China is looking to strengthen its export control regime by introducing a new Export Control Law. The proposed law, expected to be introduced in the National People’s Congress in 2018, will strengthen the government’s authority to regulate the exports of military, nuclear, biological, chemical and dual-use items. It also includes new restrictions on the transfer of cross-border technical data relating to controlled items. Draft legislation was published earlier in 2017, with the deadline for feedback closing in July 2017. If enacted as drafted, the new law will bring China’s system closer to other export control regimes, such as the US.
The Chinese government has regularly been criticised for failing to prevent Chinese entities from illegally exporting/re-exporting export-controlled technologies to countries such as Iran and North Korea (‘DPRK’). In March 2017, the US authorities fined China-based telecommunications manufacturer ZTE $1.2bn for illegal shipments of US-origin electronics to Iran and DPRK, in violation of the Export Administration Regulations and the Iranian Transactions and Sanctions Regulations.
According to the Adam Smith Project, the Chinese Ministry of Commerce has said that the update of its export control law is for the purpose of fulfilling its international obligations as a permanent member of the UN Security Council and as party to a number of international treaties that control trade in nuclear, biological and conventional weapons. China has not updated its export control regulations since 2007.
The draft law introduces tough new penalties against violators. It also allows Beijing to retaliate against any discriminatory export controls targeted at China.
For further information and in-depth discussion of Chinese export control developments and the ZTE story, please join us at this year’s WorldECR Forum in DC and London in October where we will be joined by Matt Bell of ZTE and Chinese export controls specialist Johnny Xie.
See the event programmes here: https://www.worldecr.com/conference-2017/