Nine questions about China's rare earth export controls

On 1 October 2024, China began implementing the ‘Rare Earth Management Regulations,’ bringing the entire rare earth industry chain under strict regulation and establishing a closed-loop management system from mining to import and export. On 4 April 2025, the Ministry of Commerce and the General Administration of Customs jointly issued Announcement No. 18 of 2025, officially implementing export control measures on certain medium and heavy rare earth elements. The regulations target seven medium and heavy rare earth metal elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—requiring operators to obtain prior approval from the Ministry of Commerce for the export of controlled items.

On 9 May 2025, the Office of the China Export Control Coordination Mechanism, in collaboration with the Ministry of Commerce, the Ministry of State Security, the General Administration of Customs, and other departments, held a special meeting in Shenzhen to discuss measures to combat strategic smuggling and exports. The meeting emphasised that all departments should focus on strategic mineral sectors such as gallium, germanium, antimony, tungsten, and medium-heavy rare earths, strengthen source control, and severely crack down on evasion tactics such as misreporting, underreporting, and transshipment via ‘third countries’ to ensure the achievement of national export control objectives.

This suggests that exports of medium-heavy rare earths subject to export controls may face stricter scrutiny moving forward. Enterprises must strengthen their identification of controlled items during the declaration process, accurately report relevant elements, and clearly determine whether the items fall under export control regulations. Failure to do so may result in investigations for violating export control regulations, potential legal penalties, and even significant operational challenges for the enterprise. This article combines the team's case handling experience with resources from the Customs Law Library on the Customs Lawyer Network and the Ministry of Commerce's website FAQs to summarise and address key issues in the export process of medium and heavy rare earth controlled items, such as the identification of controlled items and enforcement issues related to export controls, with the aim of assisting companies in achieving compliant exports.

Ⅰ.Are there specific requirements for the rare earth content in related alloys and target materials?

For alloys, target materials, and other items listed in the announcement, the scope of control includes both alloys and target materials containing only the listed elements and those containing both the listed and unlisted elements. The following products serve as examples:

A ‘magnesium alloy’ with the specification ‘12% gadolinium, 70% magnesium, 6% nickel, 4% neodymium, 3% zinc, and the remainder composed of aluminium, manganese, and iron’ falls under the controlled item ‘gadolinium-magnesium alloy’;

An ‘aluminium alloy powder’ with specifications of ‘70%-90% aluminium, 1% magnesium, and 1% scandium’ falls under the scope of the controlled item ‘scandium-aluminium alloy’;

The specification of ‘nickel 55%, samarium 37%, lanthanum 4%, magnesium 0.22%’ for ‘nickel alloy powder’ falls under the controlled item ‘samarium-nickel alloy’;

‘Aluminium alloy sputtering target material’ with specifications of ‘98% aluminium, 2% scandium’ and ‘aluminium nitride scandium target material’ with specifications of ‘60% aluminium nitride, 40% scandium nitride’ both fall under the controlled item ‘scandium target.’

Ⅱ.How should the concept of ‘mixture’ be understood?

A ‘mixture’ refers to a simple physical mixture of controlled items, without a fixed chemical formula, composition, or properties. The various components do not undergo chemical reactions and retain their original properties. The following products serve as examples:

A ‘slurry (solution)’ with specifications of ‘50% pure water, 30% barium carbonate, 12% yttrium oxide, and 8% other trace oxides’ falls under the controlled item ‘mixture of yttrium oxide’;

A ‘mineral soil desiccant’ with specifications of ‘silicon dioxide 58%, calcium chloride 18%, aluminium oxide 8%, dysprosium oxide 0.15%’ falls under the scope of the controlled item ‘mixture of dysprosium oxide’;

The ‘catalyst raw material’ with specifications of ‘90% water, 5% zirconium oxide, and 0.5% yttrium oxide’ falls under the scope of the controlled item ‘mixtures of yttrium oxide.’

 Ⅲ.How is the scope of control for ‘permanent magnet materials’ defined?

