Export Controls of Dual-Use Items: Tracking notable developments in China’s and the EU’s control systems

China strengthened its export control regime in October 2020 (see DS Brief); it adopted guidelines in April. For the EU, in November 2020, a tripartite agreement was reached between the Commission, the Council and the Parliament (see our DS Brief). The Regulation adopted on May 10 concludes a long process of revision of the European system.

(1) China: publication of guidelines for the establishment of an internal compliance mechanism by exporters of dual-use items.

The adopted export control law provides for the national export control administration to guide dual-use export operators in establishing and improving their internal compliance systems.

On April 28, 2021, the Ministry of Commerce of the People’s Republic of China issued “Guidelines on Establishing an Internal Compliance Mechanism for Export Control of Dual-Use Items by Exporters of Dual-Use Items“. These guidelines provide exporters with a framework for managing and mitigating the risks associated with trade control of dual-use items.

The internal compliance mechanism for dual-use export controls must include basic compliance elements, such as:

  • Drafting a policy statement
  • Establishment of an organizational structure
  • A comprehensive risk assessment
  • establishment of review procedures
  • development of contingency plans
  • Improving compliance audits
  • Maintaining information record
  • preparation of an information manual

There is thus a certain convergence with the European recommendations on internal compliance programs in the context of dual-use item controls.

This internal compliance mechanism is not mandatory, but its implementation could allow companies to benefit from certain administrative facilities, in particular to facilitate the granting of export licenses.

The existence of a compliance program will not necessarily result in a reduction or exemption from sanctions for export control violations. However, active measures taken to eliminate or mitigate the negative consequences of illegal acts may be taken into account in determining the penalty.

(2) EU : Adoption of the Regulation under discussion for 4 years

On May 10, 2021, the Council of the EU adopted a revised Regulation defining the EU regime for the control of exports, brokering, technical assistance, transit and transfers of dual-use items.

The current EU system, organizing the conditions of export and trade of dual-use items, has been in place since 2009 with Regulation 428/2009. However, an adaptation of the system was necessary to take into account the evolution of the technological, economic and political environment.

The modernized Regulation updates, discussed in detail in our previous Brief, include:

  • an extension of the notion of dual-use items to cyber-surveillance items
  • the inclusion of the notions of acts of terrorism or serious violations of human rights for the prevention of the misuse of dual-use items
  • an extension of the notion of exporter involving operators re-exporting European products,
  • a harmonization of administrative procedures, notably concerning the maximum validity period of individual and global export licenses, which is now two years,
  • the introduction of two new general export licenses: one for cryptographic goods and the other for intra-group technology transfers
  • the possibility for each Member State to establish a “national control list” allowing national control measures to be taken for goods not covered by this Regulation. These lists are communicated to the Commission which will publish them in the Official Journal of the EU,
  • the possibility of “transmissible controls” which allow, in certain cases, a Member State to introduce controls on the basis of legislation established by another Member State.

After the European Parliament and the Council have signed the Regulation, it will be published in the Official Journal of the EU and will enter into force 90 days after its publication.


It is now up to you to adjust! DS Avocats’ Customs and International Trade team is at your disposal to help you.