The State Council on March 23 promulgated the Regulations on Implementation of the Anti-Foreign Sanctions Law (the “Regulations”), 实施《中华人民共和国反外国制裁法》的规定_外交、外事_中国政府网, for the purpose of implementation of the Anti-Foreign Sanctions Law (2021) in accordance with the Foreign Relations Law (2023 rev.) Foreign Relations Law (2023), and the Anti-Foreign Sanctions Law. Law of the PRC on Countering Foreign Sanctions; China Enacts Anti-Sanctions Law. The Regulations took effect immediately upon promulgation.
The Regulations, comprising 22 articles, authorize the relevant department(s) of the State Council to designate relevant organizations and individuals as well as related organizations and individuals subject to China’s countermeasures in response to actions by foreign countries. The scope of subject actions by foreign countries includes discriminatory restrictions on Chinese citizens or organizations, interference in China’s internal affairs, and assistance or support for actions which endanger China’s sovereignty, security or development interests in violation of international law or the basic principles of international relations (Article 3). China’s sovereignty and security presumably encompasses its governance of the Hong Kong and Macau Special Administrative Regions, assertion of sovereignty over Taiwan, and expansive claims to jurisdiction over the South China Sea, East China Sea and Yellow Sea, in addition to the 31 provincial-level jurisdictions of Mainland China.
The Regulations delegate authority to relevant government agencies to enforce the countermeasures authorized under the Anti-Foreign Sanctions Law (Articles 6–8). They also clarify the scope of “other necessary measures” as referenced in the Law, specifying that such measures may include prohibiting or restricting participation in import or export activities related to China, restricting or prohibiting investments within China, banning the export of relevant items, restricting or prohibiting the transfer of data, revoking or limiting work permits, lengths of stay in country or residency qualifications for affected individuals in China, and imposing fines (Article 7).
The Regulations further provides that for anyone who implement or assists in the implementation of discriminatory restrictive measures imposed by foreign countries against Chinese citizens or organizations, the relevant departments of the State Council have the authority to conduct interviews, order corrective action, and take corresponding disciplinary or remedial actions (Article 17). The Regulations moreover provide a right of action in Chinese courts for Chinese organizations and individuals against any organization or individual which implements or assists in the implementation of such discriminatory restrictions by foreign countries or individuals. Statutory authority for such action by Chinese organizations and individuals was provided in Article 11 para. 1 of the Anti-Foreign Sanctions Law. Thus, organizations and individuals in foreign jurisdictions which implement or assist in the implementation of such restrictions may be subject to litigation in Chinese court which are deemed to discriminate against Chinese citizens or organizations, interfere in China’s internal affairs, or assist or support actions which endanger China’s sovereignty, security or development interests in violation of international law or the basic principles of international relations, even if such actions are conducted overseas and in compliance with local law (Article 18). The Regulations also broaden the scope of foreign sanctions to include litigation initiated by a foreign country, organization, or individual that threatens China’s sovereignty, security, or development interests. In response, the relevant departments of the State Council are authorized to place the relevant parties—including those participating in the litigation or enforcement of judgments—as well as related organizations or individuals, on a countermeasures list. Available countermeasures include restrictions on entry into China; seizure, impoundment, or freezing of assets within China; and prohibitions or limitations on relevant transactions or cooperation. The authorities also reserve the right to enforce property-related measures and implement other, more severe countermeasures (Article 19).
The Regulations are intended to expand the arsenal of actions which can be taken against organizations and individuals. However, the Regulations provide for exceptions under special circumstances if relevant organizations or individuals need to conduct otherwise prohibited or restricted relations with organizations or individuals which are subject to countermeasures under the Regulations. Relevant organizations or individuals in such circumstances may apply to the relevant department(s) of the State Council which had imposed the countermeasures (Article 16). It is unclear, however, how likely any organization or individual in China will be to seek or obtain such an exception.
The relevant departments of the State Council conversely have the power to conduct interviews, order corrective action and take corresponding measures against any party which implements or assists in the implementation of discriminatory measures against Chinese citizens or organizations or engage in other actions proscribed under Article 3 (Article 12).
The Regulations also expressly encourage and support law firms, notarial institutions and other professional service organizations to provide legal services to counter foreign sanctions, presumably in Chinese courts (Article 20). This appears to be a rare instance in which China’s authorities encourage (and implicitly promise support for) litigation, but this may be explained by the likelihood that the counterparties are likely to be foreign nationals or disaffected Chinese nationals resident overseas rather than Chinese citizens or organizations in China. The Chinese authorities nevertheless appear to hope that the Regulations as well as the underlying statute will have a chilling effect upon foreign individuals and organizations actually or potentially critical of China.
