Export ban of critical minerals to the US
Regulations on Export Control of Dual-Use Items
Energy law
Hong Kong: Waste Disposal (Amendment) Bill 2024
Export ban of critical minerals to the US
On December 2, just within the next 24 hours after the US announced further export controls on advanced semiconductors (see below) in relation to China, China announced new restrictions relating to critical minerals originating or exported from China, including a ban on the export of gallium, germanium, antimony, and superhard materials to the US, and tightened scrutiny over end-use and end-user controls in relation to graphite related dual-use items to be exported to the US.
Impact: The export ban is expected to further disrupt the supply chains of multinational businesses which source the relevant materials, with the US as the potential destination of their products. Further trade restrictions are expected as the US and China strengthen their respective trade controls. Businesses should therefore closely monitor developments to stay informed.
Regulations on Export Control of Dual-Use Items
On December 1, China’s new Regulations on export control of dual-use items, which are goods, technologies and services with both civilian and military applications, entered into force. Key features of the new regime include:
introducing the extraterritorial effect of PRC export controls
establishing a simplified licensing arrangement for the temporary exports of dual-use items
expanding the grounds for designating persons on the ‘Control List’ identifying importers and end-users of concerns, and introducing a ‘Watch List’
clarifying the requirement to re-apply for or amend export licenses in cases of ‘key’ or ‘non-key’ modifications of an intended export
imposing new reporting obligations on trading businesses and related service providers; and
introducing one unified list identifying items subject to export controls and a new classification system
Impact: The Regulations mandate strict compliance with PRC export controls rules, and create potential liability not only for PRC exporters but also service providers involved in the dealings. Non-PRC entities such as foreign importers and end-users may also be scrutinized and subject to trade restrictions in the future if they are found to have breached relevant end-user or end-use restrictions. To ensure compliance, businesses are advised to revisit their current compliance measures in relation to exports from the PRC and strengthen their global trade compliance program accordingly.
Energy law
On November 9, China’s first energy law was approved. Effective from January 1, 2025, the law aims to strengthen the legal framework for energy security and promote green, low-carbon practices.
The law covers energy planning, development and utilization, market systems, reserves and emergency measures, technology innovation, and legal responsibilities. It sets clear objectives for green energy, supports mechanisms like green electricity certificates, and encourages renewable energy development, including wind and solar power.
Impact: The new energy law effectively promotes the development of renewable energy, which may lead to lower investment barriers in it. This is expected to stimulate investments in and demand for renewable solutions within the supply chain.
Hong Kong: Waste Disposal (Amendment) Bill 2024
On October 18, the Waste Disposal (Amendment) Bill 2024 was published. The bill aims to align with the Basel Convention’s amendments on the control of transboundary movements of electrical and electronic waste (EEW) and ensure proper management of the same. This bill will expand the scope of materials subject to import and export controls from hazardous EEW to cover all EEW under the permit control system, whereby exports will require prior consent from the import state and any transit states, and imports will only be permitted if it is satisfied that the EEW will be managed in accordance with laws. The amendments are set to take effect on January 1, 2025.
Impact: Once the Bill takes effect, importers and exporters of EEW will have to apply for a permit before effecting the proposed shipments. Where businesses fail to ensure compliance, they may be faced with seizures of their shipments and potential enforcement actions. To mitigate risks, businesses should enhance their waste management practices, and ensure robust tracking systems for EEW. Proactive adaptation will be crucial to mitigating infringement risks and maintaining supply chain resilience.
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