
On June 10, 2021, the People’s Republic of China (PRC) enacted the Anti-Foreign Sanctions Law (AFSL), a sweeping piece of legislation aimed at countering foreign sanctions with proactive measures and retaliatory actions. The law aims to protect China’s sovereignty, security, and economic development. The AFSL shows China’s intent to defend its national interest and was introduced in response to 2018 tariffs imposed against Chinese officials and organizations by President Donald Trump, along with joint sanctions by the United States, the United Kingdom, Canada, and European Union over alleged human rights abuses. As global trade policies targeting China become increasingly stringent, businesses operating in or with China must carefully assess the potential impact of the AFSL.
The AFSL allows Chinese authorities to penalize individuals and organizations involved in foreign actions deemed discriminatory against Chinese entities or as interference in domestic affairs. Under Articles 3 and 4 of the AFSL, these measures may extend to any person or entity involved in creating or implementing foreign sanctions targeting Chinese citizens or interfering in China’s domestic affairs. This includes adding them to a countermeasures list, effectively a government-maintained blacklist. Article 5 of the law expands the scope even further. Immediate family members of individuals placed on the countermeasures list can also be added, along with organizations affiliated with those individuals and senior figures within those organizations. These decisions are made at the discretion of relevant departments within China’s State Council.
Once placed on the countermeasures list, individuals and entities face significant restrictions. They can be denied visas, deported, or barred from entering China. Financial transactions with Chinese institutions may be prohibited, collaborations with Chinese businesses curtailed, and assets frozen. The law also allows for additional unspecified measures.
In addition, the AFSL prohibits compliance with foreign sanctions targeting China. It empowers Chinese entities harmed by foreign sanctions the right to sue for compensation. Articles 13 and 15 grant further authority for the imposition of countermeasures against foreign countries, organizations, and individuals, particularly those seen as threatening China’s sovereignty, security, or developmental priorities.
Implications for Global Business
The enactment of AFSL poses considerable risks for businesses and individuals with ties to China. As political tensions persist, the law adds a lawyer of uncertainty that could complicate decision-making for foreign investors, exporters, and multinational companies. Entities that directly or indirectly engage in actions perceived as hostile to Chinese interests could face severe legal and financial consequences.
For companies navigating an already complex regulatory environment, the ASFL shows the importance of assessing exposure to Chinese countermeasures and developing proactive compliance strategies. For further insight into the evolving landscape of U.S.-China relations and its impact on global trade, be sure to read our article on U.S.-China Export Controls in 2025: What to Expect After Trump’s Return.
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