III. Non-Proliferation Export Control System

Effective control of materials, equipment and technologies that could be used in the development and production of WMD and their means of delivery is an important aspect in a country’s implementation of its international non-proliferation obligation, and an important guarantee for the success of the international non-proliferation efforts. As a country with some sci-tech and industrial capabilities, China is well aware of its non-proliferation responsibility in this field. For a long time, the Chinese government has adopted rigorous measures both for the domestic control of sensitive items and technologies and for their export control, and has kept making improvements in light of the changing situation.

For a fairly long time in the past, China practiced a planned economy, whereby the state relied mainly on administrative measures for import and export control. This proved to be effective for implementing the non-proliferation policy under the then prevailing historical conditions. But with the deepening of China’s reform and opening-up, and especially following the country’s entry into the World Trade Organization (WTO), tremendous changes have taken place in the environments of China’s domestic economy and foreign trade. So far, China has initially established a socialist market economy, and its non-proliferation export control pattern has changed from an administrative control to a law-based control.

In recent years, the Chinese government has constantly strengthened the work of building the legal system to bolster non-proliferation on the principle of rule of law to ensure the effective enforcement of its non-proliferation policy. China has attached great importance to studying the current international standards of non-proliferation export control. Integrating the multinational export control mechanism and the valuable experience of other countries with its own national conditions, China has widely adopted the current international standards and practices, vigorously strengthened and improved the system for ensuring non-proliferation export control, and formulated and enforced a number of laws and regulations, which form a complete system for the export control of nuclear, biological, chemical, missile and other sensitive items and technologies, and all military products, and provide a full legal basis and mechanism guarantee for the better attainment of the non-proliferation goal. This export control regime has embraced the following practices:

Export Registration System All exporters of sensitive items or technologies must be registered with the competent departments of the central government. Without such registration, no entity or individual is permitted to engage in such exports. Only designated entities are authorized to handle nuclear exports and the export of controlled chemicals and military products. No other entity or individual is permitted to go in for trade activities in this respect.

Licensing System It is stipulated that the export of sensitive items and technologies shall be subject to examination and approval by the competent departments of the central government on a case-by-case basis. No license, no exports. The holder of an export license must engage in export activities strictly as prescribed by the license within its period of validity. If any export item or contents are changed, the original license must be returned and an application made for a new export license. When exporting the above-mentioned items and technologies, an exporter shall produce the export license to the Customs, go through the Customs formalities as stipulated by the Customs Law of the People’s Republic of China, and the relevant control regulations and control measures, and shall be subject to supervision and control by the Customs.

End-User and End-Use Certification An exporter of sensitive items and technologies is required to provide a certificate specifying the end-user and the end-use, produced by the end-user that imports them. Different kinds of certificates must be produced, depending on the circumstances and particularly the sensitivity of the exported items or technologies. In some cases, the certificates must be produced by the end-user and authenticated by the official organ of the end-user’s country and the Chinese embassy or consulate in that country, while in others, they must be produced by the relevant government department of the importing country. The end-user must clarify the end-user and end-use of the imported materials or technologies in the above-mentioned certificates, and definitely guarantee that without permission from the Chinese government, it shall not use the relevant item provided by China for purposes other than the certified end-use, or transfer it to a third party other than the certified end-user.

List Control Method China has drawn up detailed control lists of sensitive materials, equipment and technologies. In the nuclear, biological and chemical fields, the relevant lists cover virtually all of the materials and technologies included in the control lists of the Zangger Committee, the Nuclear Suppliers’ Group, the Chemical Weapons Convention (CWC), and the Australian Group. In the missile field, the scope of the Chinese list is generally the same as the Technical Annex of the Missile Technology Control Regime (MTCR). In the arms export field, the Chinese government also drew on the experience of the relevant multilateral mechanism and the relevant practice of other countries when it first formulated and issued the arms export control list in 2002. The Chinese government will make timely adjustments to the above lists in light of actual conditions.

Principle of Nonproliferation-oriented Examination and Approval Before making a decision on whether to issue an export license, the competent department will give overall consideration to the possible effect of the relevant exports on national security and the interests of general public, as well as its effect on international and regional peace and stability.

The specific factors for reference in the examination and approval process include China’s incumbent international obligations and international commitments, whether the export of the sensitive items or technologies will directly or indirectly jeopardize China’s national security or public interests, or constitute a potential threat, and whether it conforms to the international non-proliferation situation and China’s foreign policy.

An assessment of the degree of proliferation risk of exporting a sensitive item or technology shall be made by an independent panel of technical experts organized by the examination and approval department. The assessment will serve as an important reference in the examination and approval process.

The examination and approval department shall also make an overall examination of the situation of the country or region where the end-user is located. It shall give special consideration to whether there is any risk of proliferation in the country where the end-user is located or any risk of proliferation to a third country or region, including: whether the importing country will present a potential threat to China’s national security; whether it has a program for the development of WMD and their means of delivery; whether it has close trade ties with a country or region having a program for the development of WMD and their means of delivery; whether it is subject to sanctions under a UN Security Council resolution; and whether it supports terrorism or has any links with terrorist organizations.

Moreover, the examination and approval department shall also pay attention to the ability of the importing country in exercising export control and whether its domestic political situation and surrounding environment are stable. The focus of examination of the end-user and end-use is to judge the ability of the importing country to use the imported items or technologies, and to assess whether the importer and the end-user are authentic and reliable, and whether the end-use is justified.

“Catch-all” Principle If an exporter knows or should know that there is a risk of proliferation of an item or technology to be exported, the exporter is required to apply for an export license even if the item or technology does not figure in the export control list. When considering an export application or deciding on whether to issue an export license, the export examination and approval departments shall make an overall assessment of the end-use and end-user of the item or technology to be exported and the risk of proliferation of WMD. Once such a risk is identified, the competent departments have the right to immediately refuse the requested export license, and terminate the export activity. Moreover, the competent departments may also exercise, on an ad hoc basis, export control on specific items not contained on the relevant control list.

Penalties Exporters who export controlled items or technologies without approval, arbitrarily export items beyond the approved scope, or forge, alter, buy or sell export licenses shall be investigated for criminal liability in accordance with provisions in the Criminal Law of the People’s Republic of China (PRC) on smuggling, illegal business operation, disclosure of state secrets or other crimes. For cases that do not constitute crimes, the competent government department(s) shall impose administrative sanctions, including warning, confiscation of illicit proceeds, fines, suspension or even revocation of foreign trade licenses.