China's Draft Export Regs Raise Questions About Scope, Foreign Investigations

China’s new export controls law may apply to a broader range of items than just dual-use goods, Baker McKenzie said in a June alert. In draft regulations released earlier this year (see 2204270040), China included a provision that will allow it to also restrict exports of non dual-use goods, which could include artificial-intelligence or integrated-circuit design technologies “that are currently regulated under a separate legacy technology import and export control regime,” the firm said.

The firm also said it’s unclear how several other provisions will be carried out in practice, such as how China will handle export investigations by foreign authorities. The draft regulations bar Chinese people and companies from cooperating with foreign government agents for on-site export control interviews but may grant exemptions in certain cases. The U.S. has struggled to conduct end-user checks in China in recent years (see 2205120042).

“It is unclear how [China’s] approval may be obtained under this requirement, and how such restriction may impact compliance and ability to secure export permits under foreign export control regimes,” Baker McKenzie said.

Exporters will also have to meet certain requirements before they can qualify for a Chinese general license, the firm said. The country will grant general licenses based on “various factors,” including how well the exporter is implementing an internal compliance program and its “historical license application record for the past two years.”

Baker McKenzie also briefly outlined other notable provisions in the draft regulations, including license exceptions, China’s blacklist regime, catch-all provisions and responsibilities of third parties.