mofcom blocking rules

MOFCOM’s new Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (“Blocking Rules”) (MOFCOM Ord. In implementing the Anti-Foreign Sanctions Law, MOFCOM examines the justifiability of the international sanctions before … China Issues Blocking Rules. But opting out of some of these cookies may have an effect on your browsing experience. [10]   Chinese Blocking Statute (Article 9). Kelly Austin – Hong Kong (+852 2214 3788, kaustin@gibsondunn.com) 4 See our summary here. Steve Melrose – London (+44 (0)20 7071 4219, smelrose@gibsondunn.com) China Issues Rules to Counteract “Unjustified” Extraterritorial Application of Foreign Measures January 12, 2021, Covington Alert. On January 9, 2021, China's Ministry of Commerce (MOFCOM) issued Order No. The Blocking Rules are formulated pursuant to the PRC National Security Law and other relevant laws. unjustified extra-territorial application, in China and to Chinese persons and entities, of certain foreign legislation and measures. Following a wave of Western sanctions against China, on 9 th January 2021 MOFCOM released its Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Laws and Other Measures.. January 14, 2021. China’s Ministry of Commerce (Mofcom) was established in March 2003 and is responsible for trade negotiations and the relationship with the World Trade Organization (WTO). Found inside – Page 153Statistics provided by the MOFCOM note that, by 2013, China's OFDI stock ... to block an SOE from entering into the market if the SOE relies on the rule of ... Found inside – Page 5-20... future.101 Competition Policy/Anti-Monopoly Law Another area that is seen as ... (Coca-Cola's proposed takeover of Huiyuan Juice) was blocked by MOFCOM, ... The Task Force will assess whether a particular extraterritorial application of foreign law (“Extraterritorial Measure”) is unjustified and will issue a Prohibition Order to restrict its application. Patrick Doris – London (+44 (0)207 071 4276, pdoris@gibsondunn.com) It is unclear how Chinese courts would enforce their judgments in favor of a Chinese Party against an overseas defendant; for example, it remains to be seen whether a Chinese court might enforce a judgment against the overseas defendant’s subsidiary or assets in China. Where any “party” complies with an Extraterritorial Measure and causes harm to a Chinese Party, Article 9 enables the latter to initiate civil claims against the former in Chinese court. The law will become enforceable once the Chinese government denotes the specific extraterritorial measures—likely sanctions and export controls the United States is increasingly levying against Chinese companies—to which it then will apply. Joerg Bartz – Singapore – (+65 6507 3635, jbartz@gibsondunn.com) The issuance of the Blocking Rules signals that Chinese government is making efforts to tackle various sanctions, export controls and possibly other restrictions targeting at Chinese Persons. Nicolas Autet – Paris (+33 1 56 43 13 00, nautet@gibsondunn.com) 1. Lastly, overseas subsidiaries of Chinese companies, historically, would not be considered “Chinese legal persons” nor fit the definition of “other organizations” in China. It is only used to improve how a website works. With a largely unbounded definition of what is “unjustified,” the new rules give MOFCOM extensive latitude to order Chinese firms not to comply with foreign safeguard China’s economic and security interests against foreign governments’ unilateral legal regimes that seek to restrict business dealings between Chinese and third-country parties. However, the U.S. Government has not formally adjusted U.S. sanctions programs to account for the legal conflict faced by U.S. and European companies eager to remain on the right side of both U.S. and European regulations. Found inside – Page 92Specifically, China revised the rules that govern foreign mergers and acquisitions to establish an “economic security review” that can block deals. MOFCOM’s decision to block the Coke deal, after its … Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. The language in the Blocking Statutes is vague and general in nature and may be subject to discretionary interpretation by MOFCOM. Further, there has been no indication of whether MOFCOM will issue further guidance to allow multinational companies (MNCs) to better understand the scope of the Blocking Statutes restrictions. Found inside – Page 178For example , a new regulation in August 2006 provides MOFCOM with broad discretion to block foreign acquisition of domestic companies involved in a “ key ... Consequences of Non-Compliance: A Chinese person or entity who fails to comply with the reporting obligation or the prohibition order may be subject to government warnings, orders to rectify, or fines. To Our Clients and Friends: On January 9, 2021, the Ministry of Commerce of the People’s Republic of China (the “MOFCOM”) issued the MOFCOM . Notably, the MOFCOM Blocking Rules appear to allow claims in Chinese court following the exercise of a contractual arbitration provision if an arbitration award unfavorable to a Chinese person is issued pursuant to a foreign law that has been blocked by a MOFCOM prohibition order. Article 13 empowers MOFCOM to issue warnings, order remediation, and impose fines on Chinese Parties who (1) fail to make a truthful report or (2) fail to comply with a Prohibition Order. You have not solved the recaptcha challenge yet or session expired, try again. These cookies will be stored in your browser only with your consent. Found inside – Page 92MOFCOM rejected the P3 Alliance because it believed that it would have an ... liners proposed alliance was blocked by Chinese watchdog', China Law Vision, ... Found insideThe ACFTA-JC is to regularly report to the AEM and the Minister of MOFCOM through ... revised rules of origin, a greater possibility for the application of ... Found insideUnder the M&A Regulation, the agencies did not possess power