Trade
Professional legal research in Trade.
UAV Export Control and Prevention of Smuggling Legal Risks
China is the world's largest UAV producer and exporter. This article systematically examines the legal boundaries of UAV exports from six perspectives: regulatory framework, scope of controls, common misconceptions, administrative risks, criminal risks, and compliance guidance. It explains the dual military-item and dual-use-item control systems, supplemented by technology export controls, analyzes seven common compliance misconceptions, and provides practical guidance from item identification and licensing through customs declaration, end-user and end-use review, post-export obligations, and self-checks.
New Rules Reshape China’s Outbound-Investment Landscape: Key Features, Opportunities, and Challenges under the State Council Regulations on Outbound Investment
China’s first administrative regulation dedicated to outbound investment took effect on July 1, 2026. From the perspective of ODI filings, cross-border M&A, overseas parks, and offshore structures, this article analyzes the new rules’ opportunities and compliance challenges.
International Trade Risk Response Under the Hormuz Strait Blockade
Affected by the Iran-Israel conflict, on February 28, 2026, Iran announced the closure of the Hormuz Strait, directly impacting the performance of international trade contracts. Attorneys Jin Zuopeng, Sun Ming, and Cui Shaolong analyze risk points for international trade enterprises from a practical perspective by examining UK law, CISG, Hague Rules, and Incoterms, providing actionable response plans including practical approaches to four high-frequency dispute scenarios and contract clause optimization recommendations.
LiDAR Giant Hesai Technology Loses Lawsuit Against U.S. Government: Judgment Logic Raises Global Corporate Compliance Alarms
Attorneys OU Yingshi and PAN Yetong note that in July 2025, the U.S. District Court for the District of Columbia dismissed Hesai Technology's lawsuit against the U.S. Department of Defense (DoD), supporting the DoD's inclusion of Hesai Technology on the 1260H 'Chinese Military Companies' list and ruling that it did not violate the Administrative Procedure Act (APA). The court held that LiDAR technology possesses dual-use (military and civilian) attributes, and because the company is located in a government-recognized 'military-civil fusion' industrial park, it met the statutory criteria of being a 'military-civil fusion contributor' and a 'contributor to the defense industrial base.' The DoD's determination was supported by substantial evidence, and the procedures did not cause substantive prejudice to Hesai. Hesai Technology strongly opposed the judgment, emphasizing that its products are strictly for civilian use with no military ties, and has appealed to the Federal Court of Appeals. This ruling highlights the DoD's broad discretionary power in military-related determinations. Being added to the list subjects a company to severe consequences, including bans on U.S. defense contracts, OFAC sanction risks, Military End User (MEU) designation, and reputational damage. The article warns that this standard—substituting 'actual military supply facts' with 'potential military use'—could broadly affect multinational tech companies operating in China, advising relevant enterprises to closely monitor compliance developments and actively defend their rights through administrative petitions or judicial litigation.
BIS Entity List Update: Over Half of Newly Added Entities Are Chinese Entities
Attorneys Ou Yingshi and Pan Yetong opine that the U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued a final rule effective September 12, 2025, adding 32 entities (over half of which are entities from Mainland China and their overseas branches) to the Entity List. The newly added entities were determined to threaten U.S. national security and foreign policy interests primarily due to their involvement in military applications, advanced semiconductors and computing, quantum technology, biotechnology research, and the illegal transshipment of items to sanctioned countries such as Russia and Iran. After being added to the list, the relevant enterprises must apply for licenses for exports of items subject to the Export Administration Regulations (EAR), and face a "presumption of denial" or "case-by-case review"; some entities are subject to additional Footnote 3/4 restrictions, extending the scope of controls to foreign-produced items incorporating U.S. technology. This update precisely targets key areas such as semiconductors, biotechnology, aerospace remote sensing, and industrial software, and strengthens efforts to combat circumvention through third-country transshipment. In the short term, it will cause supply chain disruptions for the affected entities and force technological self-reliance and substitution; in the long term, it will raise global compliance costs. Future U.S. technology controls on China are expected to become more precise, and emerging technology fields are likely to become key targets.
