Chinese Premier Li Qiang has signed a decree of the State Council to publish a new set of rules on countering foreign states' unlawful extraterritorial jurisdiction measures, in order to safeguard national sovereignty, security and development interests, protect the lawful rights and interests of Chinese citizens and organizations, and uphold the international order based on international law, the Xinhua News Agency reported on Monday.

The regulations, consisting of 20 articles, take effect upon publication. They include efforts to establish and improve working mechanisms for countering foreign unjustified extraterritorial jurisdiction, set up a system for the identification, blocking, and countermeasures against foreign unjustified extraterritorial jurisdiction measures, while improving the service and safeguard mechanisms.

The regulations came amid increasing uncertainties in the international environment, especially as a few countries have abused extraterritorial jurisdiction in an attempt to unilaterally alter the basic rules of international trade and economic cooperation, severely disrupting the normal and legitimate economic and trade activities of Chinese enterprises, a Chinese analyst said, noting that the new rules will provide a solid legal foundation for further countermeasures against foreign unjustified extraterritorial jurisdiction and effectively safeguard the legitimate economic and trade rights and interests of enterprises.

Safeguarding legitimate interests

According to the rules, such extraterritorial jurisdiction measures refer to actions taken by a foreign country that violate international law and the basic norms governing international relations and that harm China's sovereignty, security and development interests, or the legitimate rights and interests of Chinese citizens and organizations, Xinhua reported.

The rules also stipulate that the Chinese government has the authority to take countermeasures in response to such actions. They also state that the Chinese government has the authority to exercise extraterritorial jurisdiction over relevant conduct if a sufficient nexus exists.

China's countermeasures taken through legislation are fundamentally different in nature from the abusive "long-arm jurisdiction" practiced by certain Western countries. China's practice constitutes a "defensive measure" to respond to and counter foreign countries' improper extraterritorial jurisdiction that violates international law and the basic norms governing international relations, China's Ministry of Justice said on Monday.

"In recent years, some countries have abused extraterritorial jurisdiction and violated multilateral trade and economic rules, severely disrupting global industrial and supply chains, including those of China, and the regulations are in line with China's practical needs," Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday.

Zhou noted that the regulations aim to provide a solid legal foundation for further countermeasures against foreign unjustified extraterritorial jurisdiction and to effectively safeguard the legitimate economic and trade rights and interests of Chinese enterprises.

Huo Zhengxin, a professor from the China University of Political Science and Law told the Global Times that the move demonstrates China's firm opposition to hegemonism and power politics. In legal form, China clearly declares that it does not accept any country's "long-arm jurisdiction," and uses legal instruments to say "no" to those who undermine and disrupt the international order, while resolutely safeguarding the authority and sanctity of international law and the international order, Huo said.

The rules state that the country shall establish and improve the working mechanisms for addressing foreign unjustified extraterritorial jurisdiction. Relevant departments of the State Council and other relevant organs shall strengthen coordination, cooperation, and information sharing in the identification of and response to measures involving foreign unjustified extraterritorial jurisdiction.

The identification of measures involving foreign unjustified extraterritorial jurisdiction shall take into comprehensive consideration the following factors: whether such measures violate international law and the basic principles of international relations; whether there is an appropriate nexus between the conduct subject to the foreign state's extraterritorial jurisdiction and that state; and whether such measures endanger China's national sovereignty, security and development interests, or harm the lawful rights and interests of Chinese citizens and organizations.

The regulations also state that no organization or individual shall enforce or assist in enforcing such unlawful jurisdiction measures. They state that Chinese citizens and organizations affected by unlawful extraterritorial jurisdiction measures may file lawsuits against those enforcing them, and that government authorities will provide guidance and support for such legal actions.

According to the regulations, the legislative affairs department of the State Council may, in accordance with the decision-making procedures of the working mechanism, issue a decision prohibiting organizations or individuals from complying with or assisting in complying with foreign unjustified extraterritorial jurisdiction measures. Relevant organizations and individuals shall comply with the prohibition order.

"This means that when Chinese enterprises encounter the impact of foreign unjustified extraterritorial jurisdiction, they will have a clear legal basis to rely on. At the same time, the regulations improve the service and safeguard system, thereby enhancing the certainty and confidence of enterprises in their overseas operations," Hu Qimu, a deputy secretary-general of the Forum 50 for Digital-Real Economies Integration, told the Global Times on Monday.

Huo noted that the prohibition order system not only builds a solid "legal wall" to block unjustified extraterritorial jurisdiction measures imposed by foreign legislative, judicial, or law enforcement authorities, but also provides a powerful "legal shield" for relevant parties to lawfully resist such measures.

According to the regulations, the Chinese government may assess the acts of relevant countries in implementing unjustified extraterritorial jurisdiction measures, determine the risk level, and take countermeasures and restrictive measures in accordance with the law in the fields of diplomacy and foreign affairs, entry and exit administration, trade, investment, international cooperation, and foreign aid.

Meanwhile, the regulations establish a system of a malicious entity list targeting foreign organizations and individuals that promote or participate in the implementation of a foreign state's unlawful extraterritorial jurisdiction measures.

"The regulations establish a legal tool for proactive defense and countermeasures, which serves as a deterrent against foreign governments or entities enforcing unjustified extraterritorial jurisdiction, and helps maintain a fair international trade and economic order," Hu added.

Reasonable measure

Chinese authorities have repeatedly expressed firm opposition to the abuse of unilateral sanctions and long-arm jurisdiction.

China's law on countering foreign sanctions was adopted in 2021. China's Ministry of Commerce also released the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures that year. Key meetings of the Communist Party of China in recent years also pledged to strengthen mechanisms for countering foreign sanctions, interference, and long-arm jurisdiction.

Zhou noted that as uncertainty in the external environment continues to increase, some economies have adopted similar measures to protect the interests of their enterprises.

For instance, the EU's blocking statute aims to protect EU operators from the extra-territorial application of third country laws. The EU does not recognize the extra-territorial application of laws adopted by third countries and considers such effects to be contrary to international law. 

Canada has measures in place under its Foreign Extraterritorial Measures Act (FEMA) to help protect Canadians and Canadian businesses from extraterritorial application of foreign laws. FEMA protects Canadian sovereignty, including Canada's international trading and commercial interests, by allowing the Canadian government to respond to unacceptable extraterritorial assertions of foreign jurisdiction.

Huo noted the newly released regulations represent a landmark achievement in accelerating the development of China's foreign-related legal system and improving the mechanisms for safeguarding national security in foreign-related fields. It also signifies that China's capacity to safeguard national and people's interests through the rule of law has been further strengthened.

Zhou said that the regulations are a corresponding and reasonable action taken by China in response to the constantly changing international situation, which enriches the country's "toolbox" of foreign-related legal instruments, not only strengthening China's institutional capacity to counter unilateralism and "long-arm jurisdiction", but also sending a strong and firm signal for upholding international law and promoting multilateralism.