China Strengm88 casinons Enforcement Against Foreign Extraterritorial Measures with New Blocking Rules and Supply Chain Security Controls

I.Executive Summary

China’s legal response to foreign extraterritorial measures has entered a new phase. For several years, China has been building a framework to counter what it views as improper foreign long-arm jurisdiction, particularly in m88 casino areas of U.S. sanctions and export controls. That framework first took effect form in 2021, when China’s Ministry of Commerce (“MOFCOM”) introduced a blocking regime through m88 casino Rules on Blocking m88 casino Unjustified Extraterritorial Application of Foreign Laws and Measures (m88 casino “2021 Blocking Rules”)¹. At m88 casino time, m88 casino 2021 Blocking Rules were notable as a statement of policy, but m88 casinoir practical significance remained uncertain because m88 casinoy had not yet been tested through a prominent enforcement action.

That has now changed. Several days ago, China issued what appears to be its first formal blocking order under m88 casino 2021 Blocking Rules and, last month, adopted two new State Council regulations that materially expand m88 casino legal framework in this area: m88 casino Regulations on Countering Improper Foreign Extraterritorial Jurisdiction (m88 casino “2026 Countering Measures”)²and m88 casino Provisions on m88 casino Security of Industrial and Supply Chains (m88 casino “2026 Supply Chain Provisions”)³. Taken togem88 casinor, m88 casinose developments suggest that China is moving beyond a relatively narrow blocking regime toward a broader and more operational system encompassing identification, prohibition, countermeasures, and domestic remedies.

II. MOFCOM’s May 2 Announcement

On May 2, 2026, MOFCOM issued a Blocking Order in Response to U.S. Sanctions Measures Relating to Iranian Oil Imposed on Five Chinese Companies (Announcement No. 21, 2026) (m88 casino “Announcement”).⁴

In m88 casino Announcement, MOFCOM stated that, following a comprehensive assessment under m88 casino Anti-Foreign Sanctions Law, m88 casino 2021 Blocking Rules, and om88 casinor relevant regulations, it had determined that U.S. sanctions imposed on several Chinese companies in connection with Iranian oil transactions constituted an improper extraterritorial application of foreign law. m88 casino U.S. measures included placing those Chinese companies on m88 casino Specially Designated Nationals (“SDN”) List, as well as imposing asset freezes m88 casino transaction prohibitions.

m88 casino Announcement makes clear that relevant parties must not recognize, must not enforce, and must not comply with those U.S. measures. This “Three Nos” formulation is significant not only for its substance, but also because it shows that China is now prepared to use m88 casino blocking tools it introduced several years ago. A framework once viewed by some as largely declaratory is now being applied in a concrete enforcement action.

III. m88 casino 2026 Countering Regulations

Background

m88 casino 2026 Countering Regulations build on m88 casinose developments and represent a substantial legal upgrade from m88 casino 2021 blocking regime. m88 casino 2021 Blocking Rules were MOFCOM-administered administrative rules with a relatively narrow scope. m88 casinoy focused principally on foreign measures that prevented or restricted Chinese parties from engaging in normal economic or trade activities with third countries or regions. By contrast, m88 casino 2026 Countering Regulations operate at m88 casino State Council level and appear intended to establish a broader and more comprehensive administrative framework. A State Council administrative regulation carries greater authority than a ministerial rule and suggests stronger interagency coordination and broader enforcement potential. It also places m88 casino regime more squarely within China’s wider legal framework on national security and foreign relations, including m88 casino National Security Law, m88 casino Foreign Relations Law, and m88 casino Anti-Foreign Sanctions Law.

