On 10 June 2021, the National People’s Congress Standing Committee of the People’s Republic of China passed the Law of the PRC on Countering Foreign Sanctions (the “Anti-Sanctions Law”). The Anti-Sanctions Law establishes a legal regime for the protection of Chinese individuals and entities from what are deemed to be discriminatory foreign sanctions and for implementing countermeasures against such sanctions.
Although the Anti-Sanctions Law was adopted on and is effective as of 10 June 2021, given the powers devolved to respective departments of the State Council thereunder, there may be clarifying guidance or regulations issued in due course on how it will be enforced or implemented.
We set out below, some of the key aspects of the Anti-Sanctions Law:
Broad rulemaking powers are further delegated to the State Council and its departments to provide for additional countermeasures against acts that are deemed to harm China’s sovereignty, security, or developmental interests.
As the Anti-Sanctions Law is rather broadly worded, it is not entirely clear at this stage as to the extent of how the provisions will be enforced or implemented. On the face of it, the law establishes a legal basis for retaliatory measures that China can take against sanctions and other measures from the US and other Western countries, and may well be initially aimed at foreign politicians who participate in the implementation of unilateral sanctions on China.
Given that the Anti-Sanctions Law seems to give wide-ranging powers to the relevant State Council departments, more specific guidance or regulations on how the law will be enforced or implemented may be issued in due course.
For now, the effect of the Anti-Sanctions Law is that foreign multinational companies with business or looking to do business in China should look to overlay geopolitical considerations into their decision-making processes.