On January 19, 2017, BIS published a regulatory requirement for exporters and reexporters of items controlled under the multilateral regimes to have a Hong Kong license, if one is required, prior to exporting or reexporting under a BIS export license or license exception. For additional information, please review the rule or the Frequently Asked Questions.
Licensing Policy
The Hong Kong Special Administrative Region (HKSAR) and the People's Republic of China (the PRC or Mainland China) are treated as two separate destinations under U.S. law for export control purposes (see Hong Kong’s separate entry on the Commerce Country Chart in Supplement No. 1 to Part 738 of the Export Administration Regulations. The United States-Hong Kong Policy Act of 1992 (Public Law 102-383, 106 Stat. 1448, Oct. 5, 1992) allows the United States to continue to treat Hong Kong separately from Mainland China for matters concerning trade and export control. Hong Kong administers its own import and export systems and, owing to its status as a cooperating country with multilateral export control regimes, receives favorable treatment with regard to U.S. export licensing and regulations.
In most cases, a license issued for an export to Hong Kong is valid only for export to Hong Kong. Certain items subject to the EAR that do not require an individual validated license for export from the United States to Hong Kong require a license for reexport from Hong Kong to China. However, if an item is going to Hong Kong on its way to China, you must determine license requirements based on China as the destination.
Tiananmen Square Sanctions
Following the 1989 military assault on demonstrators by the PRC in Tiananmen Square, the U.S. Government imposed constraints on the export to the PRC of certain items on the Commerce Control List (CCL). Pursuant to Section 902(a)(4) of the Foreign Relations Authorization Act for fiscal year 1990-1991, Public Law 101-246 (February 16, 1990), better known as the U.S. Tiananmen Square Sanctions, BIS reviews applications for the export or reexport to China of items controlled for Crime Control (CC) reasons under a general policy of denial. However, under the "one country, two systems" principle, BIS reviews applications for the export or reexport to Hong Kong Government end-users, or in certain cases to private end-users, on a case-by-case basis.
License Exceptions
A license exception is a general authorization to export or reexport certain items without a license under stated conditions. There are certain limited circumstances in which a license exception may be available for export to Hong Kong, or for reexport from Hong Kong to China, based on a number of factors, including the Export Control Classification Number (ECCN), the end-user and the end-use. You should consult Part 740 of the EAR for details on whether or not a license exception is available for export to Hong Kong or reexport from Hong Kong to China.
Hong Kong Best Practices
Hong Kong has promulgated a set of "Best Practices" and BIS encourages you to ensure that your company, as well as all of the parties in the transaction chain, adheres to best practices. Your Hong Kong consignees may commit a violation of Hong Kong export controls if they fail to follow Hong Kong's best practices. You can view Hong Kong’s Trade and Industry Department's best practices here, and are encouraged to share them with your overseas counterparts.
All companies doing business in Hong Kong are required to register with the Hong Kong Inland Revenue Department. If you would like to know more about an entity in Hong Kong, information about registered companies is available to the public. Basic company information is available for free at their Cyber Search Center and more detailed information is available for a nominal fee.