Global Expansion Compliance Weekly | October 14–21 | Three Categories of Construction Machinery, Including Tunnel Boring Machines, Added to Export Controls

The top development for businesses expanding overseas this week is China’s export controls: on October 19, the Ministry of Commerce, together with the General Administration of Customs and other authorities, issued four announcements—Nos. 49 through 52—in a single batch, adjusting controls on items related to shield tunneling machines, drones, and dredgers, as well as customs inquiry procedures. In Southeast Asia, Vietnam’s new rules on foreign-invested trading and retail took effect on October 18, while Malaysia and Indonesia are also tightening oversight of overseas e-commerce and digital transactions.

This Week’s Top Story: Shield Tunneling Machines, Walking Excavators, and High-Altitude Wet-Mix Shotcrete Machines Added to Export Controls

What happened. On October 19, the Ministry of Commerce and the General Administration of Customs issued Announcement No. 50 of 2026, announcing export controls on shield tunneling machines and other items. The announcement officially takes effect on November 18, 2026, with the Dual-Use Items Export Control List updated at the same time [1]. Status: announced, not yet in effect. The controls cover full-face tunnel boring machines (shield tunneling machines and rock tunnel boring machines), dedicated components such as cutterheads, screw conveyors, segment erectors, and main drives, and remanufacturing technologies; walking excavators exceeding specified thresholds and electrohydraulic proportional control technologies; and high-altitude wet-mix shotcrete machines for use above 3,000 meters, along with their components and hydraulic and pumping technologies [1]. A two-tier system applies: exports to “sensitive countries and regions that have disputes with China” require a license from the Ministry of Commerce under the Export Control Law and the Regulations on Export Control of Dual-Use Items, and exports without a license are prohibited. For exports to other countries and regions, exporters obtain an export certificate by registering and submitting information, and both exporters and end users must undertake not to transfer the items to countries and regions involved in disputes without authorization [1].

Background. Previously, items on the export control list were primarily materials, chips, drones, and similar products. This is the first time heavy equipment for tunneling and construction has been brought under controls as a category. In a press Q&A, a Ministry of Commerce spokesperson said the items “have clear dual-use characteristics” and that countries and regions with established export control dialogue mechanisms with China had already been notified [2]. Notably, the announcement also applies to overseas entities: organizations and individuals outside China may not transfer or supply the specified Chinese-origin items to countries and regions involved in disputes without authorization [1].

Impact. For manufacturers and exporters of shield tunneling machines and excavators, every export shipment after November 18 will need to follow one of two routes: a license or a registration-based export certificate. If customs authorities question the accuracy of submitted information, they will initiate an inquiry in accordance with the law, and the goods will not be released while the inquiry is underway [1]. For Chinese engineering contractors undertaking metro, tunnel, and hydropower projects in Southeast Asia, equipment exports and end-user undertakings in the project’s host country will become new steps in contracting and logistics. Overseas partners and equipment lessees must also be included in compliance reviews if onward transfers are involved. The Ministry of Commerce said applications that meet the requirements will be approved [2].

What remains unclear. The announcement does not provide a specific list of the “sensitive countries and regions that have disputes with China.” The portal for registration and information submission, processing timelines, and the format of end-user undertakings also await supporting operational guidance. Businesses should likewise watch for further clarification on how orders signed before November 18 but shipped afterward will be handled, with official announcements serving as the authoritative reference.

Key Developments

Export Controls on Drone-Related Items “Optimized and Adjusted,” Effective November 18

Announcement No. 49 of 2026, issued the same day by the Ministry of Commerce, the General Administration of Customs, and the Equipment Development Department of the Central Military Commission, optimizes and adjusts export control measures on certain unmanned aircraft-related items with the approval of the State Council and the Central Military Commission. The changes take effect on November 18, 2026 [3]. Status: Published, not yet in effect. The adjustments cover autopilots, gimbals, and payload technologies; complete aircraft meeting specified thresholds for endurance, range, wind resistance, and spraying capacity; and engines, radio equipment, brushless motors, electronic speed controllers, carbon-fiber propellers, and related software and technology that meet specified thresholds. Exporters of these items must apply to the Ministry of Commerce for a license [3]. The announcement also specifies that item 9A112 does not control model aircraft specially designed for recreation or competition, and introduces facilitation measures for certain items, including export registration, re-export after exhibitions, and general licenses [3].

Why it matters: Complete drones and components such as motors, electronic speed controllers, and propeller blades are important categories of Chinese exports to Southeast Asia. Companies in this sector need to check each product’s specifications against the new control list codes before November 18 to determine which models require a license.

