You use Chinese magnets or rare earths and are told to comply with China

The case, in five lines

What is brought

Review and negotiation of the end-user certificate and of the undertakings not to change the use or transfer without permission that the supplier requests (art. 24 of Decree 792); export control, force majeure and change-of-circumstances clauses in your purchases and in your sales; defence in an end-use verification by MOFCOM (China's Ministry of Commerce) or against inclusion on its lists (arts. 26 to 30); and, if the supplier fails to perform, a claim under the Vienna Convention (CISG) (arts. 71, 79 and 80).

Before which court

No Spanish authority decides on Chinese controls. MOFCOM (China's Ministry of Commerce) decides on the licence the Chinese exporter applies for, on end-use verifications and on additions to and removals from its lists; Chinese customs decide the questioning procedure under Announcement 52/2026. The Certificado Internacional de Importación (International Import Certificate) is issued by the Secretaría de Estado de Comercio (Spain's Secretary of State for Trade). A dispute with the supplier or with your customer goes to the contractual forum: the arbitral tribunal of the agreed institution (CIETAC, the China International Economic and Trade Arbitration Commission, or another) or the sección civil del Tribunal de Instancia (the civil section of the court of first instance), after the negotiation attempt required by Organic Law 1/2025. Whatever is won is enforced in China before the competent Intermediate People's Court: an award made outside China under the New York Convention; a Spanish judgment under the 1992 Spain-China Treaty.

Deadline

Several, and none of them is set by you. The suspension of the 0.1% rule and of the other October 2025 announcements expires on 10 November 2026 (Announcement 70/2025); on 28 September 2026 MOFCOM published the extension to 10 January 2027 of the arrangement with the US on which it depends, but with no announcement formalising it. The suspension of the refusal of gallium, germanium and antimony exports to the US expires on 27 November 2026 (Announcement 72/2025). MOFCOM decides on the licence within 45 working days of accepting the application, not counting verifications (art. 17 of Decree 792); if Chinese customs open a questioning procedure, the exporter has 7 working days (Announcement 52/2026); an end-use verification is answered within the period MOFCOM sets. The International Import Certificate is valid for six months. The limitation period for a claim against the supplier is four years under Chinese law and five under Spanish law.

Who can bring it

The certificate is signed by the end user: your company if it incorporates the magnet into its product; your customer if you resell it as it is. Only the Chinese exporter applies for the licence (art. 16 of Decree 792): you file nothing with MOFCOM unless it requires you to in a verification or you apply to be removed from a list (art. 30). Against the supplier, the claim is brought by the company that signed the order, against the seller named in it.

Financial risk

Signing an end use that is not the real one, or reselling without declaring the chain, may put your company on MOFCOM's watch list or control list, which make Chinese supply harder or cut it off, and helping to evade the control exposes you to art. 41 of Decree 792. Guaranteeing your customer a supply or an absence of restrictions that you do not control shifts onto you a risk that is not yours. And nobody can assure you that MOFCOM will grant the licence or on what date the suspension will end.

What China requires today and what is suspended

As at 24 October 2026 the controls that most affect magnet buyers remain in force, with no suspension. Announcement 18/2025 of MOFCOM (China's Ministry of Commerce) has required a licence since 4 April 2025 to export samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, and samarium-cobalt and neodymium-iron-boron magnets containing terbium or dysprosium, in magnet or powder form. Neodymium magnets without terbium or dysprosium are not listed. Gallium and germanium (since 1 August 2023), graphite (since 1 December 2023) and antimony (since 15 September 2024) also need a licence.

What is suspended are the six announcements of 9 October 2025: 55 (superhard materials), 56 (rare earth equipment and auxiliary materials), 57 (holmium, erbium, thulium, europium and ytterbium), 58 (lithium batteries and graphite anodes), 61 (the extraterritorial 0.1% rule) and 62 (rare earth technologies). Announcement 70/2025 suspended them on 7 November 2025 until 10 November 2026, and as at 24 October 2026 no announcement has changed that date. On 28 September 2026 MOFCOM published that China and the US are extending to 10 January 2027 the Kuala Lumpur arrangement, to which the ministry itself tied the suspension, but the announcement carrying the suspension to that date is still missing. You have to plan with both dates. And do not confuse it with a different suspension: Announcement 72/2025 suspends until 27 November 2026 the refusal in principle of gallium, germanium, antimony and superhard materials bound for the US.

