Scope: Transactions potentially subject to US, Chinese, EU or other export controls
The item is a commercial component used in everyday equipment. The buyer says it is for a harmless project, but refuses to identify the final user and requests shipment through an unfamiliar intermediary.
Export-control end-use due diligence asks more than whether an item looks sensitive. The applicable rules can depend on the item, origin, destination, end user, end use and transaction participants.
Establish the technical facts
Collect specifications, manufacturer details and any classification information. Identify software, technology or technical assistance associated with the supply. A tariff code used for customs does not, by itself, establish the correct export-control classification.
Ask which jurisdictions’ rules may reach the transaction. The analysis for US-origin content or technology differs from the analysis under Chinese or EU controls.
Investigate inconsistencies
BIS guidance identifies circumstances that warrant further inquiry, including discrepancies between a customer’s business and the intended use. Its guidance advises resolving red flags rather than ignoring them. BIS Know Your Customer guidance.
Document explanations for unusual routes, specifications and payment structures. A signed end-use statement can be useful, but it does not remove contradictory facts from the assessment.
Determine whether permission is required
Classification is a step in the analysis, not the final authorization. Review relevant destination, party and end-use restrictions and whether an exception or license is available. Conditions and recordkeeping requirements also matter.
Avoid relying on a supplier’s previous shipment as proof that yours is permitted. The facts, parties and rules may differ.
Design an escalation process the team can use
Tell sales, engineering and logistics which changes require review. A new end user, destination or technical feature can invalidate the assumptions behind an earlier decision. Keep the screening and approval record connected to the order.
Where a possible violation is discovered, obtain advice on preservation, reporting and corrective options. Do not attempt to solve it by relabeling the goods or changing intermediaries.
Uncertain about a proposed shipment or technology transfer? Consult Jinyuan Law Firm with specifications, origin, parties and end use. Request a scoping assessment and identify the qualified export-control advice needed in each relevant jurisdiction.
General information only. Advice depends on the facts and applicable jurisdiction. Contact does not by itself create a lawyer-client relationship. Local-law advice may be needed outside mainland China.
