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On January 9, 2021, China’s Ministry of Commerce (MOFCOM) issued its No. 1 Order of 2021 titled “The Rules on Blocking Unjustified Extraterritorial Application of Foreign Legislation.
On January 9, 2021, China’s Ministry of Commerce (“
MOFCOM”) issued its first order of the year, the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (the “
Rules”), which are immediately effective as of the date of promulgation. These Rules are aimed to counteract the effects of US secondary sanctions, and parallels are inevitably being made with the EU s Blocking Statute
1. This article will point out the five aspects to know about the Rules.
I. What will be counteracted under the Rules?
The Rules aim to block the unjustified extra-territorial application, in China and to Chinese persons and entities, of certain foreign legislation and measures. According to Article 2 of the Rules, the foreign legislation or measures would be blocked if the application was determined to
In response to a U.S. government consensus that trade with China involves grave national security risks, the Trump Administration promulgated a broad series of China-directed export controls, economic sanctions and import rules. The flow of trade measures became a torrent in the Trump Administration’s final months. This alert briefly surveys key new trade controls from late in the Trump Administration and Chinese policy responses that the Biden Administration inherits.
It is not clear that the Biden Administration will prioritize a more regularized trading relationship with China. As it moves toward a more traditional governance, the Biden Administration may seek to develop an overall strategic policy toward China before undertaking piecemeal changes. When coupled with strong congressional support for tough measures on China, major modifications in U.S. treatment of China would not appear likely in the near term.
The Ministry of Commerce (MOFCOM) released Order No. 1 of 2021 on
Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (the Rules) effective on January 9, 2021. The Rules, which are based upon the
National Security Law, have 16 articles in total and seek to prevent companies from complying with foreign laws prohibiting transactions with Chinese firms. It is our belief that the Rules are a direct response to the ongoing sanctions imposed upon Chinese tech companies, particularly to U.S. actions against Chinese companies including Huawei and Tencent, despite the official Ministry of Commerce claims that the Rules are not directed at a specific country or specific industry.