Regulatory intelligence for US exporters

US Tightens China-Related Nuclear Export Controls

The Bureau of Industry and Security last week expanded the scope of its nuclear-related export controls on China and Macau, saying the change was necessary to impose tighter license requirements on items that could “contribute to nuclear activities of concern.” The Nuclear Regulatory Commission also suspended a general license that had authorized exports of certain nuclear items for nuclear end uses in China.

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BIS said its new license requirements, effective Aug. 11, are designed to counter “escalating concerns about China’s nuclear activities” and the country’s “continued nuclear expansion and military-civil fusion strategy pose a concern to global and regional stability.” The agency cited a 2022 DOD report that outlined China’s nuclear goals, saying the country has a “decade-long target to modernize, diversify, and expand its nuclear forces as well as a long-term military-civil fusion strategy.”

The change will add new license requirements for shipments to China and Macau for all items controlled for Nuclear Nonproliferation reasons in Column 2 of the Export Administration Regulations’ Commerce Country Chart. Those items are listed under Export Control Classification Numbers 1A290, 1C298, 2A290, 2A291, 2D290, 2E001, 2E002 and 2E290 and include depleted uranium, graphite and deuterium for non-nuclear end use, generators and “other equipment for nuclear plants,” BIS said. The license review policy varies, but some applications may be reviewed under a policy of extended review or denial.

BIS said the changes don’t affect the status of Macau, which will continue to be treated as a separate destination from China under the EAR. But the agency reminded exporters that Hong Kong, as of December 2020, is not considered a separate destination from China and is subject to the same license requirements.

The NRC, in an order released the same day, said exporters are no longer authorized to use a general license to ship special nuclear material, source material or deuterium for nuclear end uses to China. Exporters “now must apply for a specific license in accordance with NRC regulations,” the agency said, adding that the move was “necessary to improve oversight and control of these exports.”

BIS said it has been monitoring China’s use of dual-use nuclear technologies for years, and said its Oct. 7 China chip controls announcement (see 2210070049) included Entity List additions of parties involved with supercomputers “that are believed to be used in nuclear explosive activities.” BIS also noted its October restrictions said China is looking to “continue the most rapid expansion and platform diversification of its nuclear arsenal in its history, intending to at least double the size of its nuclear stockpile during the next decade” and its nuclear missile systems “designed to manage regional escalation and ensure an intercontinental second-strike capability.”

For these reasons and “in light of China’s objectives to build an integrated national strategic system by developing and acquiring advanced dual-use items for military purposes,” BIS said it “has determined it is necessary to enhance nuclear nonproliferation export controls.”

All exports that now require a license as a result of the BIS changes that were aboard a carrier to a port as of Aug. 11 may proceed to their destinations under the previous eligibility as long as the items have been exported no later than Sept. 11, BIS said.