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.

Product of the 4th generation V-NAND memory chip of Samsung Electronics. Photo: Yonhap/VNA Specifically, Samsung – the world’s largest memory chip manufacturer and Hyundai – South Korea’s leading automobile manufacturing group have signed a cooperation agreement with the Institute of Automotive Technology and the Institute of Electronic Technology under the Ministry of Trade and Industry. Korea Trade, Industry and Energy (MOTIE) to strengthen cooperation in the automotive chip manufacturing industry. Details of the contract between Samsung and Hyundai were not disclosed. However, an unnamed government official said: “We do not rule out the possibility that Hyundai will receive automotive chips from Samsung.” South Korea boasts a world leader in memory chip production, but is relatively weak in the logic chip business. According to data from the Korea International Trade Association, the country accounts for only 2.3% of the automotive chip manufacturing market. Leading in this field are the US (31.4%), Japan (22.4%), and Germany (17.7%) respectively. Major Korean chipmakers such as Samsung and SK hynix Inc. focuses on manufacturing high-performance memory semiconductors because automotive chips are seen as less profitable, while requiring complex testing processes and strict quality requirements. Korean automakers are being hit hard by a global shortage of automotive chips, especially electronic control chips in cars, leading to production halts. output many times. The move comes as the Korean government aims to establish an automotive chip supply chain to solve the global shortage of semiconductors. The government plans to roll out tax incentives and subsidies worth a total of 510 trillion won ($453 billion) to semiconductor companies between now and 2030. The Korean government hopes that the agreement between Samsung and Hyundai can strengthen the country’s autonomy in the field of automotive chip production and enhance Korea’s competitiveness in the production of world cars. next generation in the future. While chipmakers will be at the forefront of research and development of core semiconductor technology, auto manufacturers will focus on providing platforms for testing new automotive chips and components. related department.