Hong Kong - Country Commercial Guide
Strategic Trade Controls for Exports to Hong Kong & Macau
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The United States imposes export controls to protect national security interests and promote foreign policy objectives related to dual-use items and less-sensitive military items through the Export Administration Regulations (EAR) (15 CFR Parts 730 – 774). The Bureau of Industry and Security (BIS) is responsible for regulating, implementing, and enforcing export controls for such dual-use items and less sensitive military items. Within BIS, Export Administration (EA) is responsible for processing license applications, counseling exporters, and drafting and publishing changes to the EAR; and Export Enforcement (EE) is responsible for compliance monitoring and enforcement of the EAR. BIS works closely with U.S. embassies, foreign governments, industry, and trade associations to ensure that the export, reexport and transfer (in-country) of items subject to the EAR is accomplished in compliance with the regulations.

Enforcement

BIS officials conduct site visits, known as End-Use Checks (EUCs), globally with end-users, consignees, and/or other parties related to transactions involving items subject to the EAR and shipped under a license or another form of BIS authorization to verify compliance with the EAR and the conditions of the license or authorization.  An EUC is an on-site verification of a non-U.S. party to a transaction to determine whether the party is a reliable recipient of items subject to the EAR. EUCs are conducted as part of BIS’s licensing process, as well as its compliance program, to determine if items were exported in accordance with a valid BIS authorization or otherwise consistent with the EAR. Specifically, an EUC verifies the bona fides of transactions subject to the EAR, including confirming the legitimacy and reliability of the end use and end user; monitoring compliance with license conditions; and ensuring items are exported, reexported or transferred (in-country) in accordance with the EAR.  These checks might be completed prior to the export of items pursuant to a BIS export license in the form of a Pre-License Check (PLC) or following an export during a Post-Shipment Verification (PSV), regardless of whether a BIS license is required.

BIS officials rely on EUCs to safeguard items subject to the EAR from diversion to unauthorized end uses/users and destinations. The verification of a foreign party’s reliability facilitates future trade, including during BIS license reviews. If BIS is unable to verify the reliability of the company or is prevented from accomplishing an EUC, the company may receive, for example, more regulatory scrutiny during license application reviews or be designated on BIS’s Unverified List or Entity List, as applicable.

Guidance and Training

BIS has developed a list of “red flags”, or warning signs, and compiled “Know Your Customer” guidance intended to aid exporters in identifying possible violations of the EAR.  Both resources are publicly available, and their dissemination to industry members is highly encouraged to help promote EAR compliance.

BIS also provides a variety of training sessions for exporters throughout the year.  These sessions range from one to two-day seminars that focus on the basics of exporting to coverage of more advanced, industry specific topics. Interested parties can check a list of upcoming seminars and webinars or reference BIS’s online training site.  BIS’s Export Control Officers (ECOs) located at U.S. embassies and consulates in seven overseas locations also conduct outreach to raise awareness of reexport and transfer (in-country) requirements with foreign business communities. 

Commerce Control List

The EAR regulates transactions involving the export, reexport, or transfer (in-country) of “dual-use” and less sensitive military items (commodities, software, and technology) as well as certain U.S. person activities.  Items subject to BIS’s jurisdiction include items found on the Commerce Control List (supplement no. 1 to part 774 of the EAR) (CCL); items on the CCL are listed under individual entry by Export Control Classification Number (ECCN).  The EAR also regulates items designated as ‘EAR99’ (a broad basket category of items generally consisting of low-technology consumer goods not listed under an ECCN on the CCL but subject to BIS’s jurisdiction).  For advice and regulatory requirements on items under the export control jurisdiction of other U.S. Government agencies, exporters should consult other U.S. Government agencies. For example, the U.S. Department of State’s Directorate of Defense Trade Controls has authority over the defense articles and defense services that are not subject to the EAR.  A list of other agencies involved in export controls can be found on the BIS website and in Supplement No. 3 to Part 730 of the EAR.

The EAR is available on the BIS website and on the e-CFR (Electronic Code of Federal Regulations) and is updated as needed.

Consolidated Screening List

The Consolidated Screening List (CSL), available on the International Trade Administration’s Trade.gov website, is a list of parties for which the United States Government maintains restrictions or prohibitions on certain exports, reexports or transfers of items.  The CSL consolidates eleven export screening lists implemented by the Departments of Commerce, State, and the Treasury into a single data feed as an aid to industry in conducting electronic screening of parties to regulated transactions.  Exporters should determine the export requirements specific to their proposed transaction by classifying their items prior to export and reviewing the EAR’s requirements specific to the item(s) and the proposed end use and end user, as well as consulting the CSL to determine if any parties to the transaction may be subject to specific license requirements.

In December 2020, BIS published a regulatory amendment confirming that exports, reexports, and transfers (in-country) to Hong Kong are treated as transactions destined for China for purposes of U.S. export controls.  Accordingly, items subject to the EAR that require a license for export, reexport, or transfer (in-country) to China also require a license when destined to Hong Kong.  Hong Kong is also subject to statutory restrictions that prohibit the issuance of export licenses for certain types of transactions to China.

In addition to U.S. export controls, Hong Kong maintains its own strategic trade control system, requiring licenses for the import or export of items commonly found on multilateral control lists, including those adopted by the United States.  Hong Kong’s licensing system is administered by the Trade and Industry Department (TID), and applications for licenses in Hong Kong may require evidence that a shipment from the United States has been lawfully made. More information can be found on TID’s website, https://www.stc.tid.gov.hk/eindex.html.

