Background

In January 2026, China introduced new export license requirements for certain export products. Under the new regulation, exporters are required to complete the relevant export license application process before shipment.

During the initial implementation stage, many companies experienced longer approval periods due to the significant increase in application volume and the adjustment of review procedures.

Although the standard approval process was expected to take approximately 3 working days, the actual processing time could extend to 6 working days or longer. In some cases, repeated document revisions, additional verification requirements, and information clarification resulted in the overall process taking several weeks or even close to one month.

Case Study: Export License Application Returned Due to Different Understanding of Trade Terms

During the early stage of the new export license implementation, some applications were returned because of differences in understanding of international trade terms (Incoterms), even though the documents were prepared according to standard international trade practices.

The export license review process requires verification of transaction details, including contract information, product details, buyer information, and destination information. However, different trade terms represent different responsibilities between buyers and sellers, which may not always be reflected in the same way on commercial documents.

For example, in a transaction using the EXW (Ex Works) trade term, both the buyer and seller clearly understood the responsibilities under this arrangement.

According to EXW rules:

• The seller is responsible for preparing the goods at the agreed location;
• The buyer is responsible for transportation arrangements and subsequent logistics.

Therefore, an EXW sales contract normally does not include the buyer’s final delivery address or detailed destination information.

During the export license review process, the application form indicated the customer’s destination country, while the EXW sales contract did not contain the same destination details. Based on a document-by-document comparison, the application was considered inconsistent and was returned for further clarification.

After explaining the EXW trade term and providing additional supporting documents, the application was able to proceed with the review process.