What nobody tells you is that October 2026 has brought more control, not less. Announcement 52/2026, of 19 October, regulates questioning at Chinese customs: if customs suspect the product is dual-use and there is no licence, the exporter has 7 working days to provide the contract, invoice, an explanation and technical data translated into Chinese; customs decide within 15 working days or ask MOFCOM to identify the product, and MOFCOM has another 15; those periods do not count the time taken to provide documents or carry out tests, do not apply in serious or complex cases and, in the meantime, the goods do not leave. Announcement 50/2026 prohibits, from 18 November 2026, transferring certain Chinese products, such as tunnel boring machines, to ‘sensitive countries’ without a licence, and 48/2026 puts out to consultation, until 15 November, controls on 40 technologies, 23 of them in AI. At the same time, MOFCOM says it has approved general licences for some Chinese rare earth exporters and offers to keep facilitating those for Europe: that is why it matters whether your supplier holds a general licence or applies for an individual one per shipment.

The end-user certificate: what you sign and who must sign it

Only the Chinese exporter applies for the licence, with a copy of the contract, the technical description or test report and the end-user and end-use certificate (art. 16 of Decree 792, China's dual-use export control regulation, in force since 1 December 2024). No authority issues that certificate: the end user does, undertaking not to change the end use or transfer the product to third parties without MOFCOM's permission (art. 24). MOFCOM decides within 45 working days of accepting the application, not counting verifications, consultations or inspections (art. 17). An individual licence lasts up to one year; a general licence, up to three (art. 15).

The key question is who the end user is. If you incorporate the magnet into your motor, it is you. If you resell it as it is, the end user is your customer, and signing as end user yourself and then reselling is exactly what the undertaking prohibits. The certificate has to describe the real use, with the product into which the magnet is integrated, and declare any resale: a vague use (‘industrial manufacturing’) or a hidden chain is what leads to MOFCOM's lists. MOFCOM may also ask for a document issued or certified by a public body in your country (art. 24(1)). In Spain, the closest is the Certificado Internacional de Importación (International Import Certificate) issued by the Secretaría de Estado de Comercio (Spain's Secretary of State for Trade), also for uncontrolled goods, valid for six months and non-transferable (art. 31 of Royal Decree 679/2014), although there is no record that MOFCOM accepts or requests it.

What nobody tells you is that the certificate is also evidence against you in a dispute with the supplier. If it arrived late, stated a vague use or named a customer on MOFCOM's lists, the licence delay is attributable to you to that extent and you cannot rely on it against the supplier (art. 80 of the Vienna Convention). That is why we review it before you sign: that it describes what you do, that the undertakings go no further than art. 24 requires and that they fit your sales model. The firm works with partners with offices in China and with expert engineers in Spain and in China, who inspect the goods and their specifications before shipment, on arrival and, if a claim has to be made, as the basis of the expert evidence. Here they check that the technical description matches the data sheet and the test results for the grade, because the composition decides whether a licence is needed: a neodymium-iron-boron magnet without terbium or dysprosium is not in Announcement 18/2025, but a samarium-cobalt magnet is.

What can happen if you fail to comply: MOFCOM's lists

The fines in Decree 792 for breaching the end-use undertaking (art. 42) are for Chinese importers and end users. For a Spanish company, the real risk is the lists. If it does not cooperate in time with an end-use verification, MOFCOM may put it on the watch list: from then on the exporter cannot sell to it under a general licence or a registration and, for an individual licence, must submit a risk assessment (art. 26). If it breaches the end-user or end-use requirements, or is considered to endanger China's national security, it may go on the control list, with transactions prohibited or restricted (arts. 28 and 29). And anyone who induces or helps others to evade the control is exposed to art. 41: a warning, an order to cease the conduct, confiscation of the proceeds and a fine of three to five times the proceeds if they reach 100,000 yuan, or of 100,000 to 500,000 yuan if there are no proceeds or they are lower.

