China's NCP Standing Committee Adopts Countermeasures to the US Two Thrust China Strategy: The Text of the "Anti-Foreign Sanctions Law of the People's Republic of China" [中华人民共和国反外国制裁法]

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I have been considering what may be the emergence of an American Two Thrust China Strategy representing a set of measures designed to confront the challenge tat China now appears to pose for the United States. That, at any rate, has been the metamorphosis of a relationship that over the last twenty years has moved from (1) one of aggressive efforts at integration at every level (with the hope of greater Chinese alignment with the consensus view of liberal democratic sensibilities), to (2) a wariness producing efforts to develop substantially powerful trade and socio-cultural systems around China the risks of which might induce Chinese authorities to negotiate their way into a majority consensus normative framework for trade and governance (epitomized at the end by the Trans Pacific Partnership), to (3) a more aggressively competitive relationship which started with trade disputes and ending with the start of substantial movements toward decoupling in the economic, social, and political spheres under the Trump Administration's America First strategies, and (4) now to the Biden Administration's Two Thrust China Strategy, which retains the general wariness of Chinese -US integration, favors decoupling, and uses a combination of multilateralism in the public and private sectors along with legislation designed to insulate the US economy and its financial sector from identified adverse interests (here, here, and here).

This slow motion change in the strategic approach of the United States to its engagement with China would naturally produce some notice among Chinese central authorities. Beyond the increasingly blunt criticism of the application of the American Two Thrust Strategy in ways that have transformed these US actions from irritations to potential threats to Chinese economic planning and outbound strategies, China has now adopted the first of what might be a number of countermeasures. These countermeasures are legislative, but also delegate broad powers to the State Council to adopt flexible counter strategies against what are determined to be actions that threaten Chinese interests or sovereignty.

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The legislation, the "Anti-Foreign Sanctions Law of the People's Republic of China" [中华人民共和国反外国制裁法] was adopted at the 29th meeting of the Standing Committee of the 13th National People's Congress on June 10, 2021 "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." (China Passes Law to Counter Foreign Sanctions).

The bill underwent a secret first review in April and no draft was available for companies and other stakeholders to examine. But while the contents remain under wraps, experts have warned the impact could be significant. The law may be a "game-changer as it would provide a mechanism for targeted Chinese entities to file a lawsuit against a foreign company that is complying with foreign-imposed sanctions," A2 Global Risk said in a statement before the law was passed. "For those foreign companies, passage of the law will incur additional compliance and regulatory obligations and risks." (China hits back at US and allies with anti-sanctions law)

The retaliatory nature of the measure was made clear in reporting from China's official press sources.

For some time, out of political manipulation needs and ideological bias, some Western countries have used Xinjiang and Hong Kong-related issues as part of their pretexts to spread rumors on and smear, contain and suppress China, according to spokesperson office of the Legislative Affairs Commission of the NPC Standing Committee. In particular, the countries, in violation of international law and the basic norms governing international relations, have imposed so-called sanctions on relevant Chinese state organs, organizations and functionaries in accordance with their domestic laws, grossly interfering in China's internal affairs. The Chinese government has strongly condemned such hegemonistic acts, and people from all walks of life have expressed strong indignation, said the office.

In order to resolutely safeguard national sovereignty, dignity and core interests and oppose Western hegemonism and power politics, the Chinese government has launched multiple corresponding countermeasures against entities and individuals of relevant countries since the beginning of 2021, according to the office. It's paying them back in their own coin, said the office. (Draft law against foreign sanctions submitted to China's top legislature for 2nd reading)

Note the fundamentally reactive nature of the countermeasures and their focus on the ideological contests at the root of the US-China relationship, and the political use of Chinese policy in Xinjiang and Hong Kong to undermine Chinese policies and their political-economic model. Note as well the emphasis on a Chinese reading of international law, and its right to project its authority extraterritorially in the service of international law, something that has become quite fashionable especially among European states, though indirectly through their enterprises and investment funds. Countermeasures may be flexibly applied through departments of the State Council.

The framework of the "Anti-Foreign Sanctions Law of the People's Republic of China"is quite straightforward. Article 3 broadly describes measures taken by foreigners which would trigger countermeasures. Article 4 vests the State Council with discretionary authority to "y decide to include individuals and organizations that directly or indirectly participate in the formulation, decision, and implementation of the discriminatory restrictive measures stipulated in Article 3." Article 5 broadens the list of individuals and organizations connected to primary violators, who may also be included on countermeasures lists. Article 6 describes the measures that may be taken against people and institutions on the list. These include the open ended "Other necessary measures [其他必要措施。]" (Article 6(4). Article 11 extends the application of the measures to individuals and entities operating within Chinese territory, presumably foreign operations in China. Interesting as well is Article 14 which indicates that any "organization or individual who fails to implement or cooperate with the implementation of countermeasures shall be investigated for legal responsibility in accordance with the law." It is unclear the extent to which this provision will have extraterritorial effect (consider a U.S. antitrust analogue in the Foreign Trade Antitrust Improvements Act (nicely discussed HERE)). At its broadest it may give China authority to reach conduct occurring outside of China with internal effects described in the triggering provisions of Articles 2 and 3.