New Rules on Customs Queries and Identification of Dual-Use Items: Effective Immediately, Covering Cross-Border E-Commerce and Express Shipments

Announcement No. 52 of 2026 from the Ministry of Commerce and the General Administration of Customs stipulates that if an export license issued by the Ministry of Commerce is not presented at the time of export, and customs has evidence that the goods may be dual-use items, customs will raise a query with the consignor and issue a Notice of Customs Query Regarding Export Controls on Dual-Use Items [4]. Under the announcement, the consignor must submit contracts, invoices, technical documentation, and an explanation of why the goods fall outside the scope of controls within 7 working days. Customs must make a decision or refer the matter to the Ministry of Commerce for identification within 15 working days; the ministry likewise has 15 working days to complete its identification. The announcement takes effect on its publication date, simultaneously repealing General Administration of Customs Announcement No. 123 of 2025 [4]. Status: In effect (October 19). Unaffected goods covered by the same customs declaration may be separated for release. The rules also apply to cross-border e-commerce, postal shipments, express shipments, and goods carried by travelers [4].

Why it matters: Cross-border sellers shipping small parcels directly to customers or stocking overseas warehouses have historically had limited exposure to dual-use item reviews. The new rules specify the documents and deadlines required when customs raises a query. Businesses should prepare product specifications in advance to avoid lengthy delays at ports of entry or exit.

Vietnam’s Decree No. 342 Takes Effect: Foreign-Invested Trading and Retail Businesses and E-Commerce Platform Operators Need to Recheck Licenses

Vietnam’s Decree No. 342/2026/NĐ-CP was issued on September 3 and took effect on October 18, replacing Decree No. 09/2018, which had been in force for eight years [6][7]. Status: In effect. It applies to foreign investors and foreign-invested enterprises engaged in the purchase and sale of goods and related activities in Vietnam. Activities including retail distribution, imports and wholesale of certain goods, logistics, leasing, trade promotion, and operation of e-commerce platforms require a business license issued by the provincial-level People’s Committee where the company is headquartered. Establishing a retail outlet requires a separate license [6]. A provincial-level committee assesses the Economic Needs Test (ENT) within 20 working days. The license review period is 14 working days, with extensions possible when security consultations are required. Reporting is now required every six months, and a license application must be submitted within 30 days after a merger or acquisition [7].

Why it matters: Chinese-invested companies opening stores, importing and wholesaling goods, or operating e-commerce platforms in Vietnam should check whether their existing licenses cover their business activities under the new decree, paying particular attention to new store openings and post-merger or acquisition transition arrangements.

Malaysia considers licensing regime for overseas e-commerce platforms; E-Commerce Bill to be tabled in Parliament in 2027

Malaysia’s Minister of Domestic Trade and Cost of Living, Armizan Mohd Ali, said on October 14 that the proposed E-Commerce Bill could require overseas e-commerce platforms serving Malaysian consumers to obtain a license. However, the licensing regime has not been finalized and is still being refined through discussions with relevant ministries and agencies [8]. The Cabinet approved the policy proposal for new e-commerce legislation on July 8 [8]. On October 18, Deputy Minister Fuziah Salleh said the first draft of the bill had been completed and was being revised, with plans to table it during Parliament’s first sitting in 2027. She noted that Malaysia currently has no law specifically regulating e-commerce [9]. Status: Being drafted; not yet tabled in Parliament. Details remain subject to official announcements.

Image: News photo of Malaysia’s Deputy Minister of Domestic Trade and Cost of Living, Fuziah Salleh (Source: Malay Mail)

Why it matters: If the licensing regime is implemented, Chinese cross-border platforms serving consumers in Malaysia will face local licensing requirements, and the allocation of responsibilities for merchants selling on those platforms may also change.

Indonesia expands cross-border digital VAT collection mechanism: 30 banks and fintech firms set to join

Indonesia has implemented a VAT collection mechanism for cross-border digital transactions (SPP-TDLN) under Minister of Finance Regulation (PMK) No. 49 of 2026, collecting VAT on overseas digital transactions at the payment stage [10][11]. Status: In effect and operating on a stable basis. Director General of Taxes Bimo Wijayanto said meetings had been held with 30 platforms set to join [10]. According to reports, the current collection agents are five state-owned banks and LinkAja, with the remaining institutions aiming to connect before November 2026 [11]. Reported figures show that approximately 5.5 million transactions, totaling around IDR 10 trillion, were processed from September 25 to October 11 [10]. The Directorate General of Taxes emphasized that SPP-TDLN is neither a new tax nor an increase in the VAT rate [11].

Image: Illustration of fintech and digital payments, accompanying coverage of Indonesia’s VAT collection on cross-border digital transactions (Source: Bisnis.com)

Why it matters: For overseas digital sellers not designated as VAT collectors, VAT will be withheld at the payment stage on payments from Indonesian buyers, requiring corresponding adjustments to pricing and reconciliation.