China's Export Control Law makes organisations outside China liable if they breach its rules and harm its national security (art. 44), and measures already in force reach European operators: it is prohibited to transfer Chinese dual-use items to entities on the control list (in 2026, 21 from the European Union, under Announcements 20/2026 and 30/2026) and, under paragraph 1 of Announcement 46/2024, which is not suspended, to US military users or uses. Since 1 July 2026, Announcement 26/2026 has opened a reporting channel for strategic dual-use minerals: diversion through a third country is reportable, and so is transport, clearance or financing knowingly provided to an infringer.

Removal from the control list is possible, but it requires cooperating with the investigation, stopping the conduct, remedying its effects, giving undertakings and applying to MOFCOM (art. 30). That is why the defence starts earlier: answering each verification in time, with the chain documented (drawings, production orders, customers) and translated into Chinese, and screening your customers against the lists before each sale. Before MOFCOM it is the Chinese exporter that acts or, if MOFCOM addresses it directly, your company; we prepare the response from Spain and coordinate it with our partners in China, who follow it there, in their language and with the supplier.

The 0.1% rule: what changes for you if it returns

Announcement 61/2025, currently suspended, would require operators outside China to obtain a MOFCOM licence to export to third countries products made outside China that contain, integrate or are mixed with Chinese rare earths listed in its annex where these account for 0.1% or more of the product's value, and also products made outside China with Chinese rare earth technology and the Chinese-origin items in its annex themselves, such as a magnet you re-export as it is, if it is listed there. It rests on art. 49 of Decree 792, which allows MOFCOM to apply its regulation to anyone who, outside China, transfers to certain destinations products made abroad with Chinese content or technology. If it returns, the licence would be applied for by you, as a foreign exporter, not by your supplier.

The announcement refuses in principle applications for military users and for entities on the control and watch lists, including subsidiaries in which they hold 50% or more, and examines case by case those intended for making logic chips of 14 nm or less, memory chips of 256 layers or more, their equipment and materials, or for developing AI with potential military use. It also requires anyone transferring those products to give the next recipient a ‘compliance notice’. In other words: if it returns, the motor, robot or wind turbine with Chinese magnets that you sell to another country, inside or outside the Union, could need a Chinese licence, and your customer would receive that notice from you.

What nobody tells you is that the 0.1% is measured by value, not weight: cheap magnets inside an expensive machine may fall below it, and a small component with a lot of magnet in it, above. The exact scope depends on the announcement's annex, which has to be checked against your bill of materials, and it is worth having that ready before the suspension ends: origin and value of each magnet, the country of destination of each sale (including within the Union) and customers. And do not forget the European control: if your final product is in Annex I to Regulation (EU) 2021/821, exporting it outside the Union requires prior authorisation (art. 3), and authorisation may also be required for unlisted items where the authority gives notice of a sensitive use (art. 4). That is covered in "Dual-use export licence or REOCE registration refused in Spain".

Your customer asks for guarantees: how far to commit

When a US customer or a large European manufacturer asks you to guarantee that nothing you sell it is subject to Chinese restrictions, or that supply is secured, it is asking you to take on a risk you do not control: MOFCOM grants the licence to the Chinese exporter, and the date on which the suspension ends does not depend on anyone who signs the contract. You guarantee what you control: that you comply with the controls that apply to you, that you will inform the customer as soon as you learn of a refusal, a delay or the reactivation of an announcement, and that the lack of a licence is treated as a ground for exemption and for revising the delivery date and the price, not as a breach on your part.

The chain has to be mirrored. What you promised your supplier (not to change the use, not to transfer without permission, to cooperate in verifications) has to be passed on to your customer through equivalent clauses, because if it resells to a listed entity or to a US military user, the broken undertaking is yours. And something else nobody tells you: MOFCOM's unreliable entity list (Order 4/2020) reaches a foreign company that, contrary to normal market principles, cuts off normal trade with Chinese companies or discriminates against them, causing them serious harm (art. 2), with measures that go as far as prohibiting it from importing from and exporting to China (art. 10). An origin guarantee is drafted as compliance with the law applicable to each transaction, not as a general ban on Chinese suppliers.

