New Blocking Rules By China's MOFCOM Create New Risks For Chinese And Foreign Companies

China's new Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (《阻断外国法律与措施不当域外适用办法》) (the “Rules”) create a new framework to mitigate the impact of foreign legal measures, including economic sanctions and information requests, on Chinese economic and security interests. They are the latest among a series of regulations—including legislation promulgated in 2019 and 2020 restricting assistance with foreign criminal and civil proceedings and China's new sanctions and export controls regimes promulgated in October and November 2020 (see our prior client alert)—all aimed at counteracting extraterritorial actions by foreign governments, particularly in light of the past six months of aggressive actions toward China under the Trump Administration. Both Chinese companies and foreign companies with operations in China need to consider the implications of the Rules in light of the recent spate of U.S. sanctions, export