On 23 March 2025, the prime minister promulgated the act on the Implementation of the Anti-Foreign Sanctions Law. The provisions serve to provide countermeasures to foreign, unilateral sanctions targeting China. The new implementation act provides a basis for Chinese authorities to list certain entities as a countermeasure, and specifies the restrictions that may be imposed with respect to such listed and related entities.
The Implementation Act provides, among other things, that discriminatory restrictive measures against Chinese individuals or entities, as decided by central government authorities, may be met with counter-designation of any relevant entities, organisations or individuals.
In addition, companies being deemed as committing, assisting or supporting acts that endanger China’s sovereignty, security and development interests can, through the relevant departments of the State Council, be targeted by countermeasures.
Those targeted by countermeasures can, pursuant to the Implementation Act, apply to have them suspended. According to the act, in order to have the countermeasures suspended, the designated parties should rectify their actions and mitigate the consequences.
The Implementation Act states that any changes to countermeasures may be subject to conditions. Individuals on the list could face several consequences including being denied entry or expelled from China, having their assets seized or frozen, being restricted from conducting business with Chinese entities or individuals, and being restricted from import and export of certain goods and technologies.
The term “other types of property” that can be subject to seizure, detention or freezing under the anti-foreign sanction law has been declared as including cash, bills, bank deposits, securities, fund shares, equity, intellectual property rights, accounts receivable, and other property and property rights.
“Relevant transactions, co-operation and other activities” that can be prohibited or restricted are stated to include activities in the fields of education, science and technology, legal services, environmental protection, economy and trade, culture, tourism, health, and sports.
Finally, the Implementation Act outlines that various government departments are responsible for countermeasures and should undertake efforts to counter foreign sanctions within their respective domains (e.g. commerce). It also instructs the departments to co-ordinate and share information with other relevant departments.
The Implementation Act should be seen as a further indication that China intends to implement countermeasures in response to the sanctioning of Chinese entities or individuals. Given the uncertain future development in the areas of global trade and sanctions, the authors’ recommendation for companies that are exposed to these regulatory risks with respect to China – by way of, for example, direct commercial presence or indirect exposure via supply chain or sourcing arrangements – is to monitor developments and be aware that sanctions directed at Chinese parties may be met with countermeasures.
Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Howard Wu (Shanghai) at howard.wu@bakermckenzie.com