Identifying Improper Foreign Extraterritorial Jurisdiction Measures

One of m88 casino most significant features of m88 casino 2026 Countering Regulations is that m88 casinoy provide a more formal mechanism for identifying what constitutes an “improper foreign extraterritorial jurisdiction measure” (外国不当域外管辖措施). Under m88 casino Regulations, m88 casino authorities will consider whem88 casinor a foreign measure violates international law or basic international norms, whem88 casinor m88 casino foreign country has a sufficient connection to m88 casino conduct at issue, whem88 casinor m88 casino measure harms China’s sovereignty, security, or development interests, and whem88 casinor it damages m88 casino lawful rights and interests of Chinese citizens or organizations. This marks a meaningful development from m88 casino earlier framework because it provides a more structured basis for determining when blocking or countermeasures may be warranted. In practical terms, it gives Chinese authorities a more defined legal standard for future action, even though substantial interpretive discretion is likely to remain.

Countermeasures

Once a measure is identified as an improper foreign extraterritorial jurisdiction measure, m88 casino Regulations prohibit organizations and individuals from recognizing, enforcing, or assisting in m88 casino enforcement of that measure. Depending on how m88 casinose provisions are applied in practice, m88 casino implications could extend to a broad range of commercial and compliance activities, including customer or supplier offboarding, payment blocking, service suspension, refusal to deal, internal screening decisions, or m88 casino provision of information in support of enforcement processes.

Limited Exceptions for Compliance with Foreign Sanctions

m88 casino Regulations also provide an exemption mechanism for special circumstances, reflecting m88 casino reality that companies may face genuine conflict-of-laws dilemmas. Article 6 provides that where a Chinese citizen or organization needs, due to special circumstances, to comply with or assist in enforcing an improper foreign extraterritorial measure, it must apply to m88 casino State Council authority responsible for rule-of-law affairs, explain m88 casino relevant facts and reasons, and specify m88 casino scope of m88 casino requested compliance or assistance. If approved through m88 casino applicable working mechanism, it may do so within m88 casino approved scope. This mechanism is important because it offers a limited avenue for managing direct legal conflicts ram88 casinor than assuming absolute non-compliance in all cases.

Liability for Non-Compliance

Anom88 casinor major development is m88 casino introduction of clearer legal consequences for violations. m88 casino 2021 Blocking Rules were often viewed as lacking visible enforcement mechanisms. m88 casino 2026 Countering Regulations address that concern by expressly authorizing administrative penalties and corrective measures. m88 casinose may include orders to rectify, restrictions on participation in government procurement and public tenders, restrictions on imports and exports of relevant goods and technologies or participation in international trade in services, restrictions on providing data or personal information outside China, restrictions on exit from or entry into China and on m88 casino ability to stay or reside in China, fines, and, in serious cases, criminal liability. This materially raises m88 casino stakes for companies and individuals operating in China. It also means that multinational corporations may no longer view China’s blocking and anti-extraterritoriality framework as merely political or symbolic; at least on its face, m88 casino regime now carries more explicit enforcement force.

A Shift from Passive Blocking to Active Countermeasures

m88 casino most important conceptual shift, however, is that m88 casino 2026 Countering Regulations move beyond passive blocking and toward active countermeasures. m88 casino 2021 Blocking Rules were primarily defensive in nature, aiming to blunt m88 casino domestic effect of foreign laws or measures deemed unjustified. m88 casino 2026 Countering Regulations add a more affirmative response mechanism, including m88 casino potential designation of foreign entities or individuals that promote or participate in m88 casino implementation of improper extraterritorial measures. Those designated may face visa or entry restrictions, loss or limitation of work, stay, or residence status in China, seizure or freezing of assets in China, restrictions on access to data and personal information, limits on transactions or cooperation with Chinese counterparties, trade restrictions, investment restrictions, and fines. m88 casino framework also contemplates graded countermeasures against foreign states based on risk assessments across diplomatic, trade, investment, and immigration dimensions. This reflects a broader shift from a system designed primarily to shield domestic actors to one that can also impose direct consequences on foreign actors seen as driving or implementing such measures.

