "controlled items”).


The term "controlled items" as mentioned in the preceding paragraph shall include technical data and other data related to the items.


Export control as mentioned in this law means that the State adopts prohibitive or restrictive measures against the transfer of controlled items from within the Territory of the People's Republic of China to outside the territory thereof and the provision of controlled items by citizens, legal persons and organizations of non-legal person nature in the People's Republic of China to foreign organizations and individuals.


Dual-use items mentioned in this Law refer to goods, technologies and services that have both civilian and military uses or contribute to enhancing military potential, especially those that can be used in the design, development, production or use of the weapons of mass destruction and their means of delivery.


The term "military items" as mentioned in this law refers to equipment, special production equipment and other relevant goods, technologies and services used for military purposes.


The term "nuclear" as used in this law means nuclear materials, nuclear equipment, non-nuclear materials for reactors and related technologies and services.


Article 3 Export control shall adhere to the overall concept of national security, the maintenance of  international peace, the coordination in security and development, and the improvement of the administration and services of export control.


Article 4 The State adopts a unified export control system, which is administered through the formulation of control lists, directory or catalogues (hereinafter referred to as the control lists) and the implementation of export licenses.


Article 5 The departments under the State Council and the Central Military Commission that assume the functions of export control (hereinafter referred to as the state administrative departments of export control) shall be responsible for the work of export control according to their respective functions and duties. The State Council and other relevant departments of the Central Military Commission shall be responsible for the relevant work of export control according to their respective functions and duties.


The State has established a coordination mechanism for the work of export control to coordinate major matters of export control in an overall manner. The administrative departments of export control of the State and the relevant departments of the State Council shall cooperate closely to enhance information sharing.


The state administrative departments of export control shall, in conjunction with other relevant departments, establish an expert consultation mechanism on export control to provide advice on export control work.


The administrative department of export control of the State shall issue in time guidelines on export control of relevant industries, guide exporters to establish and improve the internal compliance system of export control and standardize their operations.


The relevant departments of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall be responsible for the relevant work of export control in accordance with the provisions of laws and administrative regulations.


Article 6 The State shall strengthen international cooperation in export control and participate in the formulation of relevant international rules on export control.


Article 7 Exporters may establish and join relevant chambers of commerce, associations and other trade self-regulatory organizations according to the law.


Relevant chambers of commerce, associations and other trade self-regulatory organizations shall abide by laws and administrative regulations, provide services related to export control to their members in accordance with their articles of association, and play a coordinating and self-regulatory role.


Chapter II Control policies, Control lists and Control measures


Section 1 General Provisions


Article 8 The state administration for export control shall, in conjunction with other relevant departments, formulate policies on export control, of which major policies shall be submitted to the State Council for approval or to the State Council and the Central Military Commission for approval.


The state administrative department of export control may assess the countries and regions where the items under control are to be exported, determine the risk levels and take corresponding control measures.


Article 9 The administrative department of export control of the State shall, in accordance with the provisions of this law and other relevant laws and administrative regulations, formulate and adjust the export control list of controlled items in conjunction with the relevant departments according to the prescribed procedures and in accordance with the export control policies, and promptly publish the list.


With the approval of the State Council or the Central Military Commission, the state administrative department for export control may, in light of the need to safeguard national security and interests and fulfil international obligations such as non-proliferation, exercise temporary control over goods, technologies and services not included in the export control list and shall make a public announcement thereof.


The duration of the temporary control shall not exceed two years. Before the expiration of the period for the implementation of temporary control, an assessment shall be made in a timely manner, and based on the assessment results, a decision shall be made to cancel the temporary control, extend the temporary control or add the items under temporary control to the export control list.


Article 10 In order to safeguard national security and interests, the need of non-proliferation and other international obligations, with the approval of the State Council, the State Council or the Central Military Commission, the state administrative department of export controls, in conjunction with the relevant departments can prohibit the export of certain controlled items, or prohibit these items from being exported to specified countries and regions, organizations and individuals.


Article 11 An export operator engaged in the export of controlled items shall abide by the provisions of this law and other relevant laws and administrative regulations. Those who, according to law, need to obtain qualifications for the export business of related controlled items shall obtain corresponding qualifications.


Article 12 The State adopts a licensing system to the export of controlled items.


For items listed in the export control list or items under temporary control, the exporter shall apply to the state administrative department of export control for permission.