New Smuggling Trends and Criminal Risk Prevention After Hainan's Customs Closure
On December 18, 2025, the entire island of Hainan Free Trade Port will officially begin closed customs operation. After the closure, the "first-line liberalization, second-line control" policy will be implemented. The list of zero-tariff items will significantly increase to nearly 6,600. Processed products with 30% value-added will be exempt from tariffs when sold to the mainland. The scope of beneficiaries will be comprehensively expanded, import restrictions will be relaxed, and bonded maintenance will be opened. While improving trade facilitation, the new policies will also give rise to new smuggling risks, mainly including intensified "daigou and arbitrage" of zero-tariff goods, falsely reporting processing value-added ratios to obtain tariff exemptions, misreporting or concealing prohibited/restricted goods, illegally smuggling zero-tariff goods out of the island, and using "three-no" vessels or cruise ships/yachts for smuggling. Individuals should enhance their awareness of prevention and refrain from lending duty-free quotas or participating in "daigou and arbitrage." Enterprises need to establish sound compliance and internal control mechanisms, strictly account for processing value-added data, dynamically track lists of prohibited/restricted items, ensure traceability of goods' trajectories, carefully choose transportation means, and appropriately handle customs audits by utilizing lenient policies such as voluntary disclosure.
U.S. Initiates 'AD/CVD' Investigations on Photovoltaic Products from Laos, Indonesia, and India: How Should Enterprises Respond?
Attorneys OU Yingshi and HUANG Enlin note that on July 16, 2025, the American Alliance for Solar Manufacturing and Trade (AASMT) submitted a petition to the U.S. Department of Commerce (DOC) requesting the initiation of anti-dumping and countervailing duty (AD/CVD) investigations into photovoltaic products originating from Indonesia, Laos, and India. This petition was prompted by Chinese photovoltaic companies transferring production capacity to these three countries to circumvent high U.S. tariffs on Southeast Asian nations. The investigation primarily targets crystalline silicon photovoltaic cells and modules, laminates, and panels with a thickness of ≥20 micrometers, alleging that companies in these three countries engaged in dumping and enjoyed multiple government subsidies such as tax exemptions, and underpriced land and electricity supply. The period of investigation is from July 2024 to June 2025. The U.S. procedures are expected to be initiated in August 2025, with the investigation and determination process expected to last until the second half of 2026. This investigation will have a significant impact on Chinese photovoltaic export enterprises. It is recommended that relevant companies improve their cross-border compliance systems in advance, closely monitor the progress of the investigation, and actively respond to the investigation with the assistance of lawyers to cope with the potential risk of high tariffs.
In-Depth Analysis of the UK's Latest Sanctions Compliance Guidance: How Chinese Enterprises Can Respond to New Cross-Border Compliance Challenges
Attorneys OU Yingshi and PAN Yetong note that on June 27, 2025, the UK Foreign, Commonwealth and Development Office published a sanctions compliance guidance for non-UK businesses, aiming to help third-country enterprises identify and avoid circumventing UK sanctions against Russia. The guidance clarifies typical circumvention scenarios, such as indirect shipments and concealing end-users, and points out that if non-UK enterprises participate in circumvention activities or have specific links to the UK, they will face severe consequences such as asset freezes and loss of international cooperation opportunities. UK sanctions against Russia mainly cover financial sanctions (freezing the assets of designated persons) and trade sanctions (embargoes on goods and restrictions on services). The guidance suggests that Chinese enterprises strengthen pre-transaction due diligence and 'red flag' screening, establish a compliance management system encompassing high-level coordination, contractual constraints, and dynamic monitoring, and continuously follow updates to the UK sanctions list to effectively mitigate compliance risks.
Top 10 Essentials for the Safe 'Overseas Expansion' of Cross-Border E-Commerce
Attorney YE Peng systematically outlines the developmental opportunities and compliance guidelines for Chinese cross-border e-commerce enterprises expanding overseas. The article first distinguishes between cross-border e-commerce and traditional foreign trade, and analyzes the industry's growth prospects. Subsequently, it provides practical advice on choosing mainstream platforms, configuring logistics models, customs declaration, and tax refund processes for overseas warehouses. Meanwhile, it offers a detailed interpretation of the Chinese government's latest supportive policies, as well as the regulatory and tax requirements of key markets such as the US, the EU, and Southeast Asia. Finally, addressing the multiple risks faced by sellers in their operations—including policy, logistics, payment, and intellectual property—the article proposes core strategies such as brand building, localized operations, and tax and data compliance. The aim is to provide comprehensive guidance for enterprises to expand into overseas markets safely and efficiently.
