Trading with China requires navigating complex compliance requirements from both Chinese and home country regulations. Here's what foreign companies need to know.
China's Trade Regulations
Export Control Law
- Controls on sensitive technologies
- Dual-use items restrictions
- End-user verification requirements
- License requirements for controlled items
Import Restrictions
- Prohibited goods list
- Restricted goods requiring licenses
- Quota systems for certain products
- Certification requirements
Dual Compliance: Foreign companies must comply with both Chinese regulations AND their home country's export controls when trading with China.
Home Country Considerations
US Export Controls
- EAR (Export Administration Regulations)
- Entity List restrictions
- Military End-User rules
- De minimis rules for foreign-made items
EU Export Controls
- Dual-use regulation
- Member state licensing
- End-use controls
Compliance Program Elements
- Written compliance policies
- Product classification procedures
- Customer/supplier screening
- End-use verification
- Record keeping systems
- Training programs
- Audit procedures
Red Flags to Watch
- Customer reluctant to provide end-use information
- Unusual shipping routes
- Cash payments for expensive items
- Orders inconsistent with customer's business
- Requests to avoid documentation
Penalties for Non-Compliance
- Substantial fines
- Loss of export privileges
- Criminal prosecution
- Reputational damage
- Debarment from government contracts
Best Practices
- Classify products before trading
- Screen all parties to transactions
- Document compliance efforts
- Stay updated on regulatory changes
- Seek legal advice for complex situations
Trade Compliance Help
I help foreign companies develop compliance programs and navigate China trade regulations.
Contact MeDisclaimer: This article is for informational purposes only and does not constitute legal advice. For advice on your specific situation, please contact me directly.
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