China Enacts Additional New Law Against Countries that Impose Anti-China Sanctioned the companies that comply with those sanctions.

Wed, 06/23/2021 - 16:17 -- lh4qc
Anti-Foreign Sanctions Law (“AFSL”) Effective Immediately

Effective Immeditely, any country who applies sanctions against China, Chinese entities or Chinese individuals by any third country (excluding sanctions adopted by the United Nations) will be affectd by the new Anti-Foreign Sanctions Law (“AFSL”), imposed by the Chinese Government.

This legislation follows previous law against any company that complies with U.S. sanctions, specificially, the Measures on Blocking Unjustified Extraterritorial Application of Foreign Legislation (the Blocking measures) that went into effect on  Jan 9, 2021.

Companies Doing Business in China - These measure make it particularly difficult for companies that do business both in the United States and China as they could be penalized for complying with U.S. Sanctions, particularly:  

  • New law could penalize companies for complying with U.S. sanctions that would include them on China's new "Unreliable Entity List".
  • Penalties include designation to China’s new “Unreliable Entity” list.
  • Statements against the new laws could also be penalized, restricting the capacity of counsel to advise freely on compliance with U.S. sanctions and Chinese countermeasures.

Targeted Individuals and Entities

The new law directly targets countries issuing sanctions against China. The law grants the Chinese State Council the authority to add specific individual policy makers or government agencies (in the United States and elsewhere) to a countermeasures list, when those persons or entities are identified as having participated in promulgating sanctions against China.

Potential Sanctions

The law provides for the following types of countermeasures:

  1. Travel restrictions (for example, denial or revocation of visas, denial of entry);
  2. Asset freezes (Including, among other things, seizure of any movable property, real estate, and all other types of property in China);
  3. Prohibition against certain transactions with Chinese parties;
  4. Prohibition against conducting certain business activities in China; and
  5. Any other measures deemed necessary by the State Council.

In addition to targeting individual policy makers and their departments, the law also permits countermeasures to be applied to spouses and immediate family members of listed individuals.

New Private Right of Action

Strikingly, the law also creates a right to bring civil lawsuits in Chinese courts against persons who implement, or assist in the implementation of, “discriminatory restrictive measures” that harm Chinese people’s “lawful rights and interests.”

Additional Blocking Measures

In addition to robust countermeasures, the new law also adds additional “blocking” measures, by prohibiting Chinese entities and individuals from any sanctions adopted by third countries against Chinese individuals and entities.

Botom Line

If there is a question with this new law (interpretation or applicablility) please do not proceed without further guidance. The Office of Research Regulatory Affairs is available to assist with questions you may have.  Please contact kjh5e@virginia.edu with any questions.