China’s anti-sanctions law Another setback for relationships

Status: 16.06.2021 10:30 a.m.

With the anti-sanctions law, China has created an instrument against foreign companies. Anyone who adheres to EU or US penalties against Beijing faces retribution. The industry is unsettled. From Steffen Wurzel, ARD studio Shanghai Many foreign business representatives see the new anti-sanctions law as a further setback for the relationship between Europe and China. As usual, the European Chamber of Commerce, the largest lobbying association of foreign companies in the People’s Republic, spoke up. The law continues to politicize dealings with China, so the criticism. “Basically, it ranges from uncertainty to shock,” said Chamber President Jörg Wuttke, describing the reactions of the member companies.

“Sovereignty inviolable”

With the new anti-sanctions law, the communist leadership in Beijing can punish foreign companies in the future; For example, if these sanctions follow, for example, the EU or the USA, which are directed against human rights violations in China. This could affect the textile industry, for example: If the EU should decide to sanction cotton companies from the Xinjiang region because there are strong indications of forced labor there, then China’s leadership could say the other way around to foreign textile and sporting goods manufacturers: You are only allowed to continue in China Do business if you specifically use Xinjiang cotton.

07/30/2020

“With this law, China shows that the sovereignty, the dignity, the core interests and the development interests of the People’s Republic are inviolable”, the constitutional lawyer Li Qingming of the State Chinese Academy for Social Studies defended the measure on the television channel CCTV. The state defends all of this. “We are resolutely opposed to the hegemonic striving and power politics of the West.”

Legal security for the government

Foreign observers in China criticized the fact that the law leaves much in the dark. The whole thing is “nebulous,” said a European diplomat ARD . It is clear, however, that the anti-sanctions law will not change much in the matter. Because the People’s Republic is not a constitutional state, and even without a legal basis, the communist leadership has repeatedly punished foreign companies and even entire states in the past. With the new law, however, the government can now deal with uncomfortable foreign actors in a supposedly legally secure manner.

March 22, 2021

“Text kept very vague”

The President of the European Chamber of Commerce, Wuttke, called the law a new “toolkit” for the government. “You can worry when you see the text. The text is – typically Chinese – very vague. So you could interpret everything into it,” he said. The draft law, which the members only saw as a finished law, includes very large circles. Even family members and subcontractors could be punished.

02.12.2020

The passing of the anti-sanctions law has created a lot of uncertainty among foreign companies in China. But there are also other voices. The head of a German middle class center in Kunshan near Shanghai said the ARD : Many German companies with which he has to do take note of such news calmly. According to the motto: The decisions of the state leadership in Beijing cannot be changed anyway.

They say the law’s wide scope of application could put foreign businesses in China in a big dilemma, as they could be caught between complying with foreign sanctions and the law. ban them from taking such measures. Chinese technology company Huawei. Photo of CPO MAGAZINE According to Article 12 of the law passed by the Standing Committee of the National People’s Congress on June 10, organizations and individuals that enforce or support foreign sanctions can be brought to court and forced to must “stop the violation and pay compensation”. Lester Ross, a partner at Beijing-based law firm WilmerHale, said he was concerned the new law would force regulators to “reduce companies’ discretion in determining whether they want to do business with them.” With whom”. “If so, this could have a big impact, especially for financial institutions,” he said. Businesses that may be at risk include multinational fashion brands that have announced they will not use cotton from Xinjiang after being banned by the US over human rights concerns, or suppliers to telecommunications giant Huawei, which has been hit by US export restrictions. Observers say the new law establishes a clear legal foundation for regulations issued by the Commerce Department last year. These include so-called untrusted legal entities lists, which identify foreign agencies deemed to pose a threat to China’s national security or interests and subject them to measures such as fines, economic restrictions and visa restrictions for employees. In January, the ministry also introduced a “blocking regulation” that forces Chinese organizations and individuals to report whether they have encountered any restrictions from foreign governments with the risk of fines if not, and allow them to claim. Tian Feilong, PSG at Beihang University’s law school, who has participated in consultations on the new law, said the blocking regulation has affected compliance with certain US sanctions. “In China, for example, Huawei can sue Taiwanese semiconductor giant TSMC for economic damages and seek compensation for the consequences,” Tian said. “Our court may rule that TSMC loses and Huawei will have a domestic legal channel to protect its interests. In this case, TSMC will have to decide whether to honor the sanctions. US sanctions or respect anti-sanctions laws in China,” he added. Tian said a leadership group would be set up to coordinate and enforce anti-sanctions measures, including representatives from the ministries of commerce and foreign affairs and the National Development and Reform Commission. “Simply put, foreign companies participating in sanctions against China will lose the Chinese market. Many companies need to weigh their pros and cons, whether to choose sides in the market. the Chinese market or the US and European markets, and between Chinese law and foreign law,” he said.