On 9 Jan. 2021, approved by China’s State Council, the Ministry of Commerce promulgated the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (阻断外国法律与措施不当域外适用办法) (“the Rules”). There are 16 articles in total, and the Rules shall be effective as of the date of the promulgation.

The Rules apply to situations where the extra-territorial application of foreign legislation and other measures, in violation of international law and the basic principles of international relations, unjustifiably prohibits or restricts the citizens, legal persons or other organizations of China from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations. The Rules shall not apply to such extra-territorial application of foreign legislation and other measures as provided for in treaties or international agreements to which China is a party.

According to the Rules, China will establish a working mechanism led by the competent department of commerce of the State Council, to take charge of counteracting unjustified extra-territorial application of foreign legislation and other measures. The Rules also stipulate measures including information report, the issuance of prohibition order and judicial remedies, for the purpose of safeguarding national sovereignty, security and development interests, as well as protecting the legitimate rights and interests of citizens, legal persons and other organizations of China.