For goods, technology and services outside the scope of export control list and temporary control items, exporters should apply for license when they know or ought to have known or were informed by the state administrative department of export control that following risks exist:

(1) Endangering national security and interests;

(2) Being used for the design, development, production or use of weapons of mass destruction and their means of delivery;

(3) Being used for purposes of terrorism;


Where an exporter is unable to determine whether the goods, technologies and services to be exported are under control in accordance with the provisions of this law and submits an inquiry  to the state administrative department of export control, the state administrative department of export control shall reply in a timely manner.


Article 13 The administrative department of export control of the State shall, taking into account the following factors comprehensively, examine an exporter's application for items under export control and make a decision on whether to approve:

(1) National security and interests;

(2) International obligations and commitments;

(3) Export type;

(4) Sensitivity of controlled items;

(5) The country or region of export destination;

(6) End-users and end-uses;

(7) Relevant credit records of the exporter;

(8) Other factors prescribed by laws and administrative regulations.


Article 14 If an exporter establishes an internal compliance system for export control and its operation is in good condition, the state administrative department of export control may grant it general license and other convenient measures for the export of relevant controlled items. Specific measures shall be formulated by the state administrative department of export control.


Article 15 An exporter shall submit to the administrative department of export control documents certifying the end-user and end-use of the items under control, which shall be issued by the end-user or the government agency of the country or region where the end-user is located.


Article 16 The end-user of a controlled item shall undertake not to change the end-use of the controlled item or transfer it to any third party without the permission of the state administrative department of export control.


If the exporter or importer finds that the end-user or end-use is likely to change, they shall immediately report to the state administrative department of export control in accordance with the relevant provisions.


Article 17 The state administrative department of export control shall establish a risk management system for the end-users and end-uses of the controlled items, evaluate and verify the end-users and end-uses of the controlled items, and strengthen the management of the end-users and end-uses.


Article 18 The state administrative department of export control shall establish a control list for importers and end users under any of the following circumstances:

(1) Violates the requirements for the management of end users or end uses;

(2) Likely to endanger national security and interests;

(3) Use controlled items for terrorist purposes.


With respect to the importers and end users listed in the control list, the state administrative department of export control may take such necessary measures as prohibiting or restricting the transaction of the controlled items and ordering the suspension of the export of the controlled items.


Exporters shall not transact in violation of regulations with importers and end users listed in the control list. Under special circumstances, an exporter may apply to the state administrative department of export control if it is really necessary to conduct transactions with importers or end users listed in the list of control.


Importers and end users included in the control list may apply to the state administrative department of export control for removal from the list if they no longer have the circumstances specified in the first paragraph after taking measures. The state administrative department of export control may, in light of the actual situation, decide to remove importers and end users from the control list.


Article 19 The consignor of export goods or the customs agent of the goods under export control shall submit to the Customs for examination the license issued by the administrative department of export control and go through the formalities of customs declaration in accordance with the relevant provisions.


Where the consignor of an export fails to submit to the Customs for examination a license issued by the administrative department of export control, and the Customs has evidence that the export items may fall within the scope of export control, it shall question the consignor of the export items. The customs may propose to the state administrative department of export control to organize the process of identification, and according to the identification conclusions made by the state administrative department of export control, dispose of them according to law. During the period of identification or questioning, the Customs shall not release export items.


Article 20 No organization or individual may provide such services as agency service, freight forwarding, Posting and delivery, customs declaration, third-party e-commerce trading platform and finance for an exporter to engage in illegal activities under export control.


Section 2 Administration on Export of Dual-use Items


Article 21 When applying for the export of dual-use items to the administrative department for export control of dual-use items, an exporter shall submit the relevant materials truthfully and faithfully in accordance with the provisions of laws and administrative regulations.


Article 22 The state administrative department for export control of dual-use items shall accept the application for export of dual-use items, examine the application for export of dual-use items separately or jointly with the relevant departments in accordance with the provisions of this law and other relevant laws and administrative rules and regulations, and make a decision on approval or disapproval within the legal time limit. Where a decision on approval is made, the license-issuing organ shall issue an export license.


Section 3 Administration on Export of Military Items


Article 23 The state implements a system of export monopoly over military items. Business operators engaged in military export shall be qualified for military export monopoly and shall engage in military export activities within the approved business scope.



The military export monopoly shall be examined and approved by the state administrative department for military export control.


Article 24 Military exporters shall, in accordance with control policies and product attributes, apply to the state administrative department for military export control for approval of military export projects, military export items and military export contracts.


Major military export projects, major military export projects and major military export contracts shall be examined by the state department for military export control in conjunction with other relevant departments and submitted to the State Council and the Central Military Commission for approval.


