China's Export Control Law: Compliance and Defense for Foreign Companies

The following is general information on Chinese law, not legal advice for any specific matter. Rules and thresholds change from time to time, and the treatment of any transaction depends on its structure and the parties; consult qualified PRC counsel before acting.

What changed in 2024 — and what did not

A common misconception is that China's Export Control Law was amended in 2024. It was not. The Export Control Law (出口管制法), adopted on 17 October 2020 and effective 1 December 2020, remains the governing statute. What happened in 2024 is that its implementing framework matured: the State Council issued the Regulations on Export Control of Dual-Use Items (两用物项出口管制条例), State Council Order No. 792, effective 1 December 2024, and four ministries published the Dual-Use Items Export Control List (两用物项出口管制清单), Announcement 2024 No. 51, effective the same day. That list is China's first unified dual-use list, replacing eleven earlier announcements. So the answer to "was the Law revised in 2024?" is no — the change was the regulation and the consolidated list beneath it.

What the Export Control Law reaches

The Law covers controlled items, which include dual-use items, military items, nuclear items and other goods, technologies and services relevant to safeguarding national security and interests, as well as related technical data. Its controls run on the classic pillars: control lists, end-use and end-user controls, and a licensing regime. A company can be caught even where the item is not on a list, if it knows or should know the item is for a prohibited end-use or end-user. Extraterritorial application also matters for foreign companies: the Law can reach conduct by entities and individuals outside China, so a foreign parent or a non-Chinese subsidiary is not automatically out of scope merely because the export happens abroad.

Licensing and the compliance program a foreign company needs

• Screen against the current list. Match the item, technology and technical data against the Dual-Use Items Export Control List and any sectoral lists, using the current editions.
• Screen the counterparty and end-use. Check the buyer, the end-user and the stated end-use, including against the control lists and the unreliable-entity list, and obtain end-use and end-user statements where required.
• Classify before you ship. Classification is the foundation of licensing; a misclassified shipment is an unlicensed export even if unintentional.
• Watch re-exports and deemed exports. Transfers of controlled technology to foreign nationals and re-exports of items containing Chinese controlled content can require licences.

Penalties: the numbers to know

Exporting controlled items without the required licence or qualification carries serious penalties under Article 33 of the Export Control Law: a warning, an order to stop, and confiscation of illegal gains; and where the illegal turnover is RMB 500,000 or more, a fine of five to ten times the turnover; where it is below RMB 500,000, a fine of RMB 500,000 to RMB 5,000,000. Related provisions address falsified application materials (Article 34) and entities on the control list (Article 36). The exposure is not only financial — the reputational and supply-chain consequences of a violation can be the larger cost.

Responding to an enforcement inquiry

If a foreign company receives an inquiry, a request for information or a notice from MOFCOM, the General Administration of Customs or another authority, the response should be handled as a legal matter from the first contact: preserve the documents, map the shipment or technology transfer, and do not make informal representations that may later bind the company. Early advice from PRC counsel who understands the export-control regime is usually the difference between a contained administrative matter and a larger investigation.

A short checklist

• Confirm the item against the current dual-use list and sectoral lists.
• Verify the end-user, end-use and any requirement for end-use certificates.
• Classify and license before shipment or transfer, including deemed exports and re-exports.
• Keep records sufficient to demonstrate the compliance decision.
• Engage counsel immediately on any inquiry or enforcement contact.

The control list and licensing requirements are updated periodically, so compliance must run on the latest MOFCOM and GACC announcements. See also our guide to China technology licensing and joint development for the ownership side of controlled technology.