受国际权威法律评级机构钱伯斯(Chambers and Partners)邀请，锦天城律师事务所合伙人邱梦赟为其撰写《全球法律指南：国际贸易——趋势与发展2026》之中国篇。

Contributing Article for Chambers Global Practice Guides: International Trade – Trends and Developments 2026, China Chapter 

Authored by Mengyun (Sarah) Qiu, Partner at AllBright Law Offices

文章摘要

Article Overview

邱梦赟律师精析2025年商务部第61、62号公告，其将稀土物项及技术管制扩展至域外，首度“激活”《两用物项出口管制条例》第49条，并引入出口管制管控名单和关注名单的“50%穿透规则”。尽管相关措施已被商务部、海关总署2025年第70号公告暂缓执行，但本文为企业在此窗口期建立中国出口管制合规体系提供了关键指引，尤其是涉稀土供应链的全球业务企业。

Mengyun (Sarah) Qiu provides a detailed analysis of China's Ministry of Commerce 2025 Announcements No. 61 and No. 62, which extend export control requirements for rare-earth items and related technologies to extraterritorial jurisdiction. These announcements mark the first operationalization of Article 49 of the People’s Republic of China Export Control Regulations for Dual-Use Items (the “2024 Regulations on Export Control of Dual-Use Items”) and introduce a groundbreaking "50% Penetration Rule" applicable to entities on the Control List and Watch List. Although the implementation of these measures has been temporarily suspended by Announcement No. 70 (co-issued by the Ministry of Commerce and the General Administration of Customs in 2025), this article offers crucial guidance for enterprises—particularly global businesses involved in rare-earth supply chains—to establish a robust China export control compliance system during this critical window period.

正文：全球法律指南：国际贸易——趋势与发展2026之中国篇

Chambers Global Practice Guides:

 International Trade – Trends and Developments 2026, China Chapter 

In 2025, China’s export control regime underwent significant adjustments and enhancements amid heightened international geopolitical tensions and the imperative to safeguard supply chain security. Notably, the Bureau of Industry Security and Import/Export Control under China’s Ministry of Commerce (BISIEC) issued two announcements, No 61 and No 62, that extended export control requirements for specific rare earth elements and their derivative products to foreign entities and technology transfers.

These measures reflect the extraterritorial jurisdiction established under Article 49 of the People’s Republic of China Export Control Regulations for Dual-Use Items (the “2024 Regulations on Export Control of Dual-Use Items”), and introduce, for the first time, a groundbreaking “50% penetration rule” for entities listed on the Control List (based on the 2020 Export Control Law and the 2024 Dual-Use Items Export Control Regulation) and Watch List (based on the Dual-Use Items Export Control Regulation effective from 1 December 2024).

However, based on the consensus reached through consultations between the US–China trade teams, BISIEC issued Announcement No 70 of 2025 on 7 November 2025, suspending implementation of the approved Announcements Nos 55, 56, 57, 58, 61 and 62, effective immediately until 10 November 2026.

As these announcements have not been completely abolished, especially the announcements Nos 61 and 62, we continue to recommend that relevant enterprises implement export control management for supply chain items in accordance with the requirements of these announcements and other applicable Chinese export control regulations. It is for this reason that we have prepared this article.

Announcement No 61: Extraterritorial Jurisdiction and the 50% Penetration Rule for Rare Earth Export Controls

Assessing the need to apply for a dual-use item export licence: two “overseas” scenarios

The core requirement of Announcement No 61 of 2025 is that foreign organisations and individuals must obtain a dual-use item export licence from China’s Ministry of Commerce before exporting specific rare earth items to countries or regions other than China. This marks a significant expansion of China’s export control regime from traditional territorial jurisdiction to extraterritorial jurisdiction.

Article 49 of the 2024 Regulations on Export Control of Dual-Use Items has established a limited scope of extraterritorial jurisdiction, stipulating that when foreign organisations or individuals transfer “Chinese dual-use items” outside China to specific destination countries, regions or designated organisations or individuals, the competent commerce authority of the State Council may require the relevant exporters to comply with the provisions of the Regulations. “Chinese dual-use items” include: dual-use items manufactured outside China that contain, integrate, or are mixed with specific dual-use items originating from China; dual-use items manufactured outside China using specific technologies originating from China; and specific dual-use items originating from China.

Further, announcement No 61 operationalises this principle, extending the scope of control to the global supply chain to prevent the circumvention of controls through overseas trans-shipment of Chinese rare earth items. The following shows the core licence requirements and Compliance Key Points of Article 1 of Announcement No 61.

Foreign organisations and individuals must obtain a dual-use item export licence from China’s Ministry of Commerce before exporting the following items to countries or regions other than China.

