To further strengthen the administration and control over the export of dual-use Nuclear products and related technology ( the “items”), on Jan 16, 2007, the State Council promulgated a decision to revise the Regulations on the Export Control of Dual-use Nuclear Products and Related Technologies (“Revised Regulations”).

I. Scope of Application

The scope of application has been further clarified under the Revised Regulations. The “export” has been defined in a broader sense and refers to the export of the equipments, materials, software and related technologies outlined in the Dual-Use Nuclear Items and Related Technologies Export Control List (“Control List”) 1, including intangible technology transfer, and transfers in the forms of granting, exhibiting, technological cooperation, and foreign aiding, service, or others.

A new “catch-all” article has been added in the Revised Regulations providing that, the items not on the Control List shall also be subject to the same export control if the exporters know or have reasons to know, or are informed by the Ministry of Commerce (MOFCOM) that there is a risk of proliferation of nuclear weapons or the items to be exported may be used for the purpose of terrorism. It is also clarified that the Revised Regulations shall apply to the export of the items from bonded warehouses, bonded areas, export processing zones, or other special areas, or bonded areas under the special supervision of the customs house. The transit, transshipment, or pass of the items shall also be governed by this Revised Regulations.

In the meantime, to improve the efficiency of the administration for certain exports where the risks of nuclear proliferation appear low, such as exports for the inspection and repair which will be transported back within the stipulated period; or re-exports after being imported for the inspection and repair, the exporter can be exempted from furnishing the required documents upon approval by MOFCOM.

II. Regulatory Mechanism

According to the Revised Regulations, MOFCOM still acts as the principal authority for the export control of the items. All exporters of the items should be registered with MOFCOM. Without the proper registration, no entity or individual is permitted to engage in such exports. The exporter shall submit an application to MOFCOM and provide a written guarantee from the recipient government. MOFCOM shall examine the application jointly with SAEA or other relevant authorities. If foreign policy concerns are involved, MOFCOM shall seek opinions from the Ministry of Foreign Affairs. In the case that the export of such items shall have significant impact on the national security, public interests, or foreign policies, it shall be subjected to final approval by the State Council. Upon approval, MOFCOM shall issue an export license. Only with the export license may the applicant clear Customs to export the items.

III. Supervision and Enforcement

The supervision and enforcement has been strengthened under the Revised Regulations. In particular, a new inquiry procedure have been established. Under this procedure, Customs may put forward a challenge on whether a license should be obtained for the items to be exported, and may require the exporter to apply to MOFCOM for such license or a certificate that the export falls out of the scope of export control.

There are detailed sanctions for the violation of the export control rules provided in the Revised Regulations. In addition, other provisions have also been added to require the exporters to establish an internal control system. Under such provisions, the exporters shall keep the related documents for at least five years for future possible inspection. MOFCOM may inspect and make a copy of such documents.

The Revised Regulations became effective on the date of promulgation.