Primary processed products formed by further simple processing of samarium-cobalt permanent magnet materials, neodymium-iron-boron permanent magnet materials containing terbium, and neodymium-iron-boron permanent magnet materials containing dysprosium, such as sheets, tiles, rings, and related magnetic components, fall within the scope of control and may involve various names such as magnetic steel, magnetic rings, and magnetic stones; Electronic components (such as motors) or electronic products (such as speakers, headphones, etc.) formed through further deep processing are not subject to control. In addition, rare earth downstream functional materials such as phosphors, catalytic materials (e.g., ‘automotive catalysts’), crystal materials (e.g., ‘yttrium-lithium silicate optical crystals’), ceramic materials (e.g., ‘yttrium-zirconium alloys,’ ‘zirconia ceramic blocks for full magnetic dentures,’ ‘ceramic whitening agents,’ ‘thermal spray powders,’ and yttrium-stabilised zirconium oxide powder") and other rare earth downstream functional materials are not subject to the control of medium and heavy rare earth items. Items containing both yttrium and zirconium elements should be managed in accordance with the relevant dual-use item requirements if their relevant indicators meet the criteria for controlled items under the Dual-Use Item Export Control List 1C234 or other relevant categories. ‘Gadolinium butanol hydrate’ and ‘gadolinium tartrate glucamine’ are not subject to the export control measures for medium and heavy rare earth items.

Ⅳ.Can the customs commodity code be used as a basis for determining whether an item falls under dual-use items?

The Dual-Use Items Export Control List is the fundamental basis for determining the scope of dual-use items and serves as the basis for the dual-use items export control management department (the Ministry of Commerce) to implement licensing. It does not depend on whether the controlled items are assigned a customs commodity code, meaning that the customs commodity code is not a basis for determining whether an item falls under dual-use items. In December 2024, the Ministry of Commerce, in collaboration with the General Administration of Customs and other departments, issued the unified ‘Export Control List of Dual-Use Items of the People's Republic of China’ (hereinafter referred to as the ‘List’), assigning each controlled item an independent control code, such as 9A012.a.1, 9A012.a.2, etc. The control code serves as the basis for the Ministry of Commerce to classify and approve items.

The ‘Catalogue for the Administration of Import and Export Licences for Dual-Use Items and Technologies’ (hereinafter referred to as the ‘Catalogue’) was formulated in accordance with relevant laws, regulations, rules, and the ‘List,’ primarily to assign customs commodity codes to controlled items, thereby facilitating export operators in conducting export business and streamlining management for departments such as commerce and customs. In cases where there are inconsistencies between the “Catalogue” and the ‘List,’ the provisions of laws, regulations, rules, and the ‘List’ shall prevail. All items and technologies listed in the ‘Directory,’ regardless of whether they have been assigned a customs commodity code, must be subject to the legal procedures for obtaining a dual-use items and technology import/export licence. Currently, customs authorities have not assigned customs commodity codes to all goods listed in the ‘Directory.’ For example, milling machines with control code 2B201.b and grinding machines with control code 2B201.c do not have assigned customs commodity codes, but both must apply for dual-use item export licences in accordance with the law; items with control codes 9A012.a.1 and 9A012.a.2 are two categories of controlled unmanned aerial vehicles (UAVs) that meet different technical standards, but their corresponding customs commodity codes are identical.

Ⅴ.Are all products containing medium-heavy rare earth-related controlled items subject to export controls?

The rare earth industry chain is divided into upstream mining and smelting, midstream material preparation, and downstream application and recycling. The upstream segment corresponds to rare earth raw materials; the midstream segment involves the preparation of functional materials, such as permanent magnet materials, catalytic materials, and luminescent materials; the downstream segment involves the application of functional materials in end-products, such as new energy vehicles, electronic information products, and wind power equipment. Currently, the Announcement No. 18 of 2025 by the Ministry of Commerce and the General Administration of Customs (Announcement on the Decision to Implement Export Controls on Certain Medium-Heavy Rare Earth-Related Items) primarily targets restrictions on the export of medium-heavy rare earth elements such as samarium and gadolinium at the raw material level, as well as restrictions on the export of alloys, certain specific-component target materials, and permanent magnet materials. However, if the controlled items are incorporated into other items through normal and reasonable production processes to form end-use products, and are part of the goods intended for export, the goods may not necessarily fall under the export control scope. For example, the recently controversial Lenovo rare earth laptop computers.

