Who is affected?
The new Export Control Act affects a company when it:
- controlled goods exported from China
- Controlled goods processed as intermediate or final product and exported again
- Shares in Chinese companies has
Which goods are controlled?
The new law controls dual-use, military and nuclear goods. It also controls other goods, technologies or services that are important for national security and national interests and are related to the fulfilment of anti-proliferation and other international obligations. These other goods are listed. The export of non-listed goods may also be subject to authorisation if the goods to be exported could harm national security or national interests, if they could serve the proliferation of weapons of mass destruction or be used for terrorist purposes.
Which accompanying documents are required?
For the customs procedure in China, among other things, commercial invoices (2-fold) with signature and all customary commercial details are required. These include, for example:
- Name and address of the consignee
- Name and address of the seller
- the exact description of the goods
- the HS customs tariff number
- the unit price and the total price
- FOB value
- CIF cost and CIF value
- transport details
- Terms of payment and delivery
- Brand, number, number and type of packages
- Net weight and gross weight
- Country of origin
For the commercial invoice, Chinese customs requires a valuation of the individual parts instead of plant components. Transfer prices and contracts will also be reviewed.
Possible consequences of disregarding the law
Consequences for misconduct range from heavy fines, or confiscation of assets, to a ban on export business for 5 years. Accordingly, the offense is noted in the social credit system. Consequences for natural persons are judged and regulated by administrative or criminal law. In the event of a criminal conviction, this can also mean a lifetime ban on export transactions. Violations by organizations or individuals are also punished outside China. The “Unreliable List” is used for this purpose. This mainly documents foreign companies acting against Chinese interests.