（1）Items listed in Part II of Annex 1 of Announcement No 61, manufactured outside China, that contain, integrate or are mixed with items listed in Part I of Annex 1 originating from China, where the value proportion of the items listed in Part I of Annex 1 constitutes 0.1% or more of the value of the items listed in Part II of Annex 1 manufactured overseas.

• Compliance key points – foreign factories producing rare earth derivative products must obtain a dual-use item export licence from China’s Ministry of Commerce prior to selling such products overseas if the following criteria are met:

(a) the raw materials include Chinese-origin items listed in Part I of Annex 1 of Announcement No 61 (“Raw Materials”) (such as samarium metal, dysprosium metal, gadolinium metal, terbium metal, lutetium metal, scandium metal, yttrium metal, samarium-cobalt alloys, terbium-iron alloys, dysprosium-iron alloys, terbium-dysprosium-iron alloys, dysprosium oxide, or terbium oxide); and

(b)the products manufactured by the foreign factory listed in Part II of Annex 1 of Announcement No 61 as follows (“Products”):

(i)rare earth permanent magnet materials – samarium-cobalt permanent magnet materials; neodymium-iron-boron permanent magnet materials containing terbium; neodymium-iron-boron permanent magnet materials containing dysprosium; and parts, components, or assemblies containing the above materials; 

(ii) rare earth targets – samarium-containing targets (samarium targets, samarium-cobalt alloy targets, samarium-iron alloy targets); gadolinium-containing targets (gadolinium targets, gadolinium-iron alloy targets, gadolinium-cobalt alloy targets); terbium-containing targets (terbium targets, terbium-cobalt alloy targets, terbium-dysprosium-iron alloy targets); dysprosium-containing targets (dysprosium targets, terbium-dysprosium-iron alloy targets); lutetium targets; scandium targets; and yttrium-containing targets (yttrium targets, yttrium-aluminum alloy targets, yttrium-zirconium alloy targets); and

(c) the raw materials account for 0.1% or more of the value of the manufactured product.

(2)Items listed in Annex 1 of Announcement No 61, produced outside China using technologies related to rare earth mining, smelting and separation, metal smelting, magnetic material manufacturing, or rare earth secondary resource recovery originating from China.

• Compliance key points – foreign factories producing the items listed in Annex 1 of Announcement No 61 must obtain a dual-use item export licence from China’s Ministry of Commerce prior to selling such products overseas if the following two criteria are met:

(a) specific Chinese-origin production technologies are used by the factory, including technologies related to rare earth mining, smelting and separation, metal smelting, magnetic material manufacturing, or rare earth secondary resource recovery originating from China; and

(b) the products manufactured by the foreign factory are items listed in Annex 1 of Announcement No 61 originating from China.

(3) Items listed in Annex 1 of Announcement No 61 originating from China.

• Compliance key points:

(a) for re-exports after export from China: for items listed in Annex 1 of Announcement No 61 originating from China, foreign organisations and individuals must obtain a dual-use item export licence from China’s Ministry of Commerce before re-exporting these items outside China; and

(b) for exports from China to overseas: domestic exporters exporting Chinese-origin items listed in Part I of Annex 1 of Announcement No 61 shall, during customs declaration, accurately report the final destination country or region as required and issue a Compliance Notice to foreign importers and end-users.

Licence review policy and compliance requirements

If, upon assessment, a foreign factory meets the conditions specified under Article 1 of Announcement No 61 requiring an application for a dual-use item export licence from China’s Ministry of Commerce, the foreign exporter must apply for the licence. The application of such licence shall include relevant materials such as the application form, proof of identity, copies of contracts, technical specifications, and end-user and end-use certifications.

China’s Ministry of Commerce will conduct the review and evaluate the destination countries or regions for the export of dual-use items.

Of particular note, Announcement No 61 explicitly sets out the following licence review standards for specific scenarios.

Licence review standards importers and end-users – generally not approved

(1) Export applications for foreign military users – screen customers and end-users to determine whether they are foreign military users. The definition of “foreign military users” has not yet been clearly specified by China’s Ministry of Commerce, posing challenges for enterprises in conducting due diligence in practice (generally not approved).

(2) Export applications to importers and end-users listed on the Control List or Watch List, including their subsidiaries, branches, or other affiliates in which they hold 50% or more ownership.       

• In the application of the control list and watch list, Announcement No 61 introduces, for the first time, the “50% penetration rule”, whereby subsidiaries, branches, or other affiliates in which a listed entity holds 50% or more ownership are treated as the same controlled entity.

• While the “50% threshold” is not explicitly stipulated in the text of the 2024 Regulations on Export Control of Dual-Use Items, this rule derives from the risk assessment mechanism and is further specified in the Announcement.

