Introduction

The first half of 2026 has witnessed significant developments in the legal framework and regulatory practice governing China’s export controls. From legislation to enforcement, these developments collectively reflect a more systematic and integrated approach to export control compliance. This article provides an overview of five key developments from the period.

I.Provisions of the State Council on Outbound Investment

The Provisions of the State Council on Outbound Investment (“the Provisions”) impose, among others, specific compliance requirements on cross-border activities, including exports of goods, technologies, services, and data. The Provisions took effect on July 1, 2026.

i. Compliance Framework under Article 13

Article 13 of the Provisions’ requirements can be organized, for analytical purposes, into three main parallel compliance obligations applicable to outbound investment activities.

(1) Technology Export

Article 13 reinforces the compliance reach of the Regulations on the Administration of Import and Export of Technologies (“the Regulations”) and the Catalogue of Technologies Prohibited or Restricted from Export (“the Catalogue”) by extending the scope of regulated conduct to cover technology transfers embedded in outbound investment structures.

In the context of outbound investment, this captures not only direct technology sales but also licensing arrangements, technical services, and technology contributions to equity.

(2) Export Control

Outbound investment activities must comply with the Export Control Law of the People's Republic of China, the Regulations on Export Control of Dual-Use Items, and the Regulations on Administration of Arms Export. Specifically, outbound investment activities may trigger export control compliance requirements under Article 13 where the investment structure involves cross-border movement of controlled items, whether through supply chain reconfigurations, or through collaborative development arrangements with foreign parties.

(3) Data Outbound Transfer

While Article 13 addresses the export or transfer of “relevant data” as one category of controlled items subject to export control review, this obligation is analytically distinct from, and may apply in parallel with, the data-specific compliance regime under the Data Security Law and the Personal Information Protection Law. Where an outbound investment involves the cross-border transfer of data, the investor may need to satisfy both regimes independently: export control clearance under Article 13 (where the data falls within a controlled items catalogue), and separately, classification of data as important data or personal information under the Data Security Law and the Personal Information Protection Law, triggering the application of the appropriate compliance mechanism—security assessment, standard contractual clauses, or personal information protection certification.

ii. National Security Review under Article 15

Article 15 establishes a national security review system for outbound investment, with an explicit inclusion of export control-related assessments. The review applies to outbound investment involving sensitive industries, sensitive technologies, or sensitive data, evaluating the national security implications of technology exports, supply chain security risks, technology dependency vulnerabilities, and the impact of data outbound transfers.

iii. Liability for Violations under Article 28

Article 28 prescribes administrative penalties for violations related to the national security review regime, including orders to cease investment, disposal of equity interests or assets within specified timeframes, monetary fines.

Liability under Article 28 operates in conjunction with, not in replacement of, penalties under the Export Control Law, the Data Security Law, and the Personal Information Protection Law, and the other applicable laws. In cases of serious criminal conduct, the matter is transferred to criminal enforcement authorities.

Given that the Provisions represent a shift to a holistic compliance management approach, enterprises subject to the outbound investment security review regime must now proactively implement pre-investment compliance arrangements.

II.Japan-Specific Export Control Measures

On January 6, 2026, the Ministry of Commerce of China (“MOFCOM”) issued Announcement No. 1 of 2026 (“Announcement No. 1”), imposing export controls on dual-use items in relation to Japan as part of its broader export control legal framework for targeted export control measures against specific countries.

i. Scope of Application

Announcement No. 1 applies to all dual-use items exported from China to Japan where the end-user is a military user, the end-use is for military purposes, or the end-use would otherwise contribute to enhancing Japan’s military capabilities. Its scope extends beyond direct exports, covering any transfer of Chinese-origin dual-use items to Japanese organizations or individuals, regardless of the country or region through which the transfer occurs.

ii. Key Policy Features

Unlike prior measures that targeted specific entities through designation mechanisms or specific items, Announcement No. 1 operates at the country level—applying to all dual-use items destined for Japan, where the end use or end user is military-related.

This shift enables more comprehensive supervision that  addresses risks of circumvention through third-country transit, re-exports, or misrepresentation of end-use.

