Key Points:

  • Approval authority delegated to local COFCOMs
  • Proposals for Technology Import License valid for three years  

On February 5, 2009 the Ministry of Commerce of China (“MOFCOM”) issued the revised Administration of Technology Prohibited or Restricted From Import Procedures (“Procedures”), which take effect 30 days after their issuance.

China issues a periodically updated List of Technologies Prohibited or Restricted From Import, itemizing both import-prohibited technologies and technologies that are subject to licensing prior to import. Last year, MOFCOM sought public opinions on a revised draft of the Administration of Technology Prohibited or Restricted From Import Procedures because the State Council had decided to switch the approval authority for importing restricted technology from MOFCOM to MOFCOM’s local counterparts, the provincial and municipal government commissions of commerce (“COFCOMs”). Entities directly under the control of the central government are to follow the “territorial jurisdiction” principle and apply to the relevant local COFCOM for licenses to import restricted technologies.

Compared to the old procedures, which were vague on the subject, the revised Procedures clearly indicate that a Proposal for Technology Import License (“Proposal”) issued by a local COFCOM is valid for three years after issuance. Technology importers may enter into technology import contracts only after obtaining a Proposal.

The revised Procedures also set forth some new criteria for examining proposed technology importation. For example, COFCOMs are to assess whether import of a restricted technology will have any adverse effect on “establishing or accelerating the establishment of a specific industry within China,” “public morals” or “the lives or health of animals or plants.” Criteria remaining unchanged include the requirement that importation take place in compliance with China’s foreign trade policy, its commitments with other countries, its national security, the public interest, human lives and health, environmental protection, national industrial policies, China’s development strategies and promotion of its technology.

As was the case with the former procedures, importation of proprietary technologies related to national defense and the military is not subject to these Procedures