Ⅵ. How should export operators determine whether the medium and heavy rare earth items intended for export are subject to export controls as dual-use items?

In practice, many export companies are unaware of the regulatory status of the goods they export and are unable to correctly determine whether an export licence is required, resulting in penalties from customs authorities. To ensure compliant exports, companies should, prior to export, determine whether the goods to be exported fall under dual-use items in accordance with the provisions of Announcement No. 18 of 2025 issued by the Ministry of Commerce and the General Administration of Customs. If they are unable to determine this, pursuant to Article 12 of the ‘Law of the People's Republic of China on Export Control’ (hereinafter referred to as the ‘Export Control Law’), they may seek consultation from the national export control administration department, which shall respond promptly. To apply for export business consultation with the Ministry of Commerce, they should explain the technical specifications, primary, and reasons for inability to determine the status of the proposed export items, and await the Ministry of Commerce's assessment and response.

Ⅶ. After an exporter submits a consultation request regarding an item and receives a response stating that it is ‘not a dual-use item,’ can the item be exported directly?

According to Article 14 of the ‘Regulations of the People's Republic of China on the Export Control of Dual-Use Items’ (hereinafter referred to as the ‘Export Control Regulations’), prior to export, if an export operator, after fully understanding the performance indicators and primary uses of the proposed export items and comparing them with the ‘list,’ is still unable to determine whether the items are dual-use items, they may submit a consultation request to the Ministry of Commerce. The Ministry of Commerce will assist in determining whether the relevant items are dual-use items based on the written materials submitted by the exporter and provide a response. Such responses are made solely based on the written materials provided by the exporter and do not constitute a determination that the actual items to be exported are ‘not subject to export licensing requirements.’ Exporters must assess whether an export license is required based on the actual circumstances of the export at the time of actual export.

Therefore, even after receiving a response from the Ministry of Commerce stating that the consulted item does not fall under the dual-use item export control list or temporary control list, export operators must still fulfil their identification obligations prior to the actual export of goods and ensure the authenticity, validity, and completeness of the customs declaration. For dual-use items that require an export licence, intentionally using the response letter to replace the export licence for customs clearance constitutes unauthorised export, and will be subject to severe penalties in accordance with laws and regulations.

Ⅷ. Is it lawful for customs to seize a shipment of medium-to-heavy rare earth items merely on suspicion that they are controlled items?

Yes, it is lawful. According to Article 19 of the Export Control Regulations, when exporting controlled goods, the shipper or customs broker must present the export licence issued by the national export control authority to customs and complete customs clearance procedures in accordance with national regulations.

If the shipper of export goods fails to present the export licence issued by the national export control authority to customs, and customs has evidence indicating that the export goods may fall under the scope of export control, customs shall raise objections to the shipper of the export goods; customs may request the national export control authority to conduct an identification, and shall dispose of the goods in accordance with the identification conclusion made by the national export control authority. During the identification or objection period, customs shall not release the export goods.  

Ⅸ.If the goods are dual-use items and the exporter fails to present the export licence during customs declaration but subsequently obtains the licence, does this still constitute ‘export without authorisation’?

This behaviour constitutes ‘export without authorisation.’ According to Article 19 and Article 21 of the Export Control Regulations, the shipper of export goods or the customs declaration agent must present the export licence issued by the Ministry of Commerce when exporting dual-use items. Additionally, in accordance with Article 24 of the Customs Law of the People's Republic of China and the relevant provisions of Articles 8 and 14 of the Customs Regulations on the Declaration and Management of Import and Export Goods of the People's Republic of China, dual-use items must be accompanied by the relevant export license when declared to customs. Therefore, for the export of specific batches of controlled goods, if the exporter has not obtained the export licence for that batch of goods at the time of customs declaration, or submits an export licence for another batch of goods, such actions constitute ‘export without authorisation’ as defined in Articles 34 and 39 of the Export Control Regulations. Export operators may not ‘retroactively obtain’ export licenses after customs declaration; if an export license application is submitted before customs declaration and the export license for the specific batch of goods is obtained after customs declaration, this does not alter the nature of ‘export without a license.’