On 3 July 2023 the Ministry of Commerce and the General Administration of Customs issued Announcement No. 23 of 2023. Relying on the Export Control Law, the Foreign Trade Law and the Customs Law, the announcement imposed export controls on gallium- and germanium-related items with effect from 1 August 2023. Eight gallium items and six germanium items were added to the dual-use export control list, and may not be exported without a licence.
This is not an isolated technical list. It returns two metals widely used in semiconductors, optical communications, infrared devices and new energy to the framework of dual-use items, from the status of ordinary goods. For affected companies, 1 August is not a news moment but the point at which customs declarations, contracts and customer review processes need recalibration.
The controls reach beyond metal
The listed items include gallium metal, gallium oxide, gallium nitride, gallium arsenide, gallium phosphide, germanium ingots, zone-refined germanium, germanium epitaxial substrates, germanium dioxide and germanium tetrachloride. Whether an item is controlled depends not only on its trade name but on technical parameters, form and use. Different processed forms of the same element may fall under different treatment.
A common misjudgment is to treat a low content ratio as evidence of non-control. Dual-use controls generally turn on the technical specification of the item, not its share in the finished product. Companies need technical and customs staff to identify items together, rather than leaving the judgment to a single function acting on experience.
End user and end use are the core of the licence
Exporters must apply to the Ministry of Commerce, submitting end-user and end-use statements, importer information and the transaction contract. The authority focuses on whether the item may be used for military purposes, for weapons of mass destruction or by an unauthorised third party after diversion.
Customer due diligence can no longer stop at a business licence and a stamped contract. Companies need end-user files covering ownership, ultimate controller, operating address and transaction history. For intermediaries, traders and transshipment transactions, written commitments against resale and diversion should be obtained, with verifiable chain evidence retained.
Transshipment and re-export risk
Export controls do not only govern direct exports from China. Goods transshipped through a third country, re-exported abroad, or leaving in the form of technical data, samples or spare parts may all trigger licensing obligations. For groups with overseas subsidiaries or agents, risk often appears after the company believes the export is complete.
An internal compliance programme should cover order screening, customer review, licence applications, shipment verification, escalation of anomalies and training records. The programme need not be elaborate, but it must work on a specific order: who identifies the item, who reviews the customer, who decides to apply, and who gives final clearance before shipment.
Contractual arrangements
In supply contracts, export licences should be expressed as a condition precedent rather than a footnote. Allocating responsibility where a licence is refused, extending delivery dates, handling deposits and defining the boundaries of information disclosure can prevent administrative uncertainty from becoming commercial breach.
Companies should also avoid promising in contracts that a licence “will be obtained” or that the item “is not controlled”. Such promises are neither controllable nor helpful if the authority later raises questions.
For item identification and licence applications, see our export controls service; for cross-border structures and third-country entities, see multi-jurisdiction compliance; for supply contract drafting, see commercial contracts.
This article is based on Announcement No. 23 of 2023 issued by the Ministry of Commerce and the General Administration of Customs. It is for reference only and does not constitute legal advice.