Facing the Recent U.S. Tariff Policies, How Can Chinese Cross-Border E-Commerce Break Through?
Attorney Ye Peng argues that the recent U.S. cancellation of duty-free treatment for low-value parcels from China, the abolition of the T86 customs clearance procedure, and the substantial imposition of 'reciprocal tariffs'—with cumulative rates once reaching as high as 145%—have subjected Chinese cross-border e-commerce enterprises to severe challenges, including soaring costs, compressed profits, declining competitiveness, and forced market exit. In response, enterprises should actively leverage policy benefits such as the national overseas warehouse construction, export tax rebates, and tax incentives under comprehensive pilot zones while accelerating cooperation with domestic platforms like JD.com and Hema to expand domestic sales channels. Strategically, it is recommended to negotiate tariff cost sharing with U.S. firms, implement market-differentiated pricing, shift production to Southeast Asia to optimize supply chains, diversify into European, American, and emerging markets to mitigate single-market risk, while intensifying product innovation and environmentally differentiated R&D, and deeply applying big data and artificial intelligence technologies to optimize marketing and customer service processes—thereby achieving a breakthrough and sustainable growth amidst the complex international trade environment.
A Brief Discussion on the Impact of U.S. Export Controls and Sanctions on Enterprises in China's Low-Altitude Economy Sector
Attorney PAN Yetong notes that in recent years, citing 'national security' and other reasons, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) has continuously strengthened export controls and sanctions on China's low-altitude economy sector (including drones, eVTOLs, and related components and software). Key measures include adding multiple major enterprises to the Entity List with a presumption of denial for license reviews, imposing massive fines on violating companies, and introducing new rules to tighten control over the drone supply chain. These control measures exercise long-arm jurisdiction through the 'De Minimis Rule' and the 'Foreign Direct Product (FDP) Rule,' causing Chinese enterprises to face severe challenges such as the risk of broken core component supply chains, hindered product upgrades, restricted access to specific markets, and significantly increased compliance costs. In response, the article suggests that enterprises strengthen component screening and supply chain management, strictly screen customer backgrounds and end-uses, enhance overall compliance awareness, and dynamically track regulatory changes. Concurrently, leveraging professional legal teams to navigate export control risks is recommended to ensure robust business development.
The Impact of Tencent's Inclusion on the 'Chinese Military Companies' List and the Reference Value of the Xiaomi Case
Attorney CHEN Shaoping notes that in January 2025, the U.S. Department of Defense released the latest 'Chinese Military Companies' list, adding 134 enterprises, including Tencent and CATL, nearly doubling the size from the previous year. Tencent quickly issued a statement claiming the inclusion was erroneous, announced plans to initiate administrative reconsideration and litigation procedures, and emphasized that the designation would not substantially impact its core business. Despite this, Tencent's stock price still plummeted by about 10%. This list, spearheaded by the U.S. DoD, ostensibly aims to identify and counter China's Military-Civil Fusion strategy supporting the PLA's modernization. In reality, it serves as a tool to stifle the technological advancement of Chinese enterprises in critical fields such as artificial intelligence, aerospace, and advanced materials. Drawing on the precedent set by Xiaomi's listing in 2021, this article systematically analyzes the purpose, listing criteria, and practical impacts of the list, and explores the feasibility of Chinese enterprises appealing for removal through legal channels.