Article 25 Military exporters shall, before exporting military items, apply to the administrative department of military export control for obtaining military export licenses.


When exporting military items, military exporters shall submit to the Customs for examination the license issued by the administrative department of military export control and go through customs formalities in accordance with relevant state regulations.


Article 26 Military exporters shall entrust approved military export transport enterprises to handle military export transport and related business. Specific measures shall be formulated by the administrative department of military export control in conjunction with other relevant departments.


Article 27 Military exporters or scientific research and production units that participate in international military exhibitions shall go through formalities of examination and approval with the state administrative department of military export control in accordance with relevant procedures.


Chapter III Supervision and Administration


Article 28 The state administrative departments for export control shall supervise and inspect the export activities of controlled items according to law.


When investigating activities suspected of violating the provisions of this law, the state administrative department of export control may take the following measures:

(1) To enter the business premises or other relevant premises of the respondent for inspection;

(2) To question the respondents, interested parties and other relevant organizations or individuals and require them to give explanations on matters related to the incident under investigation;

(3) To consult and copy documents, agreements, accounting books, business correspondence and other documents and materials of the respondents, interested parties and other relevant organizations or individuals;

(4) To inspect the means of transport used for export, stop the loading of suspected export items, and order the return of illegally exported items;

(5) To seal up or detain relevant items involved;

(6) To check the respondent's bank account.


The adoption of the measures mentioned in item 5 and 6 of the preceding paragraph shall be subject to the written approval of the person in charge of the state administrative department for export control.


Article 29 The relevant departments of the State Council, the local people's governments and their relevant departments shall give assistance to the state administration for export control in performing their duties according to law.


Relevant organizations and individuals shall cooperate with, and may not refuse or obstruct, the state administrative department of export control in carrying out supervision, inspection and investigation separately or in conjunction with other relevant departments according to law.


The relevant state organs and their functionaries shall be obliged to keep confidential the state secrets, trade secrets, personal privacy and personal information they come to know during the investigation in accordance with the law.


Article 30 In order to strengthen the administration of the export of controlled items and prevent the risk of illegal export of controlled items, the state administrative department of export control may take measures such as having regulatory talks and issuing warning letters.


Article 31 Any organization or individual shall have the right to report any suspected act in violation of the provisions of this law to the administrative department of export control. Upon receiving the report, the administrative department of export control of the State shall promptly deal with it according to law and keep confidential the informant.


Article 32 The administrative departments of export control shall, in accordance with international treaties concluded or acceded to or the principle of equality and mutual benefit, carry out cooperation and exchanges with other countries or regions and international organizations in export control.


Organizations and individuals within the territory of the People's Republic of China shall provide information related to export control to the outside according to law;  when the information may endanger national security and interests, it shall not be provided.


Chapter IV Legal Liability


Article 33 If an export operator engages in the export of related controlled items without obtaining the export qualifications of such items, it shall be admonished, ordered to stop the illegal act, have its illegal income confiscated, and be imposed a fine of not less than five times but not more than 10 times the amount of its illegal business operations if the amount of its illegal business operations is more than 500,000 yuan. If the illegal business operation cannot be valued or the amount of illegal business operation is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 5 million yuan shall be imposed.


Article 34 An exporter who commits any of the following acts shall be ordered to stop his illegal act, its illegal income shall be confiscated, and if the amount of its illegal business operations exceeding 500,000 yuan, it shall be concurrently fined not less than five times but not more than 10 times the amount of his illegal business operations; if the illegal business operation cannot be valued or the amount of illegal business operation is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 5 million yuan shall be imposed. If the circumstances are serious, it shall be ordered to suspend business for rectification, or even to revoke the export business qualification of the controlled items:

(1) To export controlled items without permission;

(2) To export outside the permitted scope as stipulated in the export license;

(3) To export controlled items prohibited from export.


Article 35 If a license for the export of controlled items is obtained by deception, bribery or other illegitimate means, or the license for the export of controlled items is illegally transferred, the license shall be revoked, the export license shall be confiscated, the illegal income shall be confiscated. If the amount of illegal business operations is above 200,000 yuan, a fine shall be imposed not less than five times but not more than 10 times the amount of illegal business operations; If the illegal business operations cannot be valued or the amount of illegal business operations is less than 200,000 yuan, a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed.


Where an export license for controlled items is forged, altered or traded, the illegal income shall be confiscated, and the amount of illegal business operations exceeding 50,000 yuan shall be concurrently fined not less than five times but not more than 10 times the amount of illegal business operations; If the illegal business operation cannot be valued or the illegal business operation is less than 50,000 yuan, a fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed.


