On February 24, 2026, Ministry of Commerce of China (MOFCOM) designated 20 Japanese entities to the List of Controlled Parties, with another 20 on the Watching List. These designations are based on reasons of national security and interest and non-proliferation of weapons of mass destruction.             

I. 20 Designations on List of Controlled Parties 

These 20 Japanese companies were designated due to their "involvement in enhancing the military capabilities of Japan" as per MOFCOM Announcement No. 11, 2026, with the following specified consequences: 

 •  Export embargo: Export operators are prohibited from exporting dual-use items to the designated entities.

  •  Re-export and transfer Embargo: Overseas organizations and individuals are prohibited from transferring or providing any dual-use items originating in China to the designated entities.   

II. 20 Designations on the Watching List 

Another 20 Japanese entities are designated on the Watching List due to the fact MOFCOM is unable to verify end-users and the end-uses with these entities, as per MOFCOM Announcement No. 12, 2026 with the following strict control consequences: 

 •  Risk assessment of designated entities by the export operator is the must before application for export to such entities.

  •  Written covenant not to be used in promoting military capabilities of Japan is required.   

Ⅲ. Commentary 

1.  Prior military end-use and user embargo. Prior to the forgoing designations, MOFCOM already launched general embargo for miliary end-use and end-user embargo against Japan on January 6, 2026, as per MOFCOM Announcement No. 1, 2026. According to this embargo, (a) export of all dual-use items from China are prohibited to Japanese military end-user or end-use or any other end-user who may contribute to enhancing military capabilities of Japan; (b) Re-export, transfer or provisions to the above end-user or end-use will be held liable.

2.  The specific designations this time further block the specified entities from receiving dual use items from China or overseas.

3.  Exporter from China. The exporter from China must not export dual-use items if the end-user and end-use is a military one of Japan and other end-user who may contribute to enhancing military capabilities of Japan. The same export is also forbidden if the end-user is the above designated entities except for authorization by MOFCOM.

4.  Re-exporter or transferor in a foreign country. Re-exporter or transferor shall not re-export or transfer the China-origin dual-use items for the above uses or end-users. Otherwise, the re-exporter or transferor may be designed to different blacklists by MOFCOM, even exposed to administrative or criminal liabilities in severe cases.   

Ⅳ. Compliance considerations 

Given MOFCOM tends to intensify end-use and end-user verification, companies with China-related supply chains must consider the following compliance measures: 

 •  Identify dual-use items from China or of China origin.

  •  Screen business counterparties to see if they are blacklisted by China or relevant to Japanese military end-use or end-use.

  •  Not to proceed with any transaction which has a red flag of China-related export control risks.    

Source: Global Law Office

Author: Deming Zhao, zhaodeming@glo.com.cn,  specialized in corporate and regulatory compliance, customs and trade compliance, Insurance, M&A, IP licensing and assignment, shipping and logistics, insurance, employment and litigation & arbitration. Dr. Zhao is one of the pioneers who has developed the legal practice of customs & trade compliance in China, which has won wide recognition among multinational clients. 

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