An Offensive Defense:China’s Anti-Foreign Sanctions Law

By Wang Jiangyu

The Anti-Foreign Sanctions Law（AFSL） adopted by the Standing Committee of the National Peoples Congress （NPC） is a landmark development in Chinas lawfare with Western countries； especially the United States. The AFSL now provides the Chinese Government and citizens with a powerful legal weapon to counteract sanctions imposed by foreign countries against Chinese citizens and corporate entities. For this reason， it has been characterized as Chinas “blocking statute.”

A blocking statute is adopted by a country to hinder the extraterritorial application of foreign legislation. It shields companies in its jurisdiction against foreign sanctions by prohibiting them from complying with the sanctions， and not recognizing foreign court rulings enforcing them.

The blocking statute is no novelty in the international economic system. It has been a response to the expansive application of U.S. sanctions by the international community， in most cases， by the U.S. closest allies.

The United Kingdom， at the forefront of efforts to restrict the extraterritorial reach of American export controls， economic sanctions and trade embargo on Cuba， enacted the Protection of Trading Interests Act 1980 to protect UK sovereignty and trade interests. The European Unions blocking statute， initially promulgated in 1996， protects EU residents and entities by prohibiting EU companies and courts from complying with foreign sanctions laws and stipulates that no foreign court judgments based on these laws have any effect in the EU. The EU updated the blocking statute in August 2018 in an attempt to nullify the extraterritorial sanctions the U.S. had re-imposed on Iran.

Chinas AFSL seems to be slightly different， however. It is more about striking back at those who take part in imposing sanctions against China to “preserve Chinese sovereignty， national security and development interests， and to protect the lawful rights and interests of Chinese citizens and organizations，” as stated in the law.

That is to say the main objective of the law is to punish foreign individuals and entities who directly or indirectly participate in the drafting， decision-making or implementation of foreign discriminatory restrictions on Chinese citizens and entities. The foreigners may be denied entry to China， have their assets in China seized， and be prohibited from doing business with entities and individuals in China.

Notably， at the discretion of the Chinese Government， the subjects of Chinas antisanctions measures may be extended to the spouses and immediate family members and organizations controlled or established by such individuals. At the operational level， the AFSL grants the Chinese Government， corporations and individuals three courses of action.