China’s Ministry of Commerce and the General Administration of Customs have announced stringent Dual-Use Item Exports control regulations targeting Heavy Rare Earth Element (HREE) exports, effective immediately from April 4, 2025. The new Heavy Rare Earth Element Export Control policy specifically regulates seven critical HREE categories: samarium (Sm), gadolinium (Gd), terbium (Tb), dysprosium (Dy), lutetium (Lu), scandium (Sc), and yttrium (Y).

Under the updated Dual-Use Item Exports control framework, all export operators must now apply for licenses through the Ministry of Commerce, adhering to the Regulations of the People’s Republic of China on the Administration of Dual-Use Item Exports. The Ministry will conduct thorough legal reviews to approve or deny applications, ensuring compliance with national security and trade policies.

This HREE export control update underscores China’s strategic approach to managing dual-use items (with both civilian and military applications) in the rare earth sector. By tightening oversight of Heavy Rare Earth Element exports, the regulations aim to safeguard critical resources while aligning with global non-proliferation standards.

Businesses involved in rare earth trade must promptly adapt to these Dual-Use Item Exports control measures to avoid disruptions. The immediate enforcement highlights China’s commitment to strengthening export governance for HREE-related technologies and materials.

This regulatory update reflects China’s strengthened management of critical strategic resources, serving both domestic industrial chain security and addressing technological competition in international economic dynamics. The magnetic materials industry has reported a mixed outlook of “challenges coexisting with opportunities”: while facing pressures from rising costs and export restrictions, the sector is gradually transitioning toward high-value-added domains through technological upgrades, policy incentives, and market adjustments. Moving forward, enterprises must balance compliance, innovation, and globalized operations to navigate the long-term impacts of international economic competition.

Since implementation, the regulations have introduced multiple operational challenges for exporters:

1. Complex Export Procedures and Increased Time Costs
   • Stringent licensing requirements: Enterprises must submit extensive documentation, including technical specifications, end-user certifications, and usage declarations. Applications may follow single-use licenses (1-year validity) or general licenses (3-year validity), with single-use license reviews taking 45 working days, extendable under special circumstances.
2. Uncertainty from Temporary Controls
   • The Ministry may impose temporary controls (each lasting no more than two years) on non-listed items, requiring firms to monitor policy adjustments closely and increasing unpredictability in export planning.
3. Reapplication Mandates for Changes
   • Any modifications to key information (e.g., end-users, purposes, or destinations) necessitate halting exports and reapplying for licenses, creating risks of operational disruptions.

While the regulations enhance national security and technological protection, they pose significant short-term challenges to exporters’ operational efficiency, costs, and market positioning. Long-term adaptation will require enterprises to pursue technological upgrading, improve compliance systems, and diversify international markets. Policymakers must balance security with trade facilitation—for instance, by streamlining licensing processes and enhancing international dialogue (e.g., bilateral export control mechanisms)—to alleviate corporate pressures.

The Risk assessment and Operational recommendations of different types of Neodymium magnets and assemblies to Dual-Use Item Exports control when exported by different delivery methods

It is suggested that your company choose the corresponding magnet products and transportation mode according to the needs, and make emergency plans in advance to prevent possible risks and reserve sufficient time for the company’s business.

This √ symbol indicates that the magnet contains the heavy rare earth element