• This requires global enterprises to establish compliance systems to identify and report potential penetration risks.

• Failure to comply may result in penalties including confiscation of illegal proceeds and fines ranging from five to ten times the value of the illegal transactions (generally not approved).

Licence review standards for five categories of end uses

(1) Export applications for items used or potentially used for the following end-uses:

• designing, developing, producing, or using weapons of mass destruction and their delivery systems;

• terrorist purposes; and

• military purposes or enhancing military capabilities, where the phrase “potentially used for” indicates that as long as there is a possibility of such use, the criteria for the specified end-use are met (generally not approved).

(2) Research and development, or production of logic chips with a process node of 14 nanometers or below, or memory chips with 256 layers or above – focus for chip companies (generally not approved).

(3) Manufacturing equipment, testing equipment, and materials for the production of semiconductors with the aforementioned process nodes (logic chips of 14 nanometers or below, or memory chips with 256 layers or above) – focus for semiconductor equipment companies (generally not approved).

(4) Research and development of artificial intelligence with potential military applications – focus for AI companies (generally not approved).

(5) Humanitarian relief purposes, including emergency medical services, response to public health crises, and natural disaster relief – humanitarian exception – foreign exporters are not required to apply for a dual-use item export licence but must report to China’s Ministry of Commerce via email no later than ten working days after the export and provide a commitment that the relevant items will not be used for purposes that endanger China’s national security or interests.

Announcement No 62: Extraterritorial Jurisdiction and Compliance Requirements for Rare Earth Technology Exports

The core elements of Announcement No 62 of 2025 are outlined in the following three points.

Item control – focus on export controls for rare earth-related technologies

Announcement No 62 explicitly prohibits the export of two categories of technologies without a licence, as follows.

(1) Export control code: 1E902.a – technologies related to rare earth mining, smelting and separation, metal smelting, magnetic material manufacturing (specifically for samarium-cobalt, neodymium-iron-boron, and cerium magnet production) and rare earth secondary resource recovery, including their carriers (such as technical data, design drawings, process specifications, process parameters, machining programs, and simulation data).

(2) Export control code: 1E902.b – technologies related to the assembly, commissioning, maintenance, repair, and upgrading of production lines for rare earth mining, smelting and separation, metal smelting, magnetic material manufacturing, and rare earth secondary resource recovery.

The definitions and scope of “rare earth”, “smelting and separation”, “metal smelting”, and “rare earth secondary resources” are governed by the relevant provisions of the People’s Republic of China Rare Earth Management Regulations.

Therefore, for enterprises in the rare earth supply chain, classifying technologies under China’s export control codes is of critical importance.

End-use control – applicability even to non-controlled items

Announcement No 62 emphasises that even non-controlled items require a dual-use item export licence if they are used in overseas activities related to rare earth mining, smelting and separation, metal smelting, magnetic material manufacturing, or rare earth secondary resource recovery.

Furthermore, Announcement No 62 clarifies that the determination of such end-uses is limited to cases where the exporter knows or has reason to believe the items are used or substantially contribute to such purposes. This imposes requirements on enterprises for ongoing export control compliance, necessitating due diligence on downstream customers’ end-uses to ensure exported products are not used for purposes subject to Chinese export controls.

Regarding the scope of exporters, Announcement No 62 distinguishes between personal jurisdiction and territorial jurisdiction:

(1) personal jurisdiction applies to Chinese citizens, legal persons and unincorporated organisations; and

(2) territorial jurisdiction applies to all natural persons, legal persons and unincorporated organisations within China’s territory. As such, foreign enterprises’ subsidiaries and branches in China must pay particular attention to compliance with Announcement No 62.

Extraterritorial jurisdiction of Announcement No 62

In alignment with the definition in Article 2 of the 2024 Regulations on Export Control of Dual-Use Items, “export” under Announcement No 62 refers to the following activities involving controlled items (ie, the Export Control Codes: 1E902.a and 1E902.b):

(1) transferring controlled items from within China to overseas;

(2) providing controlled items by Chinese citizens, legal persons, or unincorporated organisations to foreign organisations or individuals within China; and

(3) providing controlled items by Chinese citizens, legal persons, or unincorporated organisations to foreign organisations or individuals outside China.

The methods of “transfer” or “provision” include trade exports, as well as transfers or provisions through intellectual property licensing, investment, exchange, gifting, exhibitions, demonstrations, inspections, testing, aid, teaching, joint research and development, employment or hiring, consultation or any other means.

