Background

China’s Anti-Foreign Sanctions Law was first implemented in June 2021 and Beijing has now announced a detailed implementation rule that took effect March 23. This rule is considered a response to recent and potential additional tariffs or other sanctions imposed by the U.S.  

Under this rule China can utilize several tools in response to foreign measures against it.

- China will publish a new list of relevant organizations and individuals as well as the countermeasures that may be taken against them if they take discriminatory actions against China.

- Entities on this list may be prohibited or restricted from import and export activities related to China, and Chinese companies are prohibited from exporting related items to them.

- China will grant legal support for local businesses to file lawsuits against entities on this list demanding a cessation of discriminatory actions and compensation for losses.

- China may revoke individual visas, freeze assets, prohibit business transactions, and impose penalties.

China has also expanded related lists, such as the Unreliable Entity List and the Export Control List, to tighten controls on international trade. These restrictions impact U.S. companies that rely on importing goods from China and their Chinese subsidiaries.

U.S. companies should therefore review their current products and processes to identify risks related to exports from China. This will help them prepare for the detailed implementation measures and control lists anticipated in the coming weeks if the U.S. imposes further tariff hikes.

ST&R’s experienced professionals can help in these efforts. Please contact us for more information.

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