On October 30 China’s Ministry of Commerce (“MOFCOM”) issued on draft Measures on Dual-use Items Export Control Investigation and Enforcement (the “Draft”), soliciting public comments until November 29, 2026.
For the first time, the Draft explicitly sets out procedures for MOFCOM’s own enforcement arm, within its Bureau of Industry, Security, Import and Export Control, to enforce export control regulations through investigative measures, such as interrogation, seizure and detention of relevant items, assets, documents and facilities.
This marks the evolution of China’s export control enforcement to a new level, where Customs inquiries at the border focusing on tangible shipments are no longer the only or primary means of enforcement.
Another noteworthy development is that, while voluntary disclosure remains optional and failure to make a voluntary disclosure is not an aggravating factor, the Draft identifies as a penalty mitigation factor the voluntary disclosure of detailed violative conduct to MOFCOM in writing within three months of proactively discovering such conduct. This factor is listed separately from other factors, such as the more general reference to proactively reporting violative conduct to MOFCOM, suggesting that the former may be entitled to a greater level of mitigation if both the timeline and granularity requirements are satisfied. This three-month time limit is prescribed for the first time in MOFCOM guidance.
This development requires companies to upgrade their internal compliance programs accordingly, as more robust, risk-based internal controls to promptly identify potential violations and introduce remedial actions, such as voluntary disclosure, will become increasingly important. The direct involvement of MOFCOM’s own enforcement arm in export control investigations also suggests a potential expansion of enforcement into areas involving intangible transfers, which are outside Customs’ remit.