Left unanswered are a number of questions. The Act vests the State Council with coordination authority but suggests substantial delegation of the issuance and enforcement of countermeasures. It is not clear how the countermeasures list will align with or be incorporated into the systems of social credit rewards and punishments and their related black and red lists. The question remains open whether the "Anti-Foreign Sanctions Law" also applies to Chinese operations, including that of its State Owned Enterprises in Belt and Road Initiative states, or even whether effects on Chinese companies within Belt & Road partners will be sufficient to trigger countermeasures under the scope rules of Articles 2-4. The thrust of the measures, however, are likely to amplify that of US policy more than countering them. It builds in enhanced incentives to decoupling, and for the reconstruction of trade relationships indirectly through trade membranes--a host of companies and arrangements that operate in third party or neutral states where US Chinese trade might take place more efficiently but only through gateways in the trade borders being built by these reciprocal measures.

The text of the Anti-Foreign Sanctions Law is worth reading in its own right. The risks for business are substantial enough that it warrants careful study. It follows below in the original and in a crude English translation. For a far more elegant translation, please see the wonderful job done by the people at China Law Translate HERE. A defense of the measures 郭 言：反制“单边制裁”的精准重拳 [Guo Yan: A precise punch against "unilateral sanctions"] (in Chinese) may be accessed HERE.

 

中华人民共和国反外国制裁法 

 

（2021年6月10日第十三届全国人民代表大会常务委员会第二十九次会议通过）
来源： 中国人大网 浏览字号： 大 中 小 2021年06月10日 20:01:42


第一条　为了维护国家主权、安全、发展利益，保护我国公民、组织的合法权益，根据宪法，制定本法。

第二条　中华人民共和国坚持独立自主的和平外交政策，坚持互相尊重主权和领土完整、互不侵犯、互不干涉内政、平等互利、和平共处的五项原则，维护以联合国为核心的国际体系和以国际法为基础的国际秩序，发展同世界各国的友好合作，推动构建人类命运共同体。

第三条　中华人民共和国反对霸权主义和强权政治，反对任何国家以任何借口、任何方式干涉中国内政。

外国国家违反国际法和国际关系基本准则，以各种借口或者依据其本国法律对我国进行遏制、打压，对我国公民、组织采取歧视性限制措施，干涉我国内政的，我国有权采取相应反制措施。

第四条　国务院有关部门可以决定将直接或者间接参与制定、决定、实施本法第三条规定的歧视性限制措施的个人、组织列入反制清单。

第五条　除根据本法第四条规定列入反制清单的个人、组织以外，国务院有关部门还可以决定对下列个人、组织采取反制措施：

（一）列入反制清单个人的配偶和直系亲属；

（二）列入反制清单组织的高级管理人员或者实际控制人；

（三）由列入反制清单个人担任高级管理人员的组织；

（四）由列入反制清单个人和组织实际控制或者参与设立、运营的组织。

第六条　国务院有关部门可以按照各自职责和任务分工，对本法第四条、第五条规定的个人、组织，根据实际情况决定采取下列一种或者几种措施：

（一）不予签发签证、不准入境、注销签证或者驱逐出境；

（二）查封、扣押、冻结在我国境内的动产、不动产和其他各类财产；

（三）禁止或者限制我国境内的组织、个人与其进行有关交易、合作等活动；

（四）其他必要措施。

第七条　国务院有关部门依据本法第四条至第六条规定作出的决定为最终决定。

第八条　采取反制措施所依据的情形发生变化的，国务院有关部门可以暂停、变更或者取消有关反制措施。

第九条　反制清单和反制措施的确定、暂停、变更或者取消，由外交部或者国务院其他有关部门发布命令予以公布。

第十条　国家设立反外国制裁工作协调机制，负责统筹协调相关工作。

国务院有关部门应当加强协同配合和信息共享，按照各自职责和任务分工确定和实施有关反制措施。

第十一条　我国境内的组织和个人应当执行国务院有关部门采取的反制措施。

对违反前款规定的组织和个人，国务院有关部门依法予以处理，限制或者禁止其从事相关活动。

第十二条　任何组织和个人均不得执行或者协助执行外国国家对我国公民、组织采取的歧视性限制措施。

组织和个人违反前款规定，侵害我国公民、组织合法权益的，我国公民、组织可以依法向人民法院提起诉讼，要求其停止侵害、赔偿损失。

第十三条　对于危害我国主权、安全、发展利益的行为，除本法规定外，有关法律、行政法规、部门规章可以规定采取其他必要的反制措施。

第十四条　任何组织和个人不执行、不配合实施反制措施的，依法追究法律责任。

第十五条　对于外国国家、组织或者个人实施、协助、支持危害我国主权、安全、发展利益的行为，需要采取必要反制措施的，参照本法有关规定执行。

第十六条　本法自公布之日起施行。

 Anti-Foreign Sanctions Law of the People's Republic of China
(Adopted at the 29th meeting of the Standing Committee of the 13th National People's Congress on June 10, 2021)

