Export Control of Dual-Use, New EU Import Control System 2, and Isotopic Testing

Welcome to the latest edition of Simply Trade. In this issue, we cover the introduction of new regulations on the export control of dual-use items in China, the upcoming EU Import Control System 2 (ICS2) Release 3 requirements, and the significance of isotopic testing in importer due diligence. Stay informed with our essential updates on the evolving global trade landscape.

New Regulations on Export Control of Dual-Use Items Introduced in China

China has recently introduced the Regulations on the Export Control of Dual-Use Items, set to be enforced starting from December 1, 2024, marking a significant regulatory development in the country's export landscape. These regulations aim to strengthen the oversight and management of dual-use items through a structured framework, encompassing key aspects such as control policies, licensing measures, end-use management, supervision, and legal responsibilities. By aligning with global best practices, the Regulations seek to enhance coordination and compliance within the export control sector in China.

Highlights:

• The Regulations on the Export Control of Dual-Use Items were officially announced by China's State Council and will take effect on December 1, 2024.
• These regulations represent a comprehensive framework aimed at regulating the export of dual-use items in China, following the enactment of the Export Control Law in 2020.
• Key elements include the integration of control measures, expansion of the scope of application, enhanced licensing policies, and the introduction of end-user management mechanisms.
• The Regulations introduce new requirements for exporters, including extraterritorial application, varied licensing types, and lists of parties of concern and controlled parties, emphasizing compliance and oversight in cross-border trade involving dual-use items.

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New EU Import Control System 2 (ICS2) Release 3 Requirements Unveiled

The EU is set to implement the Import Control System 2 (ICS2) Release 3 on June 3, 2024, introducing enhanced data requirements and a focus on pre-arrival safety and security for goods entering the European Union. This new directive mandates importers to provide a six-digit HS code for each commodity line in the commercial invoice, detailed goods descriptions for specific shipment modes, and the Economic Operators Registration and Identification Number (EORI) for the recipient consignee, emphasizing compliance and customs security. Stakeholders are advised to prepare in advance for the upcoming changes to mitigate potential disruptions and ensure adherence to the revised regulations.

Highlights:

• ICS2 Release 3 implementation is scheduled for June 3, 2024, aiming to strengthen customs processes and trade security within the EU.
• Importers must include a six-digit HS code and detailed goods descriptions for shipments via designated modes of transportation in the commercial invoice.
• The recipient consignee's EORI is now a mandatory requirement, reflecting a heightened emphasis on compliance and data-driven customs security processes.
• Proactive preparation by traders and shipping entities is crucial to align with the new data reporting measures and mitigate risks of delays or non-compliance with ICS2 Release 3.

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Importer Due Diligence Should Include Isotopic Testing, CBP Says

The U.S. Customs and Border Protection (CBP) has provided detailed guidance on the significance of isotopic testing in enhancing importer due diligence practices, particularly concerning the verification of product origin for commodities like cotton. Isotopic testing, utilizing atomic structure analysis, offers a scientific approach to scrutinizing supply chains, underlining the source of raw materials within finished goods. CBP emphasizes the critical role of isotopic testing in importer due diligence efforts, stressing its value in identifying risks within suspect supply chains and supporting compliance with forced labor import restrictions.

Highlights:

• CBP's guidance outlines the importance of isotopic testing for importer due diligence, especially in verifying the geographic origin of commodities like cotton.
• Isotopic testing employs light-stable isotopic analysis to identify risks in supply chains and screen high-risk cargo effectively.
• CBP is enhancing its isotopic testing capabilities across key locations like Savannah, Los Angeles, and New York to conduct more tests with expedited results.
• Importers are advised to incorporate isotopic testing into their due diligence programs to bolster supply chain transparency and compliance efforts, particularly in addressing forced labor import restrictions.

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