If your customer is a large company, it may ask you for data under the European Critical Raw Materials Act, Regulation (EU) 2024/1252. That law's risk assessment only binds a large company identified by its Member State (more than 500 employees and more than 150 million euros of worldwide turnover, art. 2) that uses strategic raw materials to manufacture batteries, traction motors, robotics equipment, drones, advanced chips and other technologies: it must assess the risks in its supply chain at least every three years (art. 24(1) and (2)) and, if its suppliers do not provide the information, it may do so with publicly available information (art. 24(3)). It does not impose that assessment on an SME importing magnets, which may join the Commission's joint purchasing system if it wishes (art. 25). The product is another matter: anyone placing on the EU market industrial robots, electric motors or other products listed in article 28 that contain permanent magnets will have to label them and, above 0.2 kg of magnets, publish their recycled content (articles 28 and 29). The reform proposed in 2025 has not been adopted (the European Parliament adopted its position on 20 October 2026), and no EU restriction on exports of magnet scrap has been adopted.

The clauses that protect you against the Chinese supplier

Between a company in Spain and one in China the 1980 Vienna Convention (CISG) applies, unless the contract excludes it. A supplier that fails to deliver because of the licence is exempt only if it proves an impediment beyond its control, which it could not be expected to have taken into account when contracting and could not avoid or overcome, and it must notify you within a reasonable time (art. 79(1) and (4)); even if exempt, it is relieved only of damages, and you may avoid the contract and recover the advance (art. 79(5)). Under Spanish law without the Convention, art. 1105 of the Civil Code exempts from what was unforeseeable or, if foreseen, unavoidable, unless the obligation provides otherwise. In both cases what was agreed governs, and that is why it is agreed. The claim once the supplier has already failed to deliver is covered in "Your Chinese supplier fails to deliver, saying it cannot get the export licence".

The decisive clauses: the licence as a condition of delivery, with a long-stop date allowing avoidance without penalty and repayment of the advance within a fixed period; the supplier's duty to tell you in writing whether the grade is covered by Announcement 18/2025, to apply for the licence within a few days of receiving your certificate and to send you the acceptance, every request and the decision; an export control clause obliging both parties to comply and to cooperate in verifications; a force majeure clause naming export controls and the possible reactivation of the suspended announcements when the suspension ends (currently 10 November 2026 under Announcement 70/2025, or any later date MOFCOM sets); a change-of-circumstances clause requiring price and dates to be renegotiated if the licence makes performance more expensive or slower without preventing it, with avoidance if there is no agreement; the right to inspect and test at origin before shipment, which our partners in China carry out; and the governing law and forum.

In the meantime, the outstanding payment is your best leverage: art. 71 of the Convention allows a party to suspend its performance if it becomes apparent that the supplier will not perform a substantial part of its obligations as a result of a serious deficiency in its ability to perform or in its creditworthiness, or of its conduct, provided notice is given immediately. If a claim has to be brought, the limitation period is set by the law of the contract: four years under Chinese law (art. 594 of its Civil Code), which is the law a Spanish judge applies if no other was chosen, and five under Spanish law (art. 1964(2) of the Civil Code). Before suing in Spain, the negotiation required by Organic Law 1/2025 must be attempted, also against a Chinese company; not for arbitration. And winning is not collecting: an award made outside China is enforced there under the New York Convention and a Spanish judgment under the 1992 Spain-China Treaty. Where it is best to litigate is explained in "You want to sue your Chinese supplier: arbitration or the courts?".

How we run the case, step by step

1. 1

   Establish what you buy and what it contains

   With the order, the data sheet and, if needed, a test at origin by our partners in China, reviewed by our expert engineers in Spain and in China, we establish whether the grade contains terbium, dysprosium or samarium (Announcement 18/2025), where it comes from and what share of the value of each product you make it represents.

2. 2

   Review the certificate and the undertakings before signing

   We check who the end user is, that the use described is the real one, that any resale is declared and that the undertakings go no further than art. 24 of Decree 792 requires. If MOFCOM also asks for a document from a Spanish public body (art. 24(1)), we consider the International Import Certificate, although there is no record that MOFCOM accepts it, and we prepare the application, which your company signs.

