Export controls alert: recent measures from UK, EU, China and the United States

This alert covers four recent developments that illustrate this shift: the UK's new Sanctions End-Use Controls, which came into force on 13 May 2026; the European Commission's updated overview of diverging national measures under the EU's dual-use regulation; China's decision to ban dual-use exports to seven European entities with effect from 24 April 2026; and new guidance from the US Bureau of Industry and Security (BIS), effective 31 May 2026, confirming that export licences are required for advanced AI chips shipped to entities whose ultimate parent is headquartered in China or another restricted jurisdiction. Each development is significant in its own right. Together, they point to a direction of travel that businesses with cross-border operations cannot afford to ignore.

UK Sanctions End-Use Controls, effective 13 May 2026

On 13 May 2026 the UK Sanctions End-Use Controls (SEUCs) took effect. The export control measure was brought into force by the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 and addresses a longstanding gap in the UK’s export controls architecture. Previously the government could alert an exporter to the risk of diversion from a non‑sanctioned third country to a sanctioned destination, but the exporter retained the discretion to proceed. That discretion has now been removed.

The SEUCs are intended as a tool to tackle circumvention of trade sanctions at source, and apply to goods and related technologies that are not already captured by the UK's Strategic Export Control Lists (known as the consolidated list). The SEUCs apply where the authorities have informed the exporter that there is a risk of ultimate diversion of the goods or related technology. This is done by issuing an «informing notice» directly to the exporter. From that point, the exporter must apply for an export licence prior to export. Not doing so is a criminal offence. The Office of Trade Sanctions Implementation (OTSI) is not currently accepting pre-emptive licence applications. Exporters must therefore wait to be informed before applying.

The controls operate across several UK trade sanctions regimes that extend beyond arms embargoes: Belarus, Iran, Libya, Myanmar, North Korea, Russia (and non-government-controlled territories of Ukraine), Somalia, Syria, Venezuela and Zimbabwe. The government's own guidance on countering Russian sanctions evasion, makes clear that the highest immediate risk concerns circumvention of UK Russia sanctions. The guidance also provides a non-exhaustive list of thirteen higher-risk third countries where enhanced due diligence should be applied as a baseline: Armenia, China (including Hong Kong and Macau), India, Israel, Kazakhstan, Kyrgyzstan, Malaysia, Serbia, Thailand, Türkiye, UAE, Uzbekistan and Vietnam.

Non-compliance may lead to monetary penalties, goods seizure and detention by His Majesty's Revenue and Customs (HMRC), licence revocation, public naming by OTSI, and criminal prosecution. Monetary penalties may be imposed on a strict liability basis, meaning that a penalty can follow even where the exporter did not know or have reasonable cause to suspect that a breach was occurring. In certain circumstances, OTSI may also impose restrictions on future exports more broadly, not merely on the shipment in question.

Overall, this results in a shift towards a framework with less certainty and increased complexity: affected businesses must make assessments on hypothetical risks and adopt a correspondingly more expansive approach to compliance due diligence.

EU updated overview of national measures under Regulation (EU) 2021/821 

The European Commission has published an updated overview of additional national measures adopted by individual Member States under Regulation (EU) 2021/821, the EU's framework regulation for the control of exports, brokering, technical assistance, transit and transfer of dual-use items. The overview confirms that the EU dual-use regime is not, in practice, uniform. Whilst Regulation (EU) 2021/821 establishes a common baseline, Member States retain significant latitude to impose controls beyond it, and many have done so. The key trends emerging from the overview are as follows:

• More than half of EU Member States have extended the export authorisation requirements to dual-use items not listed in Annex I where an exporter has reasonable grounds to suspect military end-use, including as parts or components.
• Ten Member States have introduced authorisation requirements for non-listed cyber-surveillance items where there are grounds to suspect use in connection with internal repression or serious violations of human rights or international humanitarian law.
• More than half of Member States have extended brokering controls to non-listed items, and sixteen have extended transit controls on the same basis.
• Seven Member States, among those, Sweden, have adopted national legislation requiring authorisation for the provision of technical assistance related to non-listed dual-use items.
• More than half of Member States have introduced additional national controls for reasons of public security, including the prevention of terrorism and the protection of human rights. France has recently extended its national controls to goods and technologies related to quantum computers and their enabling technologies, as well as equipment for the design, development, production, testing and inspection of advanced electronic components.

These national measures must also be read alongside the EU's updated list of controlled dual-use items, revised in September 2025. The update brings a range of advanced technologies under EU-level control for the first time, including quantum computing equipment and software, certain semiconductor manufacturing tools, high-performance computing components, and equipment used in advanced manufacturing and biotechnology. Businesses that have not recently reviewed how their products are classified should treat the updated list as a prompt to do so. 

Taken together, the national measures and the updated Annex I illustrate a broader pattern: different jurisdictions are targeting different goods, technologies and activities, often without coordination, and the cumulative effect is a compliance landscape of considerable complexity. For businesses operating across multiple Member States, assuming that EU-level compliance is sufficient is no longer tenable. The practical response is a robust internal compliance framework, that keeps pace with regulatory changes, and enables the business to identify and address gaps before they give rise to a breach.

