China has been the subject of several headlines lately in relation to U.S. export controls. Last week, China announced some news of their own. They are reviewing their current export control regulations and issuing updates for the first time in decades. One of those updates involves a new law which would enable the Chinese government to take reciprocal measures against countries that undermine their export control measures and threaten their national security and interests.
These measures will come in the form of a controlled items list encompassing civilian, military, and nuclear goods, technologies and services. The list has not yet been released, however, it includes technologies such as Artificial Intelligence, voice recognition, text analysis, and speech synthesis. These controls are largely thought to be a retaliation tool against other countries, such as the United States. The law will allow China to retaliate against restrictions put in place by the United States, including recent restrictions on Huawei, WeChat, TikTok, and Semiconductor Manufacturing International Corporation (SMIC).
In addition to the control lists, China will also implement export control guidelines for developing compliance programs used in applying for licenses for controlled goods. The new regulations will also include a ‘social credit’ record for individuals and companies. This allows the government to gauge how compliant an individual or company is in terms of adhering to government relations for the purpose of determining the level of government scrutiny required when applying for licenses.
Violations of the new export control law could be subject to fines of up to $745,000 or up to twenty times the value of the transaction.
If you need assistance in reviewing the ever-changing regulations, please contact Export Solutions for a free consultation.
Emmalie Armstrong is a Trade Compliance Consultant with Export Solutions – a firm specializing in U.S. import/export regulations.