China Releases Draft Guidelines on Internal Compliance for Export Control of Controlled Chemicals

On October 29, 2026, the Ministry of Industry and Information Technology (MIIT) of the People’s Republic of China released the draft Guidelines on Internal Compliance for Export Control of Controlled Chemicals (Consultation Paper) to solicit public comments. The public comment period is open until November 29, 2026. Formulated in accordance with foundational statutory authorities—including the Export Control Law of the PRC, the Regulations of the PRC on the Administration of Controlled Chemicals, and the Regulations of the PRC on the Export Control of Dual-Use Items—the draft guidelines aim to promote the establishment and continuous enhancement of internal compliance programs (ICPs) among export operators of controlled chemicals.

Scope of Application

The draft guidelines apply to designated enterprises engaged in the export of Category I, Category II, and Category III controlled chemicals, as well as business entities that entrust such designated enterprises to export these chemicals on their behalf.

Ten Core Elements of Internal Compliance

The draft guidelines outline ten foundational elements for enterprises establishing an internal export control compliance system:

• Formulating a Compliance Policy: Establishing an explicit corporate commitment to export control regulations.
• Establishing an Organizational Structure: Designating clear governance bodies and operational roles responsible for compliance.
• Conducting Comprehensive Risk Assessments: Evaluating regulatory classifications, customers, end-users, destinations, and supply chain partners.
• Strengthening Compliance Screening & Due Diligence: Implementing end-to-end vetting across all transaction stages.
• Establishing Response Mechanisms for Violations: Formulating reporting, emergency response, and corrective action procedures.
• Ensuring Proper Recordkeeping: Maintaining comprehensive compliance and transaction documentation.
• Conducting Education and Training: Delivering ongoing compliance training to employees at all levels.
• Compiling Compliance Manuals: Documenting clear operational standards, guidelines, and procedures.
• Enhancing Compliance Auditing: Conducting periodic independent evaluations of the internal control framework.
• Promoting Digital and Intelligent Management: Leveraging IT tools and automated systems for restricted-party screening and regulatory tracking.

Key Compliance Requirements and Operational Controls

Specifically, the guidelines designate the enterprise’s chief executive officer or primary responsible person as the individual bearing primary accountability for export control compliance. Companies are expected to establish dedicated management departments, assign compliance personnel, and clearly delineate responsibilities across internal business units.

Risk assessments should be conducted periodically and follow a risk-calibrated approach, covering the regulatory classification of handled chemicals, the legitimacy of customers and end-users, declared end-uses, destination countries or regions, internal controls, and third-party commercial partners.

Transaction screening places heavy emphasis on lifecycle oversight, extending from pre-contract negotiations to post-export phases. Prior to executing contracts, companies must verify item classifications, confirm the authenticity of end-users and end-uses, evaluate transit routes, and assess risks of illicit diversion to third countries. Furthermore, contracts should include compliance covenants prohibiting use in violation of the Chemical Weapons Convention (CWC), prohibiting re-export or unauthorized transfer to third parties, and requiring cooperation with end-use verification checks.

Regarding controlled chemicals subject to export controls, the guidelines explicitly stipulate that goods must not be shipped under exemptions or disguised categories such as “samples,” “gifts,” or “repairs” prior to securing the necessary export licenses. Even after obtaining a license, enterprises must conduct pre-shipment re-screening of transaction parties and verify licenses against cargo and shipping documents. If any potential change regarding the end-user or end-use is identified, companies must halt shipment and report the issue to the competent authorities.

In addition, the guidelines recommend that transaction records—including contracts, export licenses, end-user and end-use certificates (EUCs), transaction vetting records, risk assessment reports, training logs, and audit reports—be retained for at least five years. Detailed management guidance is also provided regarding employee training programs, internal whistleblowing channels, remedial actions, periodic audits, and IT-based automated screening.

Business Implications

The draft guidelines serve as a benchmark for companies to establish an internal compliance mechanism proportional to their business scale and operational realities. As the document is currently in draft form, Japanese chemical manufacturers with production facilities in China, as well as Japanese companies importing or sourcing chemical products and raw materials from China, are advised to confirm whether their product portfolios fall under Categories I through III of controlled chemicals. Companies should review and benchmark their existing export compliance systems, particularly regarding export licensing, end-user and end-use due diligence, and record retention protocols.

Official Source

The original Chinese notice and text can be accessed via the MIIT official portal at:
https://www.miit.gov.cn/gzcy/yjzj/art/2026/art_68f61a00714b4beda81af019ab98dff5.html