China Bans Dual-Use Exports to Seven EU Entities, effective 24 April 2026

China's Ministry of Commerce (MOFCOM) announced on 24 April 2026 that seven European entities had been added to China's export control list pursuant to the Export Control Law and the Regulations on Export Control of Dual-Use Items, effective immediately. The seven entities are Germany's Hensoldt AG, Belgian arms manufacturers FN Herstal and FN Browning, and four Czech companies: Excalibur Army, Omnipol, VZLU Aerospace and SpaceKnow.

The legal effect is threefold: Chinese exporters are prohibited from exporting dual-use items to the seven entities; foreign organisations and individuals are prohibited from transferring or providing Chinese-origin dual-use items to those entities; and all ongoing related activities must be halted immediately. Exports may only proceed in special circumstances, upon application to and approval by MOFCOM.

MOFCOM stated that the measures target entities that have either participated in arms sales to Taiwan or colluded with Taiwanese authorities, and characterised the action as limited in scope and consistent with China's legitimate non-proliferation obligations. The inclusion of SpaceKnow, a satellite intelligence analytics company, alongside established arms manufacturers signals, however, that Beijing's definition of proscribed «Taiwan-related» activity extends well beyond conventional arms transfers. The prominence of Czech entities on the list (four of seven) reflects Prague's deepening engagement with Taiwan across defence procurement, parliamentary diplomacy and research networks.

The practical consequences of the listing extend beyond the seven named entities. European companies that source Chinese-origin dual-use components or materials and supply them, directly or through intermediaries, to any of the seven entities now face potential liability under Chinese law. Given the breadth of Chinese-origin content in many defence-adjacent supply chains, the reach of this measure may be considerably wider than the seven listings suggest. 

The risk of further listings also remains live, as China has demonstrated a clear willingness to use its export controls legislation as a geopolitical instrument, and the list of Taiwan-related activities it considers sanctionable appears to be expanding.

Read more about other recent measures taken by China in our alert China's new supply chain security and countering rules – key takeaways and compliance actions. 

US: BIS Guidance on Chinese-Parented Overseas Entities, effective 31 May 2026

The Bureau of Industry and Security (BIS) issued a guidance notice on 31 May this year, confirming that US export licences are required for advanced AI chips shipped to any entity whose ultimate parent company is headquartered in China, Russia or another Country Group D:5 nation. The guidance resulted from a practice where these companies utilised subsidiaries in Singapore, Malaysia and other non-restricted Asia-Pacific jurisdictions to acquire such chips, and then re-transferred the chips without obtaining export licences back to entities within the parent company's home jurisdiction.

The guidance itself did not establish a new rule, but emphasises the interpretation of the ultimate-parent-company test under the Export Administration Regulations (EAR). Much as the UK's approach illustrates, it requires companies engaged in international trade to make their compliance due diligence a holistic and predictive exercise, not merely a rules-based analysis of a transaction. Companies in any controlled-goods sector that screen only the immediate counterparty at the point of shipment, rather than its ultimate parent, face a structural compliance gap. 

Congress has approved a significant increase to BIS's enforcement budget for FY 2026, and in light of recent enforcement actions such as the $252 million settlement by Applied Materials, the trajectory of US enforcement is entirely consistent with the direction of development under the UK, EU and Chinese regimes – resulting in greater scrutiny, wider reach and higher penalties.

What this means for your business

The four developments described in this alert are different in their legal basis, geographic scope and immediate effect. But they share a common characteristic: each reflects a world in which export controls are no longer shaped primarily by agreed multilateral standards, but by the strategic interests of individual jurisdictions acting unilaterally and often at speed. The UK is closing gaps in its sanctions enforcement architecture. EU Member States are diverging from one another despite a shared regulatory baseline. China is using its export controls legislation to exert geopolitical pressure on European defence and technology companies. The United States is in particular tightening its grip on advanced technology flows to Chinese-linked entities wherever in the world they operate. And all of this is happening simultaneously, without coordination, and against a background of wider geopolitical instability that shows no sign of abating.

For businesses, this means that the compliance challenge is not static. A product that was uncontrolled last year may require a licence today. A supply chain that was low-risk six months ago may now pass through a jurisdiction with heightened diversion risk or a newly listed counterparty. A business relationship that appeared unproblematic may now engage the export controls of a third country on the other side of the world.

In practical terms, export controls compliance can no longer be treated as a periodic exercise or a matter for specialists. It requires ongoing attention across procurement, sales, logistics and legal functions, underpinned by a framework that is regularly reviewed, adequately resourced, and capable of responding quickly when the regulatory ground shifts. Businesses that have not yet taken stock of their exposure under the UK, EU, Chinese and US regimes should treat the developments described in this alert as a prompt to do so now.

Wikborg Rein advises on export controls compliance across the UK, EU, US and third-country regimes and can assist businesses in assessing their exposure, reviewing their classifications and building the frameworks needed to manage it.