Mid October 2020 the National People’s Congress of China passed a new export control law with a wide, extraterritorial scope and tighter control measures to safeguard national’s security interests. Items under control by this new law are dual use, military and nuclear goods, technology and services as well as items, which are subject to National Security.
The law enables China to take countermeasures against any country, which abuses export control measures against or is a perceived threat to China’s national security interests.
Companies involved in the export and import of Chinese goods, technologies and services, are directly impacted. Management of these supply chains will become more difficult and riskier, with an ultimate threat of being excluded from the Chinese market due to
- Noncompliance with the export control law by either the supply chain partner or themselves, or
- Items procured are declared controlled due to national security interests, or
- Importers or their supply chain partners becoming a target of Chinese retaliation.
Multinational companies may find themselves between a rock and a hard place when they try to comply with both the US and CN exterritorial export control regulations. Therefore, rethinking of the supply chain strategy for any impacted product / industry is strongly advised.
If you want to learn about your potential exposure and consequences, please contact:
Christine Frankenberger
PwC | Lead Export Control | Customs & International Trade
Office: +41 58 792 4690 | Mobile: +41 79 359 0638 | Main: +41 58 792 3090
Email: christine.frankenberger@pwc.ch
Image source: http://unsplash.com
Michaela Merz 