Import and export of commercial encryption products in China

The Export List represents the first list of controlled items since China’s new Export Control Law took effect. Commercial encryption items listed in this Export List are designated as “dual-use items and technologies”. The previous legal framework included general license requirements without a detailed export control list.

The Import List details the types of commercial encryption that may be subject to import licensing requirements under China’s Encryption Law. It supersedes and replaces previous versions of applicable catalogues. Commercial encryption items listed in this Import List are designated as “dual-use items and technologies”.

Changes under the Procedural Rules include shifts in responsible administrations in China:

• Before the new Export Control Law was in force, the import and export of encryption items in China were administered by the SCA. Importers and exporters of encryption items were required to apply for relevant licenses directly with the SCA or its local counterparts on provincial, regional, or municipal level.
• Since January 1, 2021, MOFCOM is the central authority to review and issue import and export licenses for dual-use items and technologies for the import and export of commercial encryption items as listed in the Export List and Import List. However, MOFCOM may consult with SCA and GAC accordingly.
• Importers and exporters of the commercial encryption products controlled under the Import List and Export List must submit license applications to MOFCOM (via its provincial branches). If the application is approved, MOFCOM will issue the appropriate license, which then needs to be presented to GAC as part of the applicable customs procedures.

It is to note that a “mass-market” exception is also included under the Encryption Announcement and the Export Control Law. But there is no exact definition included which items qualify for such exception. You can find some guidance under question 87 in SCA’s encryption Q&A, which details among other things that:

• Article 28 of the "Encryption Law" stipulates that the commercial encryption used in mass consumer products shall not be subject to import licensing and export control systems.
• Commercial encryptions used by mass consumer products are not subject to import licensing and export control systems, which can minimize the impact on trade. This is not only a common practice in the international community, but also in line with the country's existing commercial encryption import and export management practices.