On 23 March 2025, China’s State Council promulgated the Regulations on the Implementation of the Anti-Foreign Sanctions Law, which took immediate effect. The regulations build on China’s existing Anti-Foreign Sanctions Law (AFSL) and the Law on Foreign Relations. They establish clear administrative procedures and designate competent authorities for implementing countermeasures at the statutory level, strengthening the legal framework and expanding the operational toolkit for responding to foreign sanctions.
China has established a comprehensive legal framework against foreign sanctions, comprising the AFSL and the Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures. This system upholds China’s independent foreign policy while opposing unilateral sanctions and long-arm jurisdiction.
Partner
Dacheng Law Offices
Tel: +86 021 3872 2283
E-mail: jianlin.ni@dentons.cn
The framework incorporates multiple sanction instruments with distinct legal consequences, including export control lists, watch lists, the unreliable entities list, countermeasures lists and individual sanction decisions. In practice, Chinese companies have successfully invoked article 12 of the AFSL to establish defensive mechanisms protecting their legitimate rights.
The regulations focus primarily on four key operational dimensions.
Targeted countermeasures against parties involved in malicious foreign litigation and judgment enforcement. Article 19 of the regulations specifically designates for sanctions listing any entities, organisations or individuals participating in legal actions and judgment enforcement initiated by foreign nations, organisations or individuals. These actions are deemed hostile to China’s sovereignty, security or development interests – a deliberate expansion beyond the baseline AFSL provisions.
Beyond standard responses such as entry bans, asset freezes and transaction restrictions, the regulations explicitly reserve authority for more severe measures, including compulsory asset enforcement, when confronting the above-mentioned cases.
Associate
Dacheng Law Offices
Tel:+86 021 3872 2508
E-mail: anqi.wu@dentons.cn
Standardised procedural safeguards for imposing countermeasures. Three key mechanisms are adopted: (1) a dual-track investigative and consultative process empowers relevant State Council departments to conduct inquiries while maintaining diplomatic engagement; (2) transparency requirements mandate publishing full details – including targets, specific measures and effective dates – through official channels when enacting sanctions; and (3) affected parties may petition for suspension, modification or revocation of measures, triggering mandatory governmental reassessment based on prevailing circumstances.
Delineated departmental responsibilities and enhanced inter-agency co-ordination in sanctions enforcement. The regulations assign specific counter-sanction duties to relevant State Council ministries – including foreign affairs, commerce, development reform and justice – under a unified working mechanism. These authorities must strengthen operational collaboration and real-time information sharing when determining and implementing measures to ensure a cohesive enforcement approach.
Reaffirmed civil litigation rights to protect the lawful interests of Chinese citizens and organisations. Under the provisions, any organisations or individuals that implement or facilitate discriminatory foreign restrictions against Chinese nationals or entities and infringe their legal rights may face lawsuits in domestic courts, with affected parties entitled to seek injunctions and compensation for damages.
The regulations introduce new enforcement powers allowing relevant State Council departments to summon, mandate corrective action and impose penalties on entities found implementing or facilitating foreign sanctions measures.
A landmark settlement has emerged as the first publicly documented case invoking China’s AFSL. According to the Supreme People’s Court’s 2025 work report, a Chinese maritime engineering firm successfully recovered more than RMB84 million (USD11.5 million) in shipbuilding payments through court-mediated arbitration after a foreign equipment manufacturer terminated their contract citing third-country sanctions. This precedent-setting case marks the judiciary’s first application of the AFSL to resolve sanctions-related disputes.
The case has been included in the People’s Courts’ case database as the first anti-foreign sanctions lawsuit filed under article 12 of the relevant legislation. While this landmark case establishes an important precedent, its resolution through mediation means substantive legal issues remain unexplored, leaving key questions of judicial interpretation and application standards for future determination.
Chinese enterprises can adopt several protective measures against sanctions risks. A robust compliance system should incorporate thorough due diligence, sanctions exemption clauses and targeted risk assessments. Companies must monitor regulatory developments, conduct regular staff training and seek professional compliance advice, with particular attention to judicial remedies.
Where sanctions cause material harm, businesses may lodge legal claims through Chinese courts, including injunctions to halt damaging actions and claims for financial compensation. During litigation, companies can apply for asset preservation orders to freeze counterparties’ assets as protective measures.
In conclusion, the enactment and implementation of the regulations mark a significant advancement in China’s counter-sanctions framework, substantially enhancing the enforceability of retaliatory measures. This regulatory development demonstrates China’s resolute stance and governance capabilities on the international stage, serving as a deterrent that compels foreign governments and organisations to exercise greater caution when considering sanctions against Chinese entities.
Ni Jianlin is a partner at Dacheng Law Offices. He can be contacted by phone at +86 021 3872 2283 and by mail at jianlin.ni@dentons.cn
Wu Anqi is an associate at Dacheng Law Offices. She can be contacted by phone at +86 021 3872 2508 and by mail at anqi.wu@dentons.cn