III.Designations of the Export Control Entity

In the first half of 2026, MOFCOM issued separate announcements relating to the Export Control Entity List and the Watch List. With respect to the Export Control Entity List, MOFCOM issued a total of four announcements adding entities from the EU, the United States, and Japan.

Notably, these updates introduced significant enhancements in listing detail compared to prior practices. Starting with Announcement No. 20 of 2026, the listings began to include full addresses and postal codes. Announcement No. 23 of 2026 further expanded this by adding commonly used aliases alongside addresses and postal codes, facilitating more precise identification in international transactions. The inclusion of more detailed information reflects China’s broader effort to enhance the practical enforceability and precision of its export controls by reducing ambiguity in entity identification and compliance management.

In addition, MOFCOM applied the Watch List mechanism for the first time. On two separate occasions, it designated Japanese companies whose end-users or end-uses cannot be verified.

IV.Whistleblower and Report Mechanism for Strategic Mineral Dual-Use Export Control Violations

On June 24, 2026, MOFCOM issued Announcement No. 26 of 2026 (“Announcement No. 26”), establishing a refined framework for whistleblowing and reporting suspected export control violations involving strategic mineral dual-use items.

i. Reportable Conduct

Announcement No. 26 enumerates thirteen categories of reportable conduct, which may be grouped into multiple thematic areas:

(1) Direct Export Violations

This cluster captures direct export violations: export without a license; export beyond the scope, conditions, or validity period of the license; export of prohibited items; and circumvention of licensing requirements through structural modification, disassembly into components or parts, or diversion through third countries or regions.

(2) Illegal Technology Transfers

A distinct category addresses the illegal outbound transfer of controlled strategic mineral-related technology. This covers traditional trade exports and other channels, such as intellectual property licensing, investment, exchange, joint R&D, employment arrangements, and consultancy services.

(3) Third-party Service Provider Liability

It constitutes a reportable offense for service providers—including agents, freight forwarders, courier services, customs brokers, third-party e-commerce platforms, and financial institutions—to knowingly provide services to export operators engaged in violations.

(4) Aiding and Abetting Circumvention

Persons who instigate or assist export operators, importers, or end-users in circumventing strategic mineral dual-use export control regulations are subject to reporting.

(5) Transactions with Listed Entities

Export operators that conduct unauthorized transactions with importers or end-users designated on the Export Control Entity List restrictions are subject to reporting.

(6) Exports to Prohibited End-Uses

Export operators that know, or should know, that strategic mineral-related goods, technology, or services outside the Export Control Item List or a temporary control list are intended for prohibited end-uses under Article 12 of the Export Control Law, but fail to apply for a license from MOFCOM, are subject to reporting.

(7) Breach of Commitments

Domestic importers and end-users that violate commitments made to MOFCOM are subject to reporting.

(8) Improper Foreign Government Engagement

Persons who improperly accept, or commit to accept, requests from foreign governments for access, on-site verification, or similar measures related to strategic mineral dual-use export controls are subject to reporting.

Finally, a catch-all provision captures other violations of strategic mineral dual-use export control laws and regulations.

ii. Reporting Procedures

Reports may be submitted through the online reporting platform on the MOFCOM website or by telephone during working hours. The reporter is responsible for the authenticity of the information provided, which shall be in Chinese.

MOFCOM will not accept reports that: (i) fall outside the enumerated categories of Announcement No. 26; (ii) lack key elements to serve as actionable leads, even after requests for supplementary information; (iii) duplicate previously handled reports based on identical facts or grounds; or (iv) are otherwise ineligible for acceptance under applicable provisions.

For real-name reports, MOFCOM will provide feedback on acceptance. Where the reported facts are verified, real-name reporters may be eligible for rewards in accordance with applicable regulations. MOFCOM will coordinate with relevant agencies to strictly distinguish malicious reports and deal with them in accordance with the law.

iii. Voluntary Self-Reporting and Mitigation

Announcement No. 26 establishes a voluntary disclosure mechanism for exporters as well as other entities and individuals. Export operators or other entities that discover violations or believe they may have violated relevant regulations are encouraged to proactively report to MOFCOM. Crucially, such voluntary disclosure will be considered a mitigating factor, potentially leading to leniency in the adjudication of related violations.