In light of the above, the extraterritorial jurisdiction under Article 49 of the 2024 Regulations on Export Control of Dual-Use Items applies equally here: even if the transfer occurs outside China, a licence is required if it involves providing controlled technologies (ie, Control Codes: 1E902.a and 1E902.b) to foreign entities. This expands the scope of control to cover all pathways of technology dissemination, preventing unauthorised technology outflows.

Additionally, Article 5 of Announcement No 62 prohibits providing intermediary services for illegal activities, aligning with the reporting obligations of service providers under Article 36 of the 2024 Regulations on Export Control of Dual-Use Items. Article 6 clarifies exemptions for public domain technologies (ie, technologies already in the public domain, technologies used in basic scientific research, or technologies necessary for general patent applications are not subject to this Announcement). However, disclosing controlled technologies in violation of Announcement No 62 will still be penalised under Article 34 of the 2024 Regulations on Export Control of Dual-Use Items.

Strategic Significance of Extraterritorial Jurisdiction in China’s Dual-Use Export Control Regulations

Under the framework of the 2024 Regulations on Export Control of Dual-Use Items, extraterritorial jurisdiction is a cornerstone of Announcements No 61 and No 62 of 2025.

Article 2 of the 2024 Regulations on Export Control of Dual-Use Items defines export controls as encompassing the transfer of dual-use items from within China to overseas and the provision of dual-use items by Chinese citizens or legal entities to foreign entities. Article 49 introduces an innovative approach by extending jurisdiction to the transfer of “Chinese dual-use items” outside China. This departs from traditional territorial principles, establishing limited extraterritorial authority: the competent authority “may require” compliance, which, based on our understanding, is typically limited to specific scenarios, including but not limited to certain destinations or high-risk contexts such as military end-users or entities on control lists, to avoid overreach.

The implementation of Announcements No 61 and No 62 operationalises the extraterritorial jurisdiction principle of the 2024 Regulations on Export Control of Dual-Use Items, targeting the global rare earth supply chain to ensure the extraterritorial reach of Chinese controls. This design strengthens China’s ability to address geopolitical challenges.

Enterprises should note that violations of extraterritorial jurisdiction may trigger provisions under Article 48 of the 2024 Regulations on Export Control of Dual-Use Items concerning transit, trans-shipment, or re-export controls, as well as penalties under Articles 39 to 46, which include fines ranging from five to ten times the value of illegal transactions and potential criminal liability.

The “50% Penetration Rule” for Export Control and Watch Lists: A New Compliance Challenge

Announcement No 61 emphasises that controls over entities listed on the export control list and watch list extend to their affiliates with 50% or greater ownership. Specifically, for export applications involving items covered by Announcement No 61, if the buyer or end-user is an importer or end-user listed on the export control or watch list (including their subsidiaries, branches or other affiliates with 50% or greater ownership), China’s Ministry of Commerce will generally not grant approval.

The enterprises affected by Announcement No 61 include not only traditional rare earth supply chain companies but also those involved in semiconductor research and manufacturing (eg, using rare earth items for the development or production of logic chips with 14-nanometer or smaller nodes, memory chips with 256 layers or more, or manufacturing equipment, testing equipment, and materials for such processes, including chip design and manufacturing companies, semiconductor equipment manufacturers, material suppliers, and testing equipment providers) and AI companies (eg, using rare earth materials for developing artificial intelligence with potential military applications, such as weapon systems or drone navigation).

The profound impact of the “50% penetration rule” under Announcement No 61 lies in supply chain transparency: enterprises in the aforementioned sectors must conduct thorough equity structure reviews to identify hidden affiliations (eg, circumvention through multi-layered ownership structures). It is recommended that enterprises establish internal export control compliance systems, including the use of data tools to track changes in customers’ equity structures, in accordance with the requirements under the relevant PRC export control laws and regulations.

Conclusion and Compliance Insights

Announcements No 61 and No 62 of 2025 serve as critical supplements to the implementation of the 2024 Regulations on Export Control of Dual-Use Items, strengthening export controls over the rare earth sector, with a particular emphasis on extraterritorial jurisdiction and the enforcement of the “50% penetration rule” for entities on the export control and watch lists.

Although the aforementioned announcements are currently suspended, this suspension effectively grants affected enterprises a valuable one-year grace period, allowing them to methodically assess and adjust their supply chains – particularly for upstream and downstream companies involved in rare earth mining, processing, permanent magnet materials, target manufacturing and rare earth technology transfers.

During this year, it is recommended that relevant enterprises fully utilise this window to systematically review and strengthen their China export control compliance frameworks (eg, establishing or upgrading internal export control mechanisms, enhancing end-user and end-use screening processes, refining compliance clauses in contracts, and conducting targeted training for relevant personnel). Only by making thorough preparations in advance can enterprises confidently navigate the potential reactivation of these announcements and avoid business disruptions or penalties.