Common Questions

What is China's Anti-Foreign Sanctions Law?

China's Anti-Foreign Sanctions Law, enacted in June 2021, gives Beijing authority to impose retaliatory countermeasures against foreign governments and entities that apply discriminatory sanctions against Chinese citizens or organisations.

How did China use the Anti-Foreign Sanctions Law against Hengli sanctions?

MOFCOM cited the AFSL as the legal basis for its April 2026 protest over US sanctions on Hengli Petrochemical but stopped short of activating countermeasures; analysts interpreted this as a calibrated signal rather than a full response.Source: event

Has China ever actually activated the Anti-Foreign Sanctions Law?

China has issued Unreliable Entity List designations and individual sanctions under related laws, but full AFSL countermeasure packages have been applied sparingly; the law is seen as a deterrent instrument more than a routinely deployed tool.

Background

The Anti-Foreign Sanctions Law (AFSL) is a piece of Chinese legislation adopted in June 2021 that gives Beijing formal legal authority to impose countermeasures against foreign governments, organisations, and individuals who apply discriminatory restrictive measures against Chinese citizens or entities. The law was enacted primarily in response to US, EU, UK, and Canadian sanctions related to Xinjiang, Hong Kong, and technology supply-chain disputes, and is administered through MOFCOM (Ministry of Commerce) and the Ministry of Foreign Affairs. Its key mechanisms include a countermeasures list, the Unreliable Entity List, and a private right of action enabling Chinese nationals harmed by foreign sanctions to sue in Chinese courts with damages enforceable against assets in China.

In the context of the 2026 Iran conflict, the AFSL was invoked directly when MOFCOM Announcement No. 21 — issued 2 May 2026 — identified five mainland refinery entities (Hengli Petrochemical at Dalian, Shandong Shouguang Luqing, Shandong Jincheng, Hebei Xinhai, and Shandong Shengxing) and directed Chinese nationals and entities to disregard US sanctions imposed on them under Executive Orders 13902 and 13846. OFAC's response was instructive: those same five firms were excluded from every SDN designation round from 11 May through 19 May 2026, suggesting Washington accepted the legal mirror signal without escalating. MOFCOM cited the AFSL as legal basis for its