Introduction to China’s Trade Sanctions System

By: Nancy Nan (AnJie Broad/China Law Vision)

Trade Sanctions Legislation in China

China’s trade sanctions framework is characterized by both defensive and counteractive measures. It is established and continuously refined to address discriminatory and restrictive actions taken by foreign countries against Chinese citizens, enterprises, or other organizations. These actions often contravene international law and basic norms of international relations, causing harm to the legitimate rights and interests of China and its citizens, organizations, or individuals.

1. Measures to Counter the Inappropriate Extraterritorial Application of Foreign Laws, Measures, and Judgments

On January 9, 2021, the Ministry of Commerce of China introduced the “Measures for Blocking the Inappropriate Extraterritorial Application of Foreign Laws and Measures” (referred to as the “Blocking Measures”). These measures aim to block the extraterritorial application of foreign laws and measures that violate international law and basic norms of international relations. They also aim to prevent improper prohibitions or restrictions imposed by foreign laws and measures on Chinese citizens, legal entities, or other organizations from engaging in normal economic, trade, and related activities with third countries (regions) and their citizens, legal entities, or other organizations.

Under the “Blocking Measures,” Chinese citizens, legal entities, or other organizations are required to report relevant situations truthfully to the competent commerce department of the State Council within 30 days when encountering situations where foreign laws and measures prohibit or restrict their normal economic and trade activities with third countries (regions) and their citizens, legal entities, or other organizations. In cases where foreign laws and measures are deemed to have improper extraterritorial application, the competent commerce department of the State Council may issue an injunction prohibiting recognition, enforcement, and compliance with relevant foreign laws and measures. If compliance with foreign laws and measures within the scope of the prohibition leads to infringement on the legitimate rights and interests of Chinese citizens, legal entities, or other organizations, resulting in losses, affected parties may file lawsuits in court to seek compensation. If the parties subject to the judgment or ruling of the court refuse to comply, Chinese citizens, legal entities, or other organizations may seek compulsory enforcement from the court.

On June 10, 2021, the Anti-Foreign Sanctions Law of the People’s Republic of China (referred to as the “Anti-Foreign Sanctions Law”) came into effect. Article 12, Paragraph 1 of this law prohibits organizations or individuals from enforcing or assisting in enforcing discriminatory restrictive measures imposed by foreign countries against Chinese citizens and organizations.

Moreover, for the recognition and enforcement of effective judgments rendered by foreign courts, Article 300 of the new Civil Procedure Law of the People’s Republic of China, effective January 1, 2024, specifies that if a court determines that an effective judgment made by a foreign court violates the basic principles of Chinese laws or national sovereignty, security, or public interests, it shall refuse to recognize and enforce it…

CONTINUE READING…