Announcement No. 26 signals enhanced enforcement in strategic mineral sectors. By integrating a comprehensive reporting framework, real-name reporting rewards, and a voluntary disclosure mechanism, MOFCOM has constructed a multi-layered enforcement approach that complements traditional license-based controls.

V.Export Declaration Requirements for Specific Items

The General Administration of Customs of China (“GACC”) issued Announcement No. 77 of 2026 (“Announcement No. 77”) and Announcement No. 78 of 2026 (“Announcement No. 78”), both effective June 30, 2026.

These announcements establish specific declaration requirements for exports of controlled items across general trade, Category C express consignments, and cross-border e-commerce retail exports.

The new requirements apply to three primary customs documents: the Customs Export Goods Declaration Form, the Category C Express Consignment Declaration Form, and the Cross-Border E-Commerce Retail Export Declaration List.

i. Key Declaration Requirements

(1) Controlled Items

For controlled items, the declaration must state “属于出口管制物项” (Export-Controlled Item) in the “Remarks” column of the Customs Export Goods Declaration Form, together with the corresponding dual-use item export control code.

(2) Non-Controlled Items Nearing Thresholds

For non-controlled items approaching controlled thresholds—either due to similar technical characteristics or because they meet controlled parameters despite a non-qualifying end-use—the declaration must state “不属于出口管制物项” (Non-Export-Controlled Item) in the “Remarks” column of the respective documents.

(3) Declaration Elements for Prohibited and Restricted Items

Export operators must consult the declaration elements for prohibited and restricted items and determine the applicable “Standardized Declaration Category Code” for the goods. Further details are outlined in Announcement No. 40 of 2026 issued by GACC.

(4) Overseas Consignee and Manufacturer Information

The full legal name of the overseas consignee, in either Chinese or English, must be entered in the designated fields, with specific requirements varying by export mode.

(5) Cross-Border E-commerce Specifics

For cross-border e-commerce, simplified declaration is not permitted. The complete tariff code must be declared. Additionally, the “Production and Sales Unit” column must identify the actual domestic manufacturer or sales entity, rather than an e-commerce platform or agency enterprise.

ii. Special Customs Supervision Areas and Bonded Customs Supervision Sites

For goods moving between, or entering from outside, special customs supervision areas and bonded customs supervision sites within the territory of the People’s Republic of China, declaration must follow the applicable regulations.

Crucially, these announcements emphasize that customs clearance is based on a formal review of submitted information, and misdeclarations may expose export operators to liability.

VI.Key Takeaways for Multinationals

The first half of 2026 saw a series of regulatory and enforcement developments across China’s export control framework, spanning outbound investment compliance, country-specific controls, entity list expansions, the whistleblower mechanism, and customs declaration requirements. These developments collectively point to a more refined, integrated, and proactive regulatory posture.

To successfully navigate this evolving landscape, enterprises engaged in cross-border trade or investment activities involving China should consider the following compliance measures:

i. Continuously Monitor Regulatory Developments

Assign dedicated personnel or engage professional advisors to track legislative and enforcement updates and conduct periodic compliance reviews to ensure ongoing alignment with China’s dynamic regulatory requirements.

ii. Fortify Internal Compliance Programs

Establish or strengthen internal compliance programs to stay on top of regulatory developments. For export operators in strategic mineral-related industries, the enhanced whistleblower mechanism and reporting framework signal increased enforcement scrutiny in the coming months.

iii. Correctly Identify and Classify Export-Controlled Items

Given the enhanced declaration requirements, enterprises must classify and identify all export products to be exported prior to customs clearance based on the applicable export control classification.

iv. Ensure Accurate and Complete Customs Declarations

All declared information—including item descriptions, technical specifications, end-use, and overseas consignee information—must be truthful, complete, and consistent with supporting documents. E-commerce exports must pay special attention to providing complete tariff codes and accurate manufacturer or seller details to avoid unnecessary clearance delays.

v. Leverage Voluntary Disclosure

If potential violations are discovered, the enterprises are strongly advised to carefully weigh the benefits of proactive self-reporting to MOFCOM. Timely voluntary disclosure may serve as a mitigating factor and can secure leniency during administrative adjudication.