China Enacts Export Control Law Following Announcement of the Unreliable Entities List
China is attempting to improve its foreign policy position by discouraging multinational corporations from complying with US laws. Come check out our article to learn more.
The Chinese government has adopted laws to strengthen its foreign affairs position, taking several steps to discourage multinationals from complying with the U.S. and other foreign laws. Its actions include enacting the following laws:
- Provisions on the Unreliable Entity List (UEL)
- Measures on Obstructing the Unjustified Application of Foreign Laws and Measures (the "Blocking Measures")
- Anti-Foreign Sanctions Law (AFSL)
- Data Security Law and Personal Information Protection Law (collectively, "Data Laws")
China’s Export Control Laws
The Export Control Law (ECL) took effect in December 2020, unifying the framework for export control. The law applies to dual-use items, military products, nuclear materials, technologies, services, and items related to the protection of national security and interests or the fulfillment of non-proliferation or other international obligations. The ECL also creates a licensing and end-user certification regime. Before the ECL, export control regulations were in multiple laws, regulations, and guidelines enforced by an array of government ministries.
The Chinese Ministry of Commerce (MOFCOM) issued the UEL in 2020. The UEL is a list-based counter sanction enabling the Chinese government to impose punitive measures against foreign entities it believes endanger its sovereignty, national security, or development interests. It also applies to entities that suspend routine transactions or discriminatory actions against Chinese enterprises, organizations, or individuals.
The MOFCOM issued the Blocking Measures in 2021, which gave the Chinese government the ability to create a "Prohibition Order" on foreign laws, measures, or sanctions. The prohibition order bans any compliance with actions that are to the detriment of a Chinese entity, and it enables countermeasures.
In 2021, the China Data Laws came into effect. Their purpose is to prevent harm to China's interests. They restrict cross-border transfer of certain types of company and personal data. Noncompliance with the laws can result in civil, administrative, and even criminal punishments. For example, individuals must inform Chinese government agencies before they produce any data to foreign governments regarding any foreign investigation or enforcement action.
Again in 2021, the Chinese government enacted the AFSL, turning the anti-sanction regime from regulation into law. The AFSL prohibits individuals and companies from discriminatory actions against China's national interests while requiring them to cooperate and implement Chinese countermeasures. It is a means to disincentivize sanctions and other laws by foreign governments against Chinese interests.
China Uses Its Sanction Laws
China has already sanctioned several people, including former Secretary of Commerce Wilbur Ross and Human Rights Watch's China director, Sophie Richardson, after the U.S. added seven people to the Hong Kong Business Advisory and Treasury Specially Designated Nationals list. Moreover, China also sanctioned four members of the U.S. government's Commission on International Religious Freedom after revising the Uyghur Forced Labor Prevention Act and subsequent U.S. Treasury sanctions against several Chinese companies for their involvement in Xinjiang.
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