Article 36 Those who know that an exporter engaged in export control violations but still provide to the exporter agency service, freight, delivery, Customs declaration, third party e-commerce transaction platform and financial services shall be admonished, ordered to stop illegal operation and confiscated of illegal gains. If the illegal operation is worth above 100,000 yuan, the operator shall be concurrently fined above 3 times but not more than 5 times the amount of the illegal business operation. If the illegal business operation cannot be valued or the amount of illegal business operation is less than 100,000 yuan, a fine of not less than 100,000 yuan but not more than 500,000 yuan shall be imposed.


Article 37 If an exporter, in violation of the provisions of this law, conducts transactions with importers or end users listed in the control list, it shall be admonished, ordered to stop the illegal acts, have its illegal income confiscated, and be concurrently fined not less than 10 times but not more than 20 times the amount of the illegal business transactions if the amount of the illegal business transactions is more than 500,000 yuan. If the illegal business operation cannot be valued or the amount of illegal business operation is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 5 million yuan shall be imposed; If the circumstances are serious, it shall be ordered to suspend business for rectification, or even revoke the export business qualification of the relevant controlled items.


Article 38 An exporter who refuses or obstructs supervision and inspection shall be admonished and fined not less than 100,000 yuan but not more than 300,000 yuan; If the circumstances are serious, it shall be ordered to suspend business for rectification, or even revoke the export business qualification of the relevant controlled items.


Article 39 An exporter who has been punished for violating the provisions of this law may, within five years from the date the punishment decision takes effect, not be able to apply for export license. The persons in charge who are directly responsible and other persons who are directly responsible may be prohibited from engaging in relevant export business activities for five years, and those who are criminally punished for illegal acts of export control may not engage in relevant export business activities for life.


The state administrative department of export control shall, in accordance with law, include in the credit records any violation of this law by an exporter.


Article 40 Any illegal act under export control as provided for in this law shall be punished by the state administrative department of export control. Where laws or administrative regulations provide that custom enforcement agencies issue penalties, such penalties shall be imposed in accordance with this law.


Article 41 Any organization or individual concerned who is not satisfied with the decision of the state administrative department for export control on denial of license may apply for administrative review according to law. The administrative review decision shall be final.


Article 42 Any state functionary engaged in the administration of export control who neglects his duty, engages in malpractices for personal gains or abuses his power shall be given sanctions according to law.


Article 43 Anyone who violates the provisions of this law on the administration of export control and endangers state security and interests shall, in addition to being punished in accordance with the provisions of this law, be dealt with and punished in accordance with the provisions of relevant laws and administrative regulations.


Those who, in violation of the provisions of this Law, export items under export control which are prohibited by the State or export items under export control without permission shall be investigated for criminal liability according to law.


Article 44 Any organization or individual outside the territory of the People's Republic of China who, in violation of the relevant provisions of this law on the administration of export control, endangers the national security and interests of the People's Republic of China and hinders the performance of its international obligations such as non-proliferation, shall be dealt with and investigated for legal liabilities according to law.


Chapter V Supplementary Provisions


Article 45 The relevant provisions of this law shall apply to the transit, transshipment, through transportation and re-export of controlled items or the export of controlled items from bonded areas, export processing zones and other areas under special customs supervision, export supervised warehouses, bonded logistics centers and other places under bonded supervision to overseas countries.


Article 46 Where the export of nuclear and other controlled items is not provided for in this law, the provisions of relevant laws and administrative regulations shall prevail.


Article 47 The export of military items for overseas use of the armed forces, military exchanges with foreign countries, military assistance, etc., shall be implemented in accordance with the provisions of relevant laws and regulations.


Article 48 Where the abuse of export control measures by any country or region endangers the national security and interests of the People's Republic of China, the People's Republic of China may, in light of the actual situation, take reciprocal measures against such country or region.


Article 49 This Law shall enter into force from December 1, 2020.



_________

The author, Henry Chen, licensed to practice law in China and New York, is a senior partner of Dentons Shanghai Office.  Before joining Dentons, Henry was AP Compliance Director of Ford.  Henry's practice areas include FCPA, anti-bribery and fraud investigation, cyber security and data integrity, economic sanction and trade control, compliance management system, corporate matters and dispute resolutions.  Henry's email is Henry.Chen@dentons.cn.  Henry is the author of the book Risk Management on Commercial Bribery in China and the book Compliance Risks of Enterprises in Globalization: Outbreak and Control



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