Sanctions and Export-Control Screening for China-Linked Companies

A list search is one input, not a compliance decision. Before an overseas sale, service, payment, shipment, re-export, in-country transfer or technology release proceeds, the company should create one transaction record and test parties, ownership/control, items, destinations, end users, end uses, routing, payment and applicable authorisations under each relevant legal system.

This workflow does not determine that an item is uncontrolled, a party is clear, an exception applies or a licence will issue. US, EU/Member State and mainland PRC rules must be analysed separately. The site's Export Control and Trade Measures Tracker remains the changing-measures layer, not a screening database or legal decision record.

1. Build the transaction record

Record every contracting, paying, shipping, receiving and beneficially owning party; aliases and identifiers; intermediaries; origin, destination and route; goods, software, technology or service; technical characteristics; end user, end use and installation site; banks and currency; proposed release date; and the employee responsible for the decision. Missing or inconsistent mandatory facts require a hold.

2. Map jurisdiction before screening

Identify separately whether US, EU and selected Member State, or mainland PRC rules attach to the persons, items, technology, services and controlled act. Do not treat US-person, EU-person, origin, content, location, routing, currency or re-export concepts as interchangeable. Conflicting legal demands must be escalated rather than resolved editorially.

3. Classify the item and activity

Classification should identify the controlling authority, legal instrument, technical evidence, classification or control entry, version/date and responsible reviewer. Customs tariff codes do not automatically establish export-control classifications. Software, technology access, technical assistance and services may require their own analysis.

4. Screen parties and ownership/control

Screen all relevant parties against current official sources and resolve aliases, identifiers, false positives and indirect ownership or control under the applicable regime. A clean name search is not approval. OFAC's 50 Percent Rule must not be exported into EU or PRC analysis.

5. Test end use, end user and diversion risk

Review the customer's business and capability, stated use, installation site, route, intermediaries, documents and payment against the applicable end-use, end-user, destination, catch-all and diversion rules. A licence or hold may be required without an exact list match.

6. Hold and escalate

Apply a non-overridable hold for a possible list match, unresolved ownership/control, classification uncertainty, changed facts, licence question, suspicious route or payment, contradictory documentation or prohibited-use concern. Only the assigned scoped reviewer may record the controlling rule, authorisation, exception, licence condition or prohibition. Silence is not approval.

7. Carry the decision into execution

Translate applicable conditions into logistics, payment, invoicing, contracts, technology access and downstream instructions. End-user statements and contractual controls support diligence but do not transfer legal responsibility or cure known red flags. Verify the facts and authorisation immediately before the controlled act.

8. Preserve, re-screen and audit

Retain the transaction inputs, official-source version and timestamp, classification evidence, match resolution, reasoning, approval, licence conditions and execution evidence. Re-screen after material changes to parties, ownership, item, route, end use, law or lists, and at the final release gate.

9. Respond to incidents

For a suspected attempted or completed breach, stop affected activity, preserve evidence, contain access or shipments and escalate to counsel. Reporting, privilege and voluntary-disclosure consequences differ by jurisdiction; this guide does not promise immunity or mitigation.

10. Maintain the programme

Assign management ownership, risk assessment, written controls, training, testing, audit and corrective action. BIS, OFAC and EU programme guidance informs the structure but is not a universal safe harbour. Monitor official US, EU and PRC sources weekly, conduct formal legal review monthly and recheck all controlling sources at publication and transaction time.

Questions requiring transaction-specific legal advice

For a live transaction, counsel must still resolve the source-pack questions, including the precise EU Member State, applicable ownership/control rules, authorisation gates, incident routes and the PRC countermeasure, technology-export, state-secret and data interfaces. Publication of this framework is not approval of any transaction.

Selected official sources

• US Export Administration Regulations
• OFAC sanctions programs
• EU Dual-Use Regulation 2021/821
• PRC Regulations on Export Control of Dual-Use Items

General information only, not legal advice. Laws, lists, guidance and transaction facts can change. Obtain advice for the relevant jurisdictions and current facts.