to block a deal and ... MOFCOM's cautious substantive review generally took longer to complete. While the law is effective immediately, it is not yet fully operational. Found inside – Page 83The 2006 Provisions had added rules allowing MOFCOM to conduct anti- monopoly ... economic security” review process that can block proposed transactions. On Jan. 9, the Ministry of Commerce (MOFCOM) issued “Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures” (the Chinese Blocking Statute). http://www.mofcom.gov.cn/article/b/c/202101/20210103029710.shtml, http://english.mofcom.gov.cn/article/policyrelease/questions/202101/20210103029708.shtml. [3] Critically, this reporting obligation is applicable to Chinese subsidiaries of multinational companies. During a recent press conference, a MOFCOM spokesman asserted that the Blocking Rules were not targeting any specific country or transaction. A Chinese person or entity who suffers “significant losses” due to a counterparty’s compliance with a prohibited law may also obtain “necessary support” from the Chinese government[12]. The Blocking Rules were formulated in accordance with the PRC National Security Law, and aim to (amongst others) counteract the impact on Chinese companies and citizens caused by unjustified extra-territorial application of foreign legislation and other relevant measures (“Foreign Measures”). [1] While the law is effective immediately, as noted below, it currently only establishes a legal framework. On Saturday 9 January 2021, the PRC Ministry of Commerce (MOFCOM) issued MOFCOM Order No. Jose W. Fernandez – New York (+1 212-351-2376, jfernandez@gibsondunn.com) Because the blocking rules apply to Chinese subsidiaries of foreign firms, foreign companies operating in China could be sued for complying with US sanctions or face other countermeasures. Found inside – Page 132Indeed, all seven merger review decisions published by MOFCOM to date either blocked or imposed remedies on offshore transactions (although the ... China’s Ministry of Commerce (“MOFCOM”) issued its latest blocking statute against U.S. export controls at the beginning of this year. Unlike the MOFCOM’s Blocking Rules, the Law imposes prohibitions regarding offending foreign sanctions without the government first identifying such sanctions. U.S. authorities recognize the challenge posed by the EU Blocking Statute, and the recent increasingly robust public and private sector enforcement of it. The Blocking Rules do not expressly grant the MOFCOM-led working group (referred to as a Working Mechanism) power to impose administrative penalties on non-Chinese parties, but it appears that multinational businesses may have exposure to penalties through their Chinese subsidiaries. On January 9, 2021, the Ministry of Commerce ("MOFCOM") of the People’s Republic of China ("PRC") issued Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures (the “Blocking Rules”), which are effective immediately. Vivian Wu is a partner in Baker McKenzie's Beijing office, advising US and European corporations on regulatory, compliance and FCPA-related matters in China. Similar to the EU Blocking Statute, these rules block Chinese persons and companies from … On Jan. 9, the Ministry of Commerce (MOFCOM) issued “Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures” (the Chinese Blocking Statute). [11]   Article 6 of Council Regulation (EC) No 2271/96 of 22 November 1996 protecting against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom. Christopher T. Timura – Washington, D.C. (+1 202-887-3690, ctimura@gibsondunn.com) 12 Where a Chinese Person fails to truthfully report as required or fails to comply with a Blocking Order, MOFCOM may give a … A comparable reporting requirement, including the 30-day reporting obligation, is also found in the EU Blocking Statute. Other measures that could be covered include extraterritorial application, in China or third countries, of U.S. primary sanctions, export controls, and investment restrictions. All rights reserved. a. New Blocking Rules by China’s MOFCOM Create New Risks for Chinese and Foreign Companies Morrison & Foerster LLP China, USA January 20 2021 Found insideAs the authors of this volume write, it is time for a wake-up call. January 14, 2021 By Vivian Wu 4 Mins Read. Unlike the MOFCOM Blocking Rules and the Unreliable Entity List, the Law appears to lack in transparency. Keep up with the latest legal and industry insights, news, and events from MoFo. Most recently, MOFCOM promulgated Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (the “MOFCOM Blocking Rules”), released in January 2021 ( see our client advisory on the MOFCOM Blocking Rules here ). The Rules function similarly to … Cookies that tie into analytics systems, such as Google Analytics, YouTube and Vimeo analytics for embedded video, etc. The new Blocking Regulation in China | Dentons. R.L. The Blocking Rules will be administered by an inter-departmental "Working Mechanism", led by China's Ministry of Commerce (MOFCOM). 7 Articles 9 to 12 of the Blocking Rules. China Released Blocking Rules to Counteract US Long-arm Jurisdiction. Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com) ... China Huiyuan Juice Group Limited («Huiyuan»). The blocking order. Under the new rules, when “a [Chinese] citizen, legal person or other organization … is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations,” the Chinese person or entity is required to report such matters to China’s State Council within 30 days. Found inside – Page 83The new rules also place MOFCOM in the role of determining if the domestic acquisition target has been appropriately valued and allow MOFCOM to initiate an ... On 9 January 2021, the MOFCOM issued the Blocking Rules. Found insideUnder EU law, a block exemption was applicable to liner conferences ... in the final decision issued by MOFCOM, it is noted that on 8 September 2013 MOFCOM ...
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