3. 3

   Follow the supplier's licence in China

   Our partners in China request from the supplier, and cross-check, the application date, the acceptance, every MOFCOM request and the decision. If Chinese customs open a questioning procedure, they prepare the technical file with the exporter for the 7 working days of Announcement 52/2026. Before MOFCOM and customs, it is the Chinese exporter that files.

4. 4

   Screen customers and secure the resale chain

   Before each sale, customers and destinations are checked against MOFCOM's lists and against US military users; and mirror clauses go into your sales: end use, no transfer without permission, cooperation in verifications and immediate notice if anything changes.

5. 5

   Prepare for the end of the suspension

   A bill of materials with the origin and value of each magnet, destinations of each product, inside and outside the European Union, and a plan for both scenarios: 10 November 2026 under Announcement 70/2025 and 10 January 2027, the extension announced on 28 September 2026 that no announcement has yet formalised. We review MOFCOM's announcements before those dates and tell you what changes.

6. 6

   Rewrite the contracts and, if there is a dispute, claim

   Licence, export control, force majeure and change-of-circumstances clauses in purchases and sales. If the supplier fails to perform, a formal demand with an additional period which, if it defines the subject of the dispute and proposes negotiation, also serves as the negotiation attempt under Organic Law 1/2025 and, failing agreement, arbitration or a claim before the sección civil del Tribunal de Instancia (the civil section of the court of first instance), as the contract provides, with the expert report as evidence, signed by an expert holding an official qualification on the basis of our expert engineers' inspection.

The law that applies

• Arts. 79 y 80 de la Convención de Viena de 1980. It exempts the party in breach that proves an impediment beyond its control which it could not be expected to have taken into account when contracting, or to have avoided or overcome; if it engaged a third party to perform, that party must also be exempt. The exemption lasts as long as the impediment, requires notice within a reasonable time and only excludes damages. No party may rely on the other's failure to the extent that it caused it. BOE-A-1991-2552
• Art. 71 de la Convención de Viena de 1980. Either party may suspend the performance of its obligations if, after the contract is concluded, it becomes apparent that the other will not perform a substantial part owing to a serious deficiency in its ability to perform or its creditworthiness, or to its conduct; it must give notice immediately and perform if the other provides adequate assurance. BOE-A-1991-2552
• Arts. 1105 y 1964.2 del Código Civil. Except in the cases mentioned by law and those in which the obligation so provides, nobody is liable for events that could not be foreseen or which, if foreseen, were unavoidable. Personal actions with no special period are time-barred five years after performance can be demanded. BOE-A-1889-4763
• Arts. 2, 24, 25, 28 y 29 del Reglamento (UE) 2024/1252, de materias primas fundamentales. Member States identify the large companies (more than 500 employees and 150 million euros of worldwide turnover) that use strategic raw materials for batteries, traction motors, robotics, drones, advanced chips and other technologies; these assess the risk in their supply chain at least every three years, using public information if their suppliers do not provide it. The Commission runs a voluntary demand aggregation and joint purchasing system. Anyone placing on the market industrial robots, electric motors and other products with permanent magnets must label them two years after the implementing act on the format and, above 0.2 kg of magnets, publish their recycled content. 02024R1252-20240503
• Art. 31 del RD 679/2014. It sets the control documents for foreign trade in defence and dual-use items, among them the International Import Certificate issued by the Secretaría de Estado de Comercio for dual-use imports. They may not be transferred and are valid for six months. BOE-A-2014-8926
• Arts. 3 y 4 del Reglamento (UE) 2021/821, de doble uso. Exporting a dual-use item listed in Annex I outside the Union requires authorisation. For unlisted items it may be required where the authority informs the exporter that they may be intended for sensitive uses, and an exporter aware of this must notify it. 02021R0821-20260921
• Arts. 3, 5 y 7 de la Ley Orgánica 1/2025. Before suing in civil matters a suitable dispute resolution method must be attempted, also in cross-border disputes; direct negotiation or negotiation between lawyers qualifies. It is not required for interim measures before the claim, preliminary inquiries or enforcement claims, and the request interrupts the limitation period or suspends the expiry period. BOE-A-2025-76

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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