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1/6 About an hour ago, MOFCOM dropped 'Order No. 1 of 2021 on Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures'.
It should be of interest to anyone interested in sanctions / export controls.
http://english.mofcom.gov.cn/article/policyrelease/announcement/202101/20210103029708.shtml
It should be of interest to anyone interested in sanctions / export controls.
http://english.mofcom.gov.cn/article/policyrelease/announcement/202101/20210103029708.shtml
2/6 The rules apply 'where the extra-territorial application of foreign legislation and other measures ... prohibits or restricts the citizens, legal persons or other organizations of China from engaging in normal economic, trade and related activities' w/ other economic actors.
3/6 The rules set up a working mechanism for 'counteracting' such foreign legislation. In particular, that body can 'issue a prohibition order to the effect that, the relevant foreign legislation and other measures are not accepted, executed, or observed'.
4/6 Read literally, it counteracts foreign legislation by:
(a) Giving domestic actors standing to seek compensation from firms that comply w/ foreign rules subject to a 'prohibition order'.
(b) Providing scope for Chinese govt to give 'necessary support' to firms that suffer ..
(a) Giving domestic actors standing to seek compensation from firms that comply w/ foreign rules subject to a 'prohibition order'.
(b) Providing scope for Chinese govt to give 'necessary support' to firms that suffer ..
5/6 .. 'significant losses' for violating foreign legislation.
(c) Providing foundation for Beijing to 'take necessary counter-measures' (i.e. retaliate) to 'unjustified extra-territorial application of foreign legislation'.
(d) Threatening fines for those who violate ...
(c) Providing foundation for Beijing to 'take necessary counter-measures' (i.e. retaliate) to 'unjustified extra-territorial application of foreign legislation'.
(d) Threatening fines for those who violate ...
6/6 ... 'prohibition orders' (i.e. those who comply with foreign legislation).
IMO, this is a significant step that could undermine the 'long arm of the law' flowing from export controls, sanctions legislation etc. It makes 'weaponizing' trade harder for the US et al, by ..
IMO, this is a significant step that could undermine the 'long arm of the law' flowing from export controls, sanctions legislation etc. It makes 'weaponizing' trade harder for the US et al, by ..
7/7 .. providing incentives for firms to not comply with the laws that often underpin that 'weaponization'.
@limdarrenj @JDWilson08 @ANewman_forward @henryfarrell @geoffreygertz
@limdarrenj @JDWilson08 @ANewman_forward @henryfarrell @geoffreygertz
Worth seeing @henrysgao's analysis of the Chinese text here: https://twitter.com/henrysgao/status/1347745529447342086
