The People’s Republic of China (PRC) is imposing export restrictions on products related to gallium and germanium – metals used in computer chips and other products – in order to protect national security.
On July 3, the PRC Ministry of Commerce and General Administration of Customs jointly issued announcement No. 23, which provides that starting August 1, the export of specified gallium- and germanium-related products (covered products) will be subject to export licenses.
The restrictions impact eight types of gallium-related products and six types of germanium-related products.
Requirement for export license
The Announcement No. 23 is not a complete ban on the export of the covered products. But it does require the companies that wish to export any of the covered products to first obtain from the PRC Ministry of Commerce a dual-use item and technology export license for such exports.
Exporting the covered products from China without obtaining the export license, or in violation of the terms and conditions of the licenses, will give rise to administrative sanctions and possible criminal liabilities.
To apply for the licenses, an exporting company is required to submit the application package to the PRC Ministry of Commerce through the department of commerce of the province where the exporting company is located by submitting documents, such as the original or scanned/photocopy of the export contract, certificates of end-use and end-user, and statement/descriptions of the importer and the end-use customer.
Upon receipt of the application package, the PRC Ministry of Commerce (together with other relevant government agencies) will review the application and decide whether to grant the licenses.
If the proposed export of any covered products is considered (presumably by the PRC Ministry of Commerce together with other relevant government agencies) to have material or significant impact on the PRC national security, the PRC Ministry of Commerce together with other relevant government agencies shall submit the application package to the State Council for a final decision.
Given that no implementing rules of the Announcement No. 23 have been issued, and no application has been received by the PRC Ministry of Commerce, the practical impact of the new export licensing requirement remains to be seen.
Co authored by Hong Zhao.