China’s New Export Control Framework: Key Changes for Dual-Use Items

On December 1, 2024, two key components of China’s export control regime took effect: the “Regulations on Export Control of Dual-Use Items” (“DIR”) and the “Export Control List of Dual-Use Items” (the “Dual-Use Items List”). The DIR and the Dual-Use Items List consolidate China’s export controls regime, close gaps caused by previously enacted export control regulations, and provide clearer guidelines for export activities.

Two days later, China announced additional measures to tighten controls on the export of certain dual-use items to the United States. This includes strict restrictions on the export of gallium, germanium, and other materials critical to the production of advanced semiconductors and military equipment.

I. Defining Dual-Use Items

The DIR broadly defines “dual-use items” to include goods, technologies, and services that may be used either to fulfill civil or military purposes or to contribute to an increase in military potential. The Dual-Use Items List identifies 10 categories of dual-use items that are subject to export controls and provides detailed specifications (e.g., size, density, purity, etc.) of controlled items. Notably, however, monitored chemicals and missile-related items and technologies are excluded from the DIR’s scope, as they are governed by separate regulations, including the Regulations on Administration of Chemicals Subjected to Supervision and Control and Regulations on the Administration of Military Product Exports.

II. Controlled Activities

The DIR delineates two key types of controlled activities:

1. Change of Physical Locations: The DIR regulates the transfer of dual-use items outside Mainland China, including through donations, exhibitions, and international cooperations and aids.

2. Provision to Foreign Persons: The DIR also governs the provision of dual-use items by Chinese citizens, legal persons, and unincorporated organizations to foreign entities and individuals. Notably, this regulation extends beyond cross-border transfers and may apply domestically if ownership of dual-use items changes hands from domestic to foreign parties.

III. Key Features

Four aspects of the DIR stand out:

1. Formulate a Uniform List of Dual-Use Items: Before the release of the DIR, China primarily managed its export controls through the Export Control Law, along with separate regulations and temporary export control announcements governing nuclear, biological, chemical, and missile-related products, and other dual-use items. The DIR and the Dual-Use Items List will replace the various existing category-specific regulations and clearly identify the controlled items in a uniform list.[1] The newly released DIR and the Dual-Use Items List will serve as a crucial basis for exporters to identify and apply for licenses for exporting the controlled items.

2. Facilitate Dual-Use Exports: The DIR introduces several measures to facilitate trade, including abolishing the existing exporter registration system, establishing an “export certificate” mechanism through which exporters no longer need to pre-register, and providing a transparent export control framework. See table below.

3. Establish an Export “Watch List”: The DIR establishes a “Watch List” system that is similar to the “Unverified List” under the U.S. EAR. Chinese authorities may designate parties who do not cooperate with end-user/end-use verification requirements. Exporters dealing with entities on the Watch List are barred from applying for general licenses or obtaining export certificates. Instead, these exporters must submit risk assessment reports and compliance commitments before applying for specific licenses.

4. Extend Extraterritorial Reach: The DIR allows the Ministry of Commerce to extend its regulatory reach beyond China’s borders to regulate and investigate the export of Chinese dual-use items, including items that originate from, contain, or are manufactured with Chinese dual-use items, even if such items are produced or traded outside of China. As a result, foreign entities and individuals handling these items could also be subject to the DIR.

*Morrison Foerster Trainee Nicholas Li also made contribution to this article.

As further explained in the Terms / Notices linked below, the information provided herein is not legal advice. Any information concerning the People’s Republic of China (PRC) is not an opinion on, determination on, or certification of the application of PRC law. We are not licensed to practice PRC law.

[1] Except for monitored chemicals and missile-related items and technologies, as discussed above.