New export rules in China: EU companies affected as well

The Chinese Ministry of Commerce (“MOFCOM”) recently tightened its export control regulations considerably, including with announcements 61 and 62 of October 9, 2025. These announcements particularly affect non-Chinese companies. This article provides a brief overview of Chinese export control law.

General presentation

China introduced export control regulations in 2020, and these requirements are being expanded on an ongoing basis. In general, trade in goods is regulated, but software, technology, and services are also subject to regulation. MOFCOM has also issued guidelines on internal compliance programs in the area of export control. Companies meeting these requirements can expect to benefit from simplified licensing procedures. In addition, comprehensive requirements are in place to prevent the extraterritorial application of embargoes and sanctions in China, such as the Blocking Statute and the Anti-Foreign Sanctions Law. Violations of export control requirements are sanctioned not only with penalties but also with blacklisting.

Export control regulations are generally based on EU and US models. Among other things, they regulate trade in certain listed and technically specified dual-use goods, but also establish re-export control rules. Depending on the circumstances and the goods involved, these rules may also apply to products processed abroad. Under Chinese law, re-export occurs, for example, when the end use or end user of a good subject to the laws is changed. This also applies if such changes are made only within the territory of the EU or a nation state. Rules for products processed abroad apply to activities related to rare earths. These are described in more detail below.

Applications for licenses

MOFCOM is responsible for issuing licenses, including for re-exports, and is required to issue licenses or reject applications within 45 days. From a European perspective, it is particularly noteworthy that, depending on which rule applies, the Chinese exporter is responsible for applying for licenses from third-country companies. This also applies if the exporter has already delivered the goods.

Tighter restrictions on trade with the US or rare earths

Since December 2024, China has imposed an export embargo on the US. This applies not only to military end uses and users in the US, but also to products that can be used directly or indirectly for semiconductor manufacturing (gallium, germanium, antimony, and superhard materials). Companies based outside China that act contrary to the regulations are also affected by the embargo regulations.

In April 2025, export control rules for trade in rare earths, compounds, alloys, and mixtures for magnet production were tightened across the board. Goods described in more technical detail are now treated as dual-use goods, meaning that their export is subject to special controls. The requirements were expanded in October to include, among other things, superhard materials.

Re-export rules: Foreign countries affected as well

Finally, China now has also specified a re-export rule for products processed abroad. Such rule affects selected goods in the rare earths sector. Trade in products further processed in this sector is already regulated by Chinese law from a de minimis threshold of 0.1 %. In order to determine the threshold, the value of the goods controlled by Chinese law is set in relation to the value of the end product. There are exceptions to the requirements in certain areas, such as emergency medical supplies. The processing of materials for permanent magnets, for example, is affected by the regulations and is therefore subject to special controls.

Challenges for foreign companies

The requirements pose considerable challenges for non-Chinese companies. The legal terms are sometimes vague, and in some cases the interpretations differ significantly from those of the EU. In addition, European companies in particular face the challenge of maintaining close economic relations with the US and China but, depending on the economic sector, comprehensive global trade in goods from the respective jurisdiction is made considerably more difficult. Finally, the different legal requirements of the EU, the US, and China contradict each other. Even if non-national authorities may have only limited access rights to EU companies and individuals due to state sovereignty, they can still be significantly affected by sanctions such as blacklisting. Developments in Chinese law should be monitored accordingly.

We support you in securely implementing the new Chinese export control regulations and minimizing risks in global trade. Please feel free to contact us for assistance.