The Technology Import and Export Administration Regulation of the Peoples Republic of China
The People’s Republic of China is committed to enhancing the security and sealing the loopholes of overseas technology transfer, which are potential threats and risks to Chinas national security. To this end, the Ministry of Commerce has formulated and formulated the Technology Import and Export Administration Regulations of the Peoples Republic of China (hereinafter referred to as the “Regulations”) which came into effect on April 16, 2018.
The Regulations implemented the provisions of the Exit and Entry Administration Law of the People’s Republic of China in that it seeks to prevent foreign countries from connecting with overseas technology transfers through improper means so as to harm the national security, economic security, and social order of Chinese citizens. Furthermore, it regulates the types of technology available for transfer, the various responsibilities and obligations of the exporter and importer and technology transfer approval, and the necessary penalties.
Article 1 of the Regulation defines the applicable scope, which covers the transfer of technology from Chinese entities to foreign entities, as well as from foreign entities to Chinese entities. In addition, it covers all forms of technology, including but not limited to patents, copyrighted works, trade secrets and know-how.
Article 3 of the Regulations provides for the general principle for the export of technology. Under the Regulations, no technology transfer that affects national security or public interests may be legally authorized by the parties without the approval of an authorized agency. It also sets out a list of technologies and items that are subject to prior approval as well as a list of prohibited technologies and items that may not be approved.
Article 5 of the Regulations outlines various obligations of the exporter. It requires that the exporter submit a complete technology transfer application to the relevant controller when transferring technology overseas. The application should include all relevant information regarding the type of technology being transferred, the purpose of the transfer, the intended recipient of the technology, the method of transferring the technology and the use and protection of the technology.
Article 6 provides for the responsibility of the importer. Specifically, it requires the importer to ensure that the transferred technology is solely used for the purpose approved by an authorized agency, and is not disclosed without such approval. Furthermore, the importer is required to use reasonable measures to protect the transferred technology and prevent it from falling into unauthorized hands.
Article 8 of the Regulations sets out a range of penalties for infringing the provisions of the Regulations, which include punitive damages, administrative penalties, criminal sanctions or other necessary measures.
The Technology Import and Export Administration Regulations of the Peoples Republic of China are stringent laws designed to prevent unwanted or inappropriate technology transfer and ensure the security of Chinas national security, economic security, and social order. The Regulaiton serves as an effective deterrent to those seeking to transfer technology outside of China in an inappropriate manner, and should be carefully observed by all parties engaged in technology transfer activities.