Overview of Laos Investment Law and Risk Prevention (I)
With its advantageous geographical location and role as a node in the "Belt and Road" initiative, Laos has become an important destination for Chinese enterprises investing in Southeast Asia, focusing on energy, mining, agriculture, and infrastructure. This article systematically reviews the core legal and practical framework for foreign investment in Laos: foreign investors may establish enterprises through joint ventures or wholly-owned forms, with 100% shareholding generally permitted except in specifically restricted industries; Special Economic Zones offer multiple policy incentives including corporate income tax reductions, long-term land leases (up to 99 years), customs duty exemptions, and one-stop administrative services; concession activities mainly target large-scale infrastructure and resource development projects, requiring feasibility assessments, agreement signing, and other statutory procedures; intellectual property is comprehensively protected under the 2023 revised Intellectual Property Law, covering trademarks, patents, industrial designs, and electronic works; labor and employment strictly follow the Labor Law, with clear provisions on working hours, mandatory social insurance, and foreign worker quotas, requiring enterprises to focus on compliance; land is state-owned, and foreign investors primarily obtain usage rights through leases (typically 30-50 years) or concessions, with strategic projects eligible to apply for rent reductions according to law. Overall, Laos's legal system is open to foreign investment with comprehensive supporting incentives, providing Chinese investors with clear policy direction and broad market opportunities.
Risk Analysis and Legal Changes from the Perspective of International Trade
Attorney ZHANG Huimin systematically reviews the transaction models, commercial and regulatory participants, typical import/export processes and corresponding legal risks of international trade, and comprehensively analyzes the multi-layered legal sources consisting of international trade practices, international conventions, standard contracts, and domestic laws of various countries. It focuses on the latest developments in China's international trade legal system, including the complete abolition of foreign trade operation registration to deepen institutional opening up, aligning data compliance and rules with digital trade trends, constructing countermeasure legal frameworks such as export controls and anti-foreign sanctions, and unifying foreign-related adjudication standards through publishing typical cases. The article aims to provide international trade participants with practical references for risk identification, compliance management, and legal response.
Analysis of Enforcement Difficulties After Default of Sino-Offshore USD Bonds
Attorney CHEN Yiqian and LIN Jinghuan and CHENG Jingda, based on typical 2023 judgments from the Cayman Islands, Hong Kong, and BVI concerning defaults on sino-offshore USD bonds, systematically analyzes whether bond investors (especially indirect investors holding beneficial interests through clearing platforms) have the standing to directly file winding-up petitions against the issuer after default. The Cayman and Hong Kong courts both adopted a negative stance, finding that investors only have economic interests rather than direct contractual rights, do not qualify as statutory "creditors" or "contingent creditors," and cannot derive authorization from platform operating rules alone—strictly requiring adherence to the集中 exercise mechanism stipulated in the issuance documents. In contrast, the BVI court reached a different conclusion, based on a broader definition of "creditor" under local insolvency law and consideration of commercial reality, recognizing investors' direct standing. The article emphasizes that the divergence in judgments across the three jurisdictions reflects different value trade-offs between contractual certainty, judicial intervention, and passive investor protection, advising practitioners to carefully review governing law, specific issuance document terms, and authorization chains during跨境 bond investment due diligence, and to closely monitor subsequent judicial developments.
How Do Transacting Parties Bear Losses After Cross-Brade Trade Remittance Fraud?
In cross-border trade, fraudsters often carry out remittance fraud by hacking email accounts, cloning email addresses, and tampering with payment information. Due to the difficulty of cross-border asset recovery, losses must be allocated among the transacting parties. When determining liability, courts apply strict liability as the primary principle under the Civil Code, supplemented by fault liability. The core of liability allocation lies in examining whether each party has fulfilled its "duty of reasonable care," comprehensively considering whether the payer and its agent have fulfilled the obligation to verify abnormal payment information through multiple channels, whether the payee has properly maintained email security, and whether obvious red flags of fraud were ignored. Ultimately, losses are allocated based on each party's degree of fault.
Analysis of Cross-Border E-commerce Foreign Exchange Compliance: Lessons from Shanghai Bank's 100 Million Yuan Fine
Recently, the Shanghai Branch of the State Administration of Foreign Exchange published an administrative penalty decision against a Shanghai bank, imposing a warning and fines of nearly 100 million yuan for violations in foreign exchange transactions including spot exchange, foreign currency wealth management, and guarantee-backed lending. This article examines compliance issues in cross-border e-commerce foreign exchange transactions.