Client Advisory: China’s First Export Control Statute May Be Around the Corner

Click here to read the full Client Advisory by Steptoe. On December 28, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Export Control Law (the draft law) for public comment. As China’s first export control statute, this law is intended to unify and significantly enhance China’s existing export control framework, with reference to prevalent global practices. The 2019 draft consists of 6 six chapters and 48 provisions, a substantial reduction from the 2017 draft which contained 70 provisions. While retaining the basic structure and many measures in the 2017 draft, such as blacklisting, country-specific controls, etc., the 2019 draft leaves out certain control measures that were in the 2017 draft. It also makes comprehensive textual adjustments and rolls back some wording regarding defensive or retaliatory use of export control measures. Once enacted, the new export control law, with its expanded coverage and strengthened control and enforcement measures, will undoubtedly have a direct impact on multinationals operating in China that engage in or provide services related to the export of items or technologies controlled under Chinese export control laws. Whether the law will be leveraged into a larger role in the midst of current policy and international relations dynamics remains to be seen, particularly given the markedly increased role of national security in the draft law, either stated or implicit, including with respect to controlled items identification, licensing policy, country-specific control measures, and blacklisting. It also remains to be seen how this new law will coordinate with existing export control rules and regulations. The public comment period on the draft law ends on January 26, 2020 and the subsequent procedures and timeline for further review, deliberation, and final adoption remain unclear. However, given the importance of this law, many expect the final promulgation to take place in 2020. For more information, see the full Client Advisory.