China Implements Strict Export Controls on Dual-Use Items to US to Safeguard National Security

On December 3, 2024, the Ministry of Commerce of China announced that it will strengthen the control on dual-use items exported to the United States to safeguard national security and interests and to fulfill international non-proliferation obligations. The announcement takes effect immediately from the date of publication and could have a great impact on the semiconductor industry.

Relevant enterprises please note, the following materials exported to the USA will be banned or strictly restricted:

1. The export of dual-use items to military users or for military purposes in the USA is prohibited;
2. In principle, the export of dual-use items related to gallium, germanium, antimony, and superhard materials to the USA will not be permitted; and
3. The export of dual-use graphite items to the USA will be subject to stricter end-user and end-use reviews.

The announcement emphasizes that any organization or individual from any country or region, if found violating the above regulations by transferring or supplying dual-use items originating from the People's Republic of China to organizations or individuals in the USA, will be held legally accountable.

CIRS Warm Reminder

This export control policy may lead to increased supply chain costs in certain industries in the USA, for example, gallium and germanium are key elements in semiconductor manufacturing, widely used in integrated circuits, microprocessors, and sensors. The export controls could lead to increased production costs in the US semiconductor industry. On the other hand, the policy poses challenges for related enterprises within China in terms of supply chain management, cost control, market competitiveness, and legal compliance. Enterprises need to reassess their supply chain strategies, find alternative materials or markets, and strengthen internal compliance management to cope with the impacts of policy changes.

If you need any assistance or have any questions, please get in touch with us via service@cirs-group.com.

Further Information

Ministry of Commerce Announcement No. 46 of 2024

China to Implement New Export Control Regulations for Dual-Use Items from December 2024