BIS maintains certain recordkeeping requirements for multilaterally-controlled items destined to and from Hong Kong.  Prior to exporting items controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons, exporters are required to obtain a copy of a Hong Kong import license or a written statement from the Hong Kong government that such a license is not required, which may take the form of website guidance from TID.  The same requirements apply for reexport of items subject to the EAR from Hong Kong.  More information on this requirement can be found at: https://www.bis.doc.gov/index.php/policy-guidance/foreign-import-export-license-requirements/hong-kong.

Russia/Belarus Sanctions

In response to the Russian Federation’s (Russia’s) war against Ukraine, the Bureau of Industry and Security (BIS), together with dozens of export control authorities throughout the world, have taken a series of actions to impose stringent export controls on Russia and those who enable Russia’s war, including Belarus. From the United States, BIS has imposed controls on a number of items subject to the Export Administration Regulations (EAR) that did not previously require export licenses when destined for Russia or Belarus, including all items on the Commerce Control List, more than a 1000 categories of items identified by Harmonized System tariff codes, and several additional categories of items that are described within the EAR. Even transferring these items within Belarus or Russia now requires a U.S. license, and license applications are subject to a strict policy of denial. BIS has also added over 700 entities to the Entity List related to their contribution to Russia’s defense industrial base, including numerous entities outside Russia that are involved in supplying U.S. origin items to the Russian defense sector. This includes a number of Hong Kong entities that have been listed for transshipping sensitive items such as electronic components to Russia’s defense industrial base. U.S. export controls apply broadly to foreign produced items made with U.S. software and technology due to two new Foreign Direct Product (FDP) rules that have been adopted specific to Russia, so companies doing business with Hong Kong should understand the regulations that may apply to the goods they are trading, even when those goods are not U.S. origin. Given Hong Kong’s strong logistics and financial service sector, it remains an attractive global transshipment hub. For that reason, exporters to Hong Kong should be careful to ensure that they know the parties to their transactions and are not exporting into a situation where their goods will be transshipped unlawfully. 

2023 Semiconductor Rules

 On October 17, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) released a package of rules designed to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including the People’s Republic of China (PRC).  These rules reinforce controls imposed on October 7, 2022, to restrict the PRC’s ability to both purchase and manufacture certain high-end chips critical for military advantage. These updates are necessary to maintain the effectiveness of these controls, close loopholes, and ensure they remain durable. These controls were strategically crafted to address, among other concerns, the PRC’s efforts to obtain semiconductor manufacturing equipment essential to producing advanced integrated circuits needed for the next generation of advanced weapon systems, as well as high-end advanced computing semiconductors necessary to enable the development and production of technologies such as artificial intelligence (AI) used in military applications. Advanced AI capabilities—facilitated by supercomputing, built on advanced semiconductors— present U.S. national security concerns because they can be used to improve the speed and accuracy of military decision making, planning, and logistics. They can also be used for cognitive electronic warfare, radar, signals intelligence, and jamming. These capabilities can also create concerns when they are used to support facial recognition surveillance systems for human rights violations and abuses.

Addition for Hong Kong

In December 2020, BIS published a regulatory amendment confirming that exports, reexports, and transfers (in-country) to Hong Kong are treated as transactions destined for the People’s Republic of China (China) for purposes of the U.S. export control system.  Accordingly, items subject to the Export Administration Regulations (EAR) that require a license for export or reexport to China also require a license when destined to Hong Kong.  Hong Kong is now also subject to statutory restrictions that prohibit the issuance of export licenses for certain types of transactions to China.

In 1990, the U.S. Congress passed P.L. 101-246, Title IX, which is commonly referred to as the “Tiananmen Square Sanctions.”  Among other things, this law restricts the U.S. licensing of exports and reexports of crime control and crime detection equipment and instruments listed in the EAR to China, as well as the licensing of defense articles and defense services subject to the International Traffic in Arms Regulations (ITAR).  These restrictions apply regardless of the end user in China. Pursuant to § 742.6(b)(1)(i) of the EAR, exports of certain 9x515 and “600 series” items are also reviewed in accordance with ITAR policy in 22 CFR 126.1

In addition to U.S. export controls, Hong Kong maintains its own strategic trade control system, requiring licenses for the import or export of items commonly found on internationally-supported strategic trade control lists, including those adopted by the United States.  Hong Kong’s licensing system is administered by the Trade and Industry Department (TID), and applications for licenses in Hong Kong may require evidence that a shipment from the United States has been lawfully made. More information can be found on TID’s website.

BIS maintains certain recordkeeping requirements for multilaterally-controlled items destined to and from Hong Kong.  Prior to exporting items controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons, exporters are required to obtain a copy of a Hong Kong import license or a written statement from the Hong Kong government that such a license is not required, which may take the form of website guidance from TID.  The same requirements apply for reexport of U.S.-origin items from Hong Kong.  More information on this requirement can be found here.

BIS Counseling Desks:

  • (202) 482-4811 - Outreach and Educational Services Division (located in Washington, DC – open Monday-Friday, 8:30 am-5:00 pm ET);
  • (949) 660-0144 - Western Regional Office (located in Irvine, CA – open Monday-Friday, 8:00 am-5:00 pm PT);
  • 408) 998-8806 - Northern California branch (located in San Jose, CA – open Monday-Friday, 8:00 am-5:00 pm PT); or
  • E-mail your inquiry to the Export Counseling Division of the Office of Exporter Services at ECDOEXS@bis.doc.gov.

BIS Export Control Office Hong Kong

Tel:  (+852) 2521 1467

ECO.HongKong@trade.gov