On January 9, 2021, the Ministry of Commerce (MOFCOM) of the People’s Republic of China (PRC) issued Order No. 1 of the Rules of Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (the Rules).
Following our previous article published in January (China Adopts Rules to Counteract Extraterritorial Applications of Foreign Sanctions), we have a more detailed discussion about the political and economic context of the Rules, including Executive Order 13959 and the EU Blocking Statute. We analyze the specific provisions drafted by MOFCOM, including the requirements for Chinese citizens and companies to report the extraterritorial application of foreign law. In addition, we consider the potential compliance ramifications of the Rules on non-Chinese companies conducting business in China, including Chinese subsidiaries of US multinationals.