By the Numbers

• November 18, 2026: New export control rules for tunnel boring machines and drone-related items take effect [1]
• 7 business days: Deadline for submitting explanatory materials after a customs inquiry [4]
• Approximately 5.5 million transactions: Cross-border digital transactions processed by Indonesia’s SPP-TDLN from September 25 to October 11 [10]
• 20 business days: Deadline for Vietnam’s provincial-level committees to complete economic needs test assessments [7]
• $2 trillion: Target size of the digital economy by 2030 under ASEAN’s Digital Economy Framework Agreement [13]

News Briefs

• Ministry of Commerce and General Administration of Customs: Announcement No. 51 refines and adjusts export controls on dredger-related items, with dragheads, cutterheads, and other items subject to controls based on dimensional thresholds, effective November 18 [5]
• Indonesia’s Directorate General of Taxes: Blibli, Lazada, Shopee, and Tokopedia have been designated to withhold sellers’ Article 22 income tax, with collection beginning October 1; the Indonesian E-Commerce Association noted that platforms vary in their system readiness [12]
• ASEAN: Following the signing of the Digital Economy Framework Agreement (DEFA), work on the implementation plan and ratification procedures will proceed in parallel; signing is expected at the ASEAN Summit in November [13]
• Ministry of Commerce: In a press Q&A on export controls for tunnel boring machines and dredgers, the ministry said export license applications that meet the requirements will be approved [2]

Editor’s Take

In our view, several new rules this week point in the same direction: regulators are shifting from after-the-fact penalties toward licensing and registration requirements before goods leave the country or businesses enter a market. In China, export controls are expanding from materials and chips to construction machinery, while the accompanying customs inquiry procedures also cover cross-border e-commerce and small express parcels. In Southeast Asia, Vietnam requires foreign-invested businesses to obtain separate licenses for trading and e-commerce platform operations, Malaysia is considering licensing overseas platforms, and Indonesia is moving VAT collection to the payment stage. Notably, most of these rules have clear effective dates or onboarding schedules, leaving businesses only weeks to months to prepare. For businesses expanding internationally, building and regularly reviewing a country-by-country, product-by-product checklist of licenses and registrations matters more than chasing individual headlines.

What to Watch Next

• November 2026: Indonesia plans to connect approximately 30 banks and fintech institutions to SPP-TDLN, bringing the system into full end-to-end operation [10][11]
• November 2026: The 49th ASEAN Summit, where the Digital Economy Framework Agreement is expected to be signed [13]
• November 18, 2026: The Ministry of Commerce’s export control Announcements No. 49, 50, and 51 take effect [1][3][5]

References

1. Ministry of Commerce and General Administration of Customs Announcement No. 50 of 2026: Decision to Implement Export Controls on Tunnel Boring Machines and Other Items — Ministry of Commerce, accessed on 2026-10-21
2. Ministry of Commerce Spokesperson Answers Reporters’ Questions on Export Controls on Tunnel Boring Machines and Other Items and Adjustments to Export Control Measures for Dredger-Related Items — Ministry of Commerce, accessed on 2026-10-21
3. Ministry of Commerce, General Administration of Customs, and Equipment Development Department of the Central Military Commission Announcement No. 49 of 2026: Decision to Adjust and Optimize Export Control Measures for Drone-Related Items — Ministry of Commerce, accessed on 2026-10-21
4. Ministry of Commerce and General Administration of Customs Announcement No. 52 of 2026: Matters Concerning Further Improvements to Inquiry and Identification Procedures for Dual-Use Item Export Controls — Ministry of Commerce, accessed on 2026-10-21
5. Ministry of Commerce and General Administration of Customs Announcement No. 51 of 2026: Decision to Adjust and Optimize Export Control Measures for Dredger-Related Items — Ministry of Commerce, accessed on 2026-10-21
6. FDI Enterprises Need to Review Their Business Licenses Before October 18 — Doanh nghiệp Hội nhập, accessed on 2026-10-21
7. Vietnam Revises Retail Regulations After Eight Years: What FDI Enterprises Need to Know — Kinhdoanhnet, accessed on 2026-10-21
8. Foreign e-commerce platforms may require licences under proposed law, says minister — The Star, accessed on 2026-10-21
9. E-Commerce Bill to be tabled next year to regulate online transactions, says deputy minister — Malay Mail, accessed on 2026-10-21
10. Get Ready: 30 Banks and Fintech Companies Set to Collect VAT on Overseas Digital Transactions — Bisnis.com, accessed on 2026-10-21
11. Directorate General of Taxes Prepares 30 Banks and Fintech Companies to Collect Tax on Overseas Transactions — Liputan6.com, accessed on 2026-10-21
12. Four Marketplaces Have Begun Collecting Article 22 Income Tax from Sellers; idEA Highlights Three Issues — DDTCNews, accessed on 2026-10-21
13. ASEAN Expects More Countries To Accede To TAC At November Summit -- Sec-Gen — Bernama, accessed on 2026-10-21