China Passes Law to Counter Foreign Sanctions
11 Jun 2021

China enacted a new law aimed at countering foreign sanctions, in response to U.S. and European efforts to pressure Beijing on issues spanning human rights, trade and technology.

Senior members of China’s legislature approved the “anti-foreign-sanctions law” on Thursday, state media said, following an expedited process that skipped public consultation and involved lawmakers reviewing the bill twice instead of the usual three times.

Chinese academics and state media have described the law as a timely addition to Beijing’s legal tool kit for resisting Western coercion, by establishing mechanisms for retaliating against foreign sanctions and mitigating their impact on Chinese entities and individuals.

The law mandates the Chinese government to apply countermeasures against foreign individuals and entities deemed to be pressuring China with “discriminatory restrictions.” The countermeasures include denying and revoking visas or expulsion, seizing and freezing assets within China, blocking transactions and cooperation with Chinese individuals and entities, as well as “other necessary measures” that weren’t specified.

Under the law, which took effect Thursday, Chinese entities and individuals can file lawsuits in Chinese courts to seek compensation for harm caused by foreign sanctions.

The U.S. and other Western governments have ramped up the use of economic and political sanctions against China in the past year or so over what they say are Beijing’s unfair industrial practices, its forced-assimilation campaign targeting Muslim Uyghurs in Xinjiang and the suppression of civil liberties in Hong Kong, among other issues.

Observers say the rapid passage of the new law was the culmination of Chinese leader Xi Jinping’s demands, issued in November, calling for speedier improvements to China’s legal framework for safeguarding its sovereignty, security and interests in dealings with foreign parties.

While the law had been months in the making, state media only disclosed the existence of a draft on Monday, saying the bill was ready for its second reading and final passage this week by the standing committee of the National People’s Congress. Senior lawmakers had reviewed the bill for the first time in April, but this reading wasn’t announced at the time.

Foreign business executives voiced concern over what they see as unusual secrecy. “European companies in China are alarmed by the lack of transparency in this process—the first reading was never announced, and there is no draft to examine,” Joerg Wuttke, president of the European Union Chamber of Commerce in China, said before the law was passed.

“Such action is not conducive to attracting foreign investment or reassuring companies that increasingly feel that they will be used as sacrificial pawns in a game of political chess,” Mr. Wuttke said.

The new law empowers Beijing to apply its retaliatory measures beyond the specific individuals and entities deemed to be pressuring China. For instance, countermeasures can be used against a targeted individual’s spouse and direct family members, as well as organizations that the individual controls or manages. Senior personnel at targeted entities can also be subjected to Chinese measures.

Under the law, any individual or entity that fails to implement or conform with China’s counter-sanction measures would face unspecified legal repercussions.

By Chun Han Wong, The Wall Street Journal, 10 June 2021

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