China’s First Blocking Order Under The Counteracting Rules: What Are The Implications For Multinational Companies

On May 2, 2026, China’s Ministry of Commerce (“MOFCOM”) issued its first-ever blocking order (the “Blocking Order”) under the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures (the “Counteracting Rules”). The Blocking Order concerns U.S. sanctions imposed on five Chinese companies, in connection with alleged Iranian oil transactions.

The Blocking Order provides that the relevant U.S. sanctions measures — including SDN designation, asset freezes, and transaction prohibitions imposed on five Chinese companies pursuant to Executive Orders 13902 and 13846 — “shall not be recognized, enforced, or complied with”.

This marks the first formal application of the Counteracting Rules since their adoption in 2021 and represents an important development in China’s evolving legal framework addressing foreign extraterritorial measures.