On December 3, 2024, China Customs announced a penalty case involving a company's illegal import of dual-use items, which has attracted widespread attention within the industry.

Case summary: XX Company, through a logistics company, declared the import of polishing agent products in 16 shipments from July 2022 to June 2023 under general trade. These products contained triethanolamine. According to the "Catalogue of Dual-Use Items and Technologies Subject to Import and Export License Administration (2024)," mixtures containing triethanolamine are classified under the management of dual-use items. As per the "Measures for the Administration on Import and Export License for Dual-use Items and Technologies," customs accepts declarations and inspections based on the dual-use items and technologies import license. However, the party failed to submit the required license at the time of declaration. This act violated customs regulations and constituted an illegal activity. After the case was discovered, although the party cooperated with customs in investigating the illegal activities and admitted their mistake and accepted the punishment, it had already caused adverse effects. According to Article 14, Paragraph 1 of the "Regulations on the Implementation of Administrative Penalties by Customs of the People's Republic of China" and Entry 2 of Article 12 of the "Standards for Discretionary Administrative Penalties by Customs of the People's Republic of China," a fine of RMB 28,000 was imposed as an administrative penalty.

For more details about the case, see attachment below.

ChemRadar Insights

This case once again reminds all companies that trade compliance is an indispensable part of business operations. In the process of international trade, companies must adhere to the laws and regulations of different countries and international norms. It is advised to conduct a compliance assessment of the trade products before import and export, assessing whether the product is subject to special control and whether an application for the corresponding license is required.

Below is a simplified compliance assessment using this case as an example:

• Given that the polishing agent in the case contains triethanolamine, a company in China needs to confirm whether triethanolamine is subject to control before importing.
• The basis of control for substances in China is according to relevant catalogues, so it is necessary first to assess which domestic control catalogues might list triethanolamine and then verify its inclusion.
• CIRS's self-developed ChemRadar integrates major global chemical catalogues, including China's main control catalogues, enabling one-click searches by CAS number or name.
• Upon searching, it was found that triethanolamine is listed in Inventory of Chemicals Subject to Supervision and Control in China (CWC). After clicking on compliance information, it was discovered that products containing low concentrations of triethanolamine, such as non-medical disinfectants, synthetic detergents, cosmetics, and inks, do not require the dual-use item and technology import and export license.

• The company needs to confirm whether the product belongs to the aforementioned types. If not, it will need to handle the corresponding dual-use item license based on compliance obligations.
• If you would like to learn more about regulations, you can also access our regulatory database. To do so, click on "Resources" at the top right corner of the webpage, then select "LawInfo Database". Enter keywords in the search box to quickly find relevant regulations and management measures.

By following these steps, you can clearly understand the regulatory obligations faced during the import and export of products and then decide whether to comply with regulatory obligations or proactively avoid facing regulatory risks by updating the formula.