China’s parliament on Thursday launched a law aimed at countering sanctions imposed by foreign governments against Chinese officials and companies, escalating their legal battles with the United States and the EU.
The law was passed in secret by the standing committee of the National People’s Congress after two readings, rather than the usual three, and integrated. measures first unveiled by China’s trade minister in January. The “blockade statutes” of January have banned Chinese companies and individuals from respecting foreign government sanctions aimed at China.
“These moves signal a new escalation of the legal war between China and the United States,” said Angela Zhang, director of the Chinese Law Center at the University of Hong Kong.
Last week, President Joe Biden updated the rules of the Trump era prohibits Americans from investing in dozens of Chinese companies. Biden is in the UK for a G7 summit, where he hopes American allied rallies against the challenges posed by China and Russia.
“The fact that the law was pushed into it last week [Biden administration] The announcement of changes to the security trade ban is in line with China’s recent model of making reciprocal sanctions announcements in response to foreign measures, ”said Nick Turner, a lawyer for Steptoe & Johnson in Hong Kong.
The Trump administration had also threatened to impose sanctions on companies provides financial services Chinese officials said they were responsible for Beijing’s crackdowns on Hong Kong pro-democracy movement and Muslim Uighurs in the northwestern region of Xinjiang in China.
Later, Carrie Lam, chief executive of Hong Kong, complained that the territory’s banks would not deal with her, leaving her blocked with “Piles of money” in his government residence.
According to a draft of the new Chinese law, which was released only after its passage, Beijing may target individuals and organizations involved in the implementation of foreign sanctions with countermeasures including seizure of assets, potentially putting operations in jeopardy. of foreign investors in China in a difficult situation.
“Are you [the commerce ministry] issue a restraining order under this law, then it would be illegal in China for a subsidiary of a U.S. bank or any company to comply with U.S. sanctions, ”Turner said.
Beijing has not yet targeted foreign investors under the trade minister’s countermeasures announced in January. He also did not designate any multinational corporations as “unreliable entities” – a threat he posed for the first time two years ago if they had done something that undermined China’s national interests, such as the sale of equipment. military in Taiwan.
“These regulatory instruments were adopted with the primary goal of dissuading the U.S. government instead of actually penalizing foreign companies,” Zhang said. “It would be costly for China to take such countermeasures as they do. . . would lead to more decoupling [from the US], which is not in China’s interest ”.
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