The following is a summary of new Chinese Export Compliance Guidelines which may be of relevance to our members: Under the ECL, exports, transfers and provisions of products, technology, and services may be prohibited or subject to licensing requirements based on factors including product features, end-users or end-uses, destinations, and exporters’ credit records. For the full report click here.
On 28 April 2021, China’s Ministry of Commerce (MOFCOM) issued the Guiding Opinions on Establishing the Internal Compliance Mechanism for Export Control by Exporters of Dual-use Items (2021 Guiding Opinions), replacing the 2007 Guiding Opinions of MOFCOM on Establishing Internal Export Control Mechanism by Dual-Use Substance & Technology Enterprises (2007 Guiding Opinions).1 Attached to the 2021 Guiding Opinions are new Dual-Use Item Export Control Internal Compliance Guidelines (ECC Guidelines), including thirty-seven pages of detailed recommendations for internal policies and procedures to prevent, detect, and remediate violations of China’s Export Control Law (ECL).2 The 2021 Guiding Opinions and ECC Guidelines provide a roadmap for upgrading existing compliance practices and adapting global programs to China’s evolving export control regime.
Policymaking Context
China’s new Export Control Law (ECL) took effect on 1 December 2020, creating a comprehensive framework for restricting exports of military and dual-use products and technology for national security and public policy reasons.3 Under the ECL, exports, transfers and provisions of products, technology, and services may be prohibited or subject to licensing requirements based on factors including product features, end-users or end-uses, destinations, and exporters’ credit records. The ECL eclipsed a patchwork of older export control measures, integrating elements of foreign export control schemes with provisions keyed to specific objectives of the Chinese government.
The ECL directs MOFCOM to issue export control compliance guidelines, and further admonishes exporters to establish and enhance their internal compliance mechanisms for export control.4 Although the 2021 Guiding Opinions and ECC Guidelines are not compulsory measures, they reflect MOFCOM’s expectations for effective compliance programs.
Purpose & Scope of Applicability
The stated purpose of the ECC Guidelines is to “provide guidance to export operators to establish and improve internal export control compliance systems, standardize the export behavior concerning dual-use items, and improve the awareness and level of export control compliance in the whole society.”
Basic Elements of An Effective Export Control Compliance System
The 2021 Guiding Opinions and ECC Guidelines list nine essential elements of an export control compliance system
Source: DLA Piper news
