Licensing Export Control in China --Experiences and Challenges Wang Daxue Department of Arms Control and Disarmament Ministry of Foreign Affairs, China Asean Regional Forum (ARF) Export Licensing Experts Meeting November, 2005, Singapore

Licensing Export Control in China --Experiences and Challenges Chinas Export Control--Legal Basis and Licensing System Challenges in Export Control Licensing Meeting ChallengesChinas Measures and Experiences

Chinas Export Control--Legal Basis(I) Nuclear Field Regulations on the Control of Nuclear Export Regulations on the Control of Nuclear Dual-Use Items and Related Technologies Export Missile Field Regulations on the Export Control of Missiles and Missile-Related Items and Technologies Biological & Chemical Fields Regulations on the Export Control of Dual-Use Biological Agents and Related Equipment and Technologies Regulations on the Administration of Controlled Chemicals Measures on the Export Control of Certain Chemicals and Related Equipment and Technologies Conventional Arms Field Regulations on the Administration of Arms Export

Chinas Export Control--Legal Basis(II) the Foreign Trade Law of the PRC the Customs Law of the PRC the Criminal Law of the PRC the Administrative Punishments Law of the PRC the Regulations of the PRC on the Import and Export Control of Technologies the Regulations of the PRC on the Import and Export Control of Goods

China's Export Control Legislation Widely Embracing Following Practices Licensing System End-user and End-use Certification List Control Method Catch-all" Principle Principle of Nonproliferation-oriented Examination and Approval

Chinas Export Control-Licensing System(I) Provisional Measures on the Administration of Export Licenses on Sensitive Items and Technologies introduced in December 2003 It sets out the rules for the application, approval, issuance, use and verification of export license for dual-use items and technologies

Chinas Export Control-Licensing System(II) In China, the approval and issuance of export license for dual-use items and technologies are under the control of the Ministry of Commerce (MOFCOM) Only registered exporter is allowed to engage in exporting dual-use items and technologies

Chinas Export Control-Licensing System (III) -- what required for applying license the exporter is required to submit the following documents when applying for an export license: registration certificate for exporting dual-use items and technologies; end-use and end-user certificate; a copy of export contract; technical statement of the applied items; a brief introduction of the end-user; other documents

Principle of Nonproliferation-oriented Examination and Approval in Licensing Export Principle of Nonproliferation-oriented Examination and Approval in Licensing Export --Factors Affecting License Decision-making First, concerns from Chinas part Second, concerns for the items or technology to be exported Third, concerns for the recipient part

Factors Affecting License Decision-Making (I) Concerns from China s Part: Whether the export will directly or indirectly jeopardize China's national security or public interests, or constitute a potential threat; Whether it conforms to China's foreign policy and China s international obligations and commitments.

Factors Affecting License Decision-Making (II) Concerns for the items or technology to be exported: A thorough and independent assessment of the degree of proliferation risk will be made.

Factors Affecting License Decision-Making (III) Concerns for the recipient part: whether it has a program for WMD and their means of delivery; whether it has close trade ties with a country or region having a program of WMD and their means of delivery; whether it is subject to sanctions under a UN Security Council resolution; whether it supports terrorism or has any links with terrorist organizations; whether its domestic political situation and surrounding environment are stable; It s ability in exercising export control.

Challenges in Export Control Licensing(I) Intangible transfer of technology(ITT) ITT constitutes one of the greatest challenges for export control. Exporters could easily transfer a software or technology and bypass national export control by using: Inter-net service/ Fax Telephone

Challenges in Export Control Licensing(II) -- Licensing transfer of technology Even if the exporter goes to licensing authority applying for a license of a software or technology, due to its unique characteristics: First, its hard to define whether the transfer needs a license Second, if needed, its still not easy to determine whether to deny it or approve it

Challenges in Export Control Licensing(III) --End-user and End-use Assessment how to ensure that the items applied for export will not fall into the hands of wrong end-users how to assess that the items would not be used other than the certified end-use.

Meeting Challenges Chinas Measures and Experiences(I) Set up a "national expert supporting system for export control" engaging experts from nuclear, biological, chemical and missile fields Assisting competent authorities during the process of export license examination and approval Their expert view and assessment on items and technologies applied for export give great help in making correct and scientific judgments

Meeting Challenges Chinas Measures and Experiences(II) Requiring end-use & end-user certificates be issued by the recipient country s government or its authorized organs. Certificates must contain that without the written permission of the Chinese Government, the imported items and technologies will not be used for purpose other than the certified end-use, nor will transfer them to a third party. This could help reduce the possibility of items exported falling into the wrong hands.

Meeting Challenges Chinas Measures and Experiences(III) Launching a computer export control system by connecting the license approving and issuing authority, and the export clearance and supervision branch of the Customs within the same network. This has greatly enhanced the Custom officials capacity to supervise relevant exports and effectively prevented exporters from misusing export licenses.

Meeting Challenges Chinas Measures and Experiences(IV) Granting the Customs the authority to question whether the items from the exporters are controlled items and technologies, and to request the exporters to apply to competent government departments either for export license or for relevant certificates to show that the exports are not controlled items. This measure helps preventing exporters from cheating in export declaring.

More Information on Chinas Export Control Two White Papers Chinas Non-Proliferation Policy and Measures (December,2003) Chinas Endeavors for Arms Control, Disarmament and Non-Proliferation (September, 2005) Web-Sites