Source: China National People's Congress.com Font Size: Big Middle Small June 10, 2021 20:01:42

Article 1: In order to safeguard national sovereignty, security, and development interests, and to protect the legitimate rights and interests of citizens and organizations of our country, this law is formulated in accordance with the Constitution.

Article 2 The People’s Republic of China adheres to an independent foreign policy of peace, adheres to the five principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. The international order based on international law develops friendly cooperation with countries around the world and promotes the building of a community with a shared future for mankind.

Article 3: The People's Republic of China opposes hegemonism and power politics, and opposes any country's interference in China's internal affairs under any pretext and in any way.

If a foreign country violates international law and basic norms of international relations, uses various excuses or in accordance with its own laws to contain and suppress my country, adopt discriminatory restrictive measures against Chinese citizens and organizations, and interfere in my country's internal affairs, my country has the right to take corresponding countermeasures .

Article 4: Relevant departments of the State Council may decide to include individuals and organizations that directly or indirectly participate in the formulation, decision, and implementation of the discriminatory restrictive measures stipulated in Article 3 of this law on the counter-control list.

Article 5: In addition to the individuals and organizations listed in the countermeasure list in accordance with Article 4 of this Law, the relevant departments of the State Council may also decide to take countermeasures against the following individuals and organizations:

(1) The spouses and immediate family members of individuals included in the counter-control list;

(2) Senior managers or actual controllers of organizations included in the counter-control list;

(3) Organizations where individuals included in the counter-control list serve as senior management personnel;

(4) Organizations that are actually controlled or participated in the establishment and operation of individuals and organizations included in the counter-control list.

Article 6: Relevant departments of the State Council may, in accordance with their respective responsibilities and tasks, decide to take one or more of the following measures for individuals and organizations specified in Articles 4 and 5 of this Law based on actual conditions:

(1) Refusal to issue visas, deny entry, visa cancellation or deportation;

(2) Sealing up, seizing, and freezing movable property, immovable property and other various types of property within the territory of my country;

(3) Prohibit or restrict relevant transactions, cooperation and other activities with organizations and individuals within the territory of my country;

(4) Other necessary measures.

Article 7: The decision made by the relevant departments of the State Council in accordance with the provisions of Articles 4 to 6 of this Law shall be final.

Article 8: If the circumstances on which countermeasures are taken change, the relevant departments of the State Council may suspend, modify or cancel the countermeasures.

Article 9: The confirmation, suspension, modification or cancellation of the countermeasures list and countermeasures shall be announced by the Ministry of Foreign Affairs or other relevant departments of the State Council by issuing an order.

Article 10: The state establishes a coordination mechanism for anti-foreign sanctions work and is responsible for overall planning and coordination of related work.

The relevant departments of the State Council shall strengthen coordination and information sharing, and determine and implement relevant countermeasures in accordance with their respective responsibilities and tasks.

Article 11: Organizations and individuals within the territory of our country shall implement countermeasures adopted by relevant departments of the State Council.

For organizations and individuals that violate the provisions of the preceding paragraph, the relevant departments of the State Council shall deal with them in accordance with the law and restrict or prohibit them from engaging in related activities.

Article 12: No organization or individual may implement or assist in the implementation of discriminatory restrictive measures taken by foreign countries against Chinese citizens and organizations.

Where organizations and individuals violate the provisions of the preceding paragraph and infringe upon the lawful rights and interests of Chinese citizens and organizations, Chinese citizens and organizations may file a lawsuit with the people’s court in accordance with the law, requesting them to stop the infringement and compensate for the losses.

Article 13: In addition to the provisions of this law, relevant laws, administrative regulations, and departmental rules may provide for the adoption of other necessary countermeasures for acts that endanger my country's sovereignty, security, and development interests.

Article 14: Any organization or individual who fails to implement or cooperate with the implementation of countermeasures shall be investigated for legal responsibility in accordance with the law.

Article 15: For foreign countries, organizations, or individuals that implement, assist, or support acts that endanger my country's sovereignty, security, and development interests, and need to take necessary countermeasures, refer to the relevant provisions of this law.

Article 16: This law shall come into force on the date of promulgation.