On December 21, 2023, China’s Ministry of Commerce (“MOFCOM”) and Ministry of Science and Technology (“MOST“) jointly issued a revised Catalogue of Technologies Prohibited or Restricted from Export (the “Catalogue”[1]). The Catalogue was last updated in August 2020, and a draft revision was published for public comments in December 2022. The revised Catalogue reduces the number of controlled items from 164 to 134, with 34 deleted, four added, and 37 modified. The revised Catalogue took effect immediately.
MOFCOM also released a short Q&A article in Chinese on its website summarizing the main considerations in revising the Catalogue, revisions to the Catalogue, and suggestions on compliance with technology export rules.
Context of the Catalogue in China’s Export Control Regimes
China’s principal export control regimes consist of: (1) the regime pursuant to the Foreign Trade Law (last amended in 2022), covering primarily exports of technologies; and (2) the regime pursuant to the Export Control Law (enacted in 2020), covering primarily dual-use items.
The Catalogue is an important export control list under the first regime, which also comprises the Regulations for the Administration of the Import and Export of Technology,[2] the Measures for the Administration of Technologies Prohibited or Restricted from Export,[3] and Measures for the Administration of Registration of the Contracts for Import and Export of Technologies.[4]
Under the first regime, all “exports” (broadly defined as any acts of transferring technology outside of mainland China by way of trade, investment, or economic and technical cooperation) of technology are subject to government oversight and are classified into three categories:
- Prohibited technologies: export is prohibited;
- Restricted technologies: export requires an export license from MOFCOM; and
- Unrestricted technologies: export of such technology requires registration of the proper transaction document(s) with the relevant Chinese authority.
The Catalogue is the key legal instrument defining what technologies fall into the “prohibited” and “restricted” categories.
Key Revisions to the Catalogue
1. Deletion of 34 Controlled Items
The Catalogue removes six technical items from the prohibited list, including technology for manufacturing growth regulators for plants, and 28 technical items from the restricted list, such as technology for manufacturing medical diagnostic devices and equipment, as well as target featuring extraction and recognition technology.
2. Addition of One Prohibited Item and Three Restricted Items
The Catalogue adds one technical item to the prohibited list related to human cell cloning and gene editing technology, and three technical items to the restricted list, including technology for utilizing hybrid advantages in crops, bulk material handling and conveying technology, and laser radar systems.
Where a technology is listed as subject to export restrictions, a Letter of Intent on Technology Export Licensing must first be obtained from MOFCOM affiliates at the provincial level before an entity or individual can enter into legally binding commitments with respect to export of the technology and apply for an export license. The applicant must be a China-registered entity, so a foreign company can use its China-registered subsidiary or engage an export agent to go through the application process.
3. Modification of 37 Controlled Items
The Catalogue also modifies the control parameters of six technical items on the prohibited list such as technology related to the extraction, processing, refining and use of rare earth, and 31 technical items on the restricted list involving resources and manufacturing technologies for traditional Chinese medicine, breeding technologies for cash crops, metallurgical technologies for non-ferrous metals, and design and construction technologies for large-scale high-speed wind tunnels.
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