After the Third Plenary Session of the 18th Central Committee of the Communist Party of China put forward the clear requirements of "promoting deep development of military civilian integration" and "guiding advantageous private enterprises to enter the field of military research, production, and maintenance", China's military industry access system has changed accordingly. Many private enterprises want to explore the market in the military industry field, but due to the fact that the military industry is mostly classified, they want to participate in classified military industry projects, It is necessary to obtain the confidentiality qualification of weapon and equipment research and production units.

What are the confidentiality qualifications of weapon and equipment research and production units?

Confidentiality qualification is the evaluation and recognition by the state of the basic confidentiality ability possessed by weapons and equipment research and production units, and is a necessary condition for enterprises and institutions to undertake research and production tasks related to classified weapons and equipment. Starting from July 1, 2021, the confidentiality qualifications of weapon and equipment research and production units will be adjusted to two levels: level one and level two, and new applications for level three confidentiality qualifications will no longer be accepted. Units undertaking top secret scientific research and production tasks shall apply for first-class confidentiality qualifications. Units undertaking confidential or secret level scientific research and production tasks shall apply for second level confidentiality qualifications.

Which units need to apply for the confidentiality qualification of weapon and equipment research and production units?

Enterprises and institutions that undertake or intend to undertake research and production tasks related to classified weapons and equipment shall apply in accordance with the highest level of confidentiality for the weapons and equipment research and production projects or products they undertake or intend to undertake, and obtain the corresponding level of confidentiality qualification for weapons and equipment research and production units after undergoing confidentiality qualification recognition according to certain procedures. However, weapons and equipment development projects or products that are only classified in terms of background, purpose, or quantity, or secret level products that are not listed in the Professional (Product) Catalogue of Weapons and Equipment Research and Production License and have urgent or short-term production requirements, do not fall within the scope of military industry confidentiality qualification recognition and do not need to apply for the confidentiality qualification of weapons and equipment research and production units.

What conditions should be met to apply for the confidentiality qualification of a research and production unit for weapons and equipment?

According to the Measures for the Recognition of Confidentiality Qualifications of Weapon and Equipment Research and Production Units, units applying for confidentiality qualifications should meet the following basic conditions:

（1） Legal persons established in accordance with the law within the territory of the People's Republic of China for more than 3 years, with no criminal record;

（2） Undertaking or intending to undertake projects or products related to scientific research and production of weapons and equipment that involve state secrets;

（3） The proportion of investment by foreign investors and their concerted actors who have no overseas (including Hong Kong, Macao, and Taiwan) control or direct investment and invest indirectly shall not exceed 20%;

（4） The legal representative, main person in charge, actual controller, members of the board of directors (supervisors), senior management, and personnel who undertake or intend to undertake research and production tasks related to classified weapons and equipment shall have the nationality of the People's Republic of China, no permanent residency or long-term residency permit overseas, and no marital relationship with overseas personnel (including Hong Kong, Macao, and Taiwan);

（5） Having a fixed research, production, and office space, and the ability to undertake research and production tasks related to classified weapons and equipment;

（6） The confidentiality system is sound, with specialized institutions or personnel responsible for confidentiality work, and the protection of premises, facilities, and equipment complies with national confidentiality regulations and standards;

（7） No leakage incidents occurred within one year;

（8） Other conditions stipulated by laws, administrative regulations, and national confidentiality administrative departments.

For listed companies applying for confidentiality qualifications, in addition to the above-mentioned conditions, they should also meet the following conditions:

（1） Has not received administrative penalties from securities regulatory authorities in the past three years;

（2） Improve internal control and information disclosure systems;

（3） The actual controller promises to maintain control during the application period and the validity period of the confidentiality qualification.