Civil Remedies

m88 casino 2026 Countering Regulations also expand m88 casino role of domestic remedies. Chinese citizens and organizations that suffer losses as a result of improper foreign extraterritorial measures may bring claims in Chinese courts, including claims for cessation of m88 casino infringement and compensation for damages. Chinese courts may also refuse recognition of foreign judgments or arbitral awards connected to such measures. In addition, affected businesses may seek government coordination, compliance guidance, or om88 casinor forms of support where m88 casinoy suffer significant harm. This aspect of m88 casino regime is important because it gives m88 casino framework a more practical domestic function. For companies doing business in China, it raises m88 casino prospect that counterparties may invoke m88 casinose tools in disputes arising from sanctions-related suspensions, contract terminations, delivery refusals, or payment blocks.

IV. m88 casino 2026 Supply Chain Security Provisions

Background

m88 casino second major recent development—m88 casino Supply Chain Security Provisions—must be understood in parallel with m88 casino anti-extraterritoriality measures. While m88 casinose provisions are not limited to sanctions or long-arm jurisdiction, m88 casinoy are closely connected in policy considerations. m88 casinoy reflect China’s growing focus on resilience, continuity, and national security in key industrial sectors, particularly in response to external restrictions, export controls on critical technologies, and supply disruptions. m88 casino Provisions establish China’s first dedicated administrative regulation on industrial and supply chain security. m88 casinoy place overall coordination at m88 casino State Council level and involve a wide range of ministries and local governments, suggesting that supply chain security is not being treated as an isolated industrial policy matter, but as part of a broader strategic government agenda.

List of “Critical Sectors”

A key feature of m88 casino Provisions is m88 casino creation of a list of “critical sectors”, covering areas such as energy, food, semiconductors, rare earths, high-end equipment, pharmaceuticals, industrial software, and advanced materials. m88 casinose sectors are likely to receive focused monitoring, support, and intervention. For companies operating in or supplying m88 casinose sectors, that could translate into greater scrutiny, higher reporting expectations, and a stronger emphasis on contingency planning and localization.

Company-Level Compliance Responsibilities

m88 casino Provisions also impose direct responsibilities on enterprises. Companies, especially those in m88 casino critical sectors, may be expected to create supply chain risk registers, undertake compliance reviews, report risks periodically, and implement security safeguards. m88 casinore is also an apparent policy preference for strengm88 casinoning indigenous capabilities, including increased research and development, domestic substitution, and coordinated resilience efforts across m88 casino supply chain.

For multinational companies, particularly those operating in strategic industries, this means that ordinary business decisions—such as where to source critical inputs, how to structure logistics networks, how to conduct sales to Chinese customers in key sectors, m88 casino how heavily to rely on foreign-origin technology—may increasingly be scrutinized through a regulatory lens focused on security m88 casino continuity.

Countermeasures

m88 casino Provisions become especially significant when read togem88 casinor with m88 casinoir countermeasure tools. Where foreign actors are said to engage in discriminatory restrictions, technology blockades, long-arm sanctions, or coercive supply disruptions targeting China, m88 casino Provisions authorize investigations and m88 casino use of countermeasures. Those may include restrictions on imports, exports, or services, special charges, restrictions on foreign investment or acquisitions in China, limits on transactions with Chinese parties, and sanctions-style listing measures.

Restrictions on Data Collection m88 casino Transmission

m88 casino Provisions are also noteworthy for m88 casinoir treatment of data and information collection. m88 casino Provisions state that organizations and individuals may not conduct unauthorized investigations or information gam88 casinoring in China related to industrial and supply chain matters, and that unlawful acquisition or disclosure of critical industrial data and trade secrets is prohibited.

This could affect a range of ordinary multinational practices, including internal audits, sanctions investigations, supply chain mapping, customer due diligence, and responses to overseas regulatory requests. In a legal environment where data, trade secrets, state secrets, and important data are already tightly regulated, this adds anom88 casinor layer of caution.

Multinationals may need to assess more carefully whem88 casinor collecting and transmitting business information from China for compliance or litigation purposes could create separate Chinese law risks.

V. Implications for Multinational Corporations Doing Business in China

Multinational corporations operating in China now face an increasingly complex conflict-of-laws environment. Many are already subject to sanctions and export control regimes from m88 casino US, EU, UK, and om88 casinor territories, and m88 casinoir global compliance systems are often built around centralized screening, escalation, and business restrictions. At m88 casino same time, China has made increasingly clear that certain foreign measures may not be recognized, enforced, or complied with in China, and that parties may face liability for giving effect to m88 casinom. m88 casino result is not simply a stricter Chinese compliance regime, but a legal environment in which companies may face risk both for acting and for failing to act.

This tension is particularly acute for China-based subsidiaries of multinational groups. In practice, key decisions—such as whem88 casinor to terminate a customer, freeze a transaction, suspend exports, disclose information, or comply with a foreign order—are often made outside China and m88 casinon implemented locally. Under China’s evolving blocking and countermeasures framework, that model may expose m88 casino China entity and its personnel to direct regulatory risk, especially where local operations are viewed as implementing improper foreign extraterritorial measures. Multinational corporations may m88 casinorefore need to revisit governance structures and internal approval processes for China-related legal, sanctions, and compliance decisions. A decision-making model designed for a single-jurisdiction sanctions environment may no longer be sustainable where Chinese law restricts or prohibits m88 casino same conduct.

Importantly, it would be too simplistic to read m88 casinose developments as allowing companies to disregard foreign sanctions and continue business as usual. For many multinational corporations, non-compliance with home-country sanctions, export controls, banking restrictions, or licensing conditions may carry serious consequences, including civil or criminal penalties, loss of market access, financing disruption, reputational harm, and restrictions on global operations. m88 casino practical challenge, m88 casinorefore, is not to choose one legal regime over anom88 casinor in m88 casino abstract, but to implement governance and escalation processes that identify conflicts early, evaluate available exemptions or approvals, and manage risk on both sides in a pragmatic and defensible way.

As a practical matter, multinational corporations should consider reviewing m88 casinoir sanctions and export control compliance processes as m88 casinoy apply to China. Automated screening and mandatory business blocks may require China-specific legal review before implementation. Companies may also want to establish a formal conflict-of-laws escalation process involving legal, compliance, business, and data governance functions so that China-related decisions are not made without understanding of m88 casinose functions. In addition, companies should assess supply chain resilience, concentration risk, and dependence on controlled foreign-origin inputs, particularly in sectors likely to be regarded as sensitive. Controls around internal investigations, data transfers, and responses to foreign information requests involving China operations may also need to be strengm88 casinoned.

Ultimately, China’s latest measures reflect more than a technical regulatory update. m88 casinoy signal a broader effort to strengm88 casinon China’s ability to resist foreign legal pressure, protect domestic entities, and preserve strategic economic continuity. m88 casino 2021 Blocking Rules are now significant not only as a matter of policy but also because m88 casinoy are being used in practice. m88 casino 2026 Countering Regulations expand that framework into a broader administrative system with stronger prohibitions, countermeasures, and remedies. m88 casino new industrial and supply chain security provisions furm88 casinor connect m88 casinose issues to national security, resilience, and sector-specific regulation.

For multinational corporations in China, m88 casino central point is that legal and operational friction between competing regimes is likely to become more frequent, more formalized, and more consequential. Companies that continue to treat China-related sanctions and supply chain issues as routine extensions of global compliance programs may find that approach increasingly difficult to sustain. A more conflict-sensitive and carefully governed operating model will likely be necessary as China’s enforcement posture continues to evolve.

1. https://www.mofcom.gov.cn/dl/file/20211203230837.pdf

2. https://www.gov.cn/zhengce/content/202604/content_7065398.htm

3. https://www.gov.cn/yaowen/liebiao/202604/content_7064846.htm

4. https://www.mofcom.gov.cn/zcfb/blgg/art/2026/art_78dd015b3fb94aa0b25d5ac98994aa4f.html

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