On January 9, 2021, the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (「Rules」), are hereby promulgated by Ministry of Commerce of the People’s Republic of China (「MOFCOM」) and shall be effective as of the date of the promulgation.
These 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.
These Rules require that where a citizen, legal person or other organization of China is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations, he/it shall truthfully report such matters to the competent department of commerce of the State Council within 30 days.
These Rules require that the State shall establish a working mechanism composed of relevant central departments (「Working Mechanism」), to take charge of counteracting unjustified extra-territorial application of foreign legislation and other measures. Where the Working Mechanism, upon assessment, confirms that there exists unjustified extra-territorial application of foreign legislation and other measures, it may decide that the competent department of commerce of the State Council shall issue a prohibition order to the effect that, the relevant foreign legislation and other measures are not accepted, executed, or observed (「prohibition order」). The prohibition order may be suspended or withdrawn by decision of the Working Mechanism based on actual circumstances.
A citizen, legal person or other organization of China may apply to the competent department of commerce of the State Council for exemption from compliance with a prohibition order. Meanwhile, these Rules follow that where a person complies with the foreign legislation and other measures within the scope of a prohibition order, and thus infringes upon the legitimate rights and interests of a citizen, legal person or other organization of China, the latter may, in accordance with law, institute legal proceedings in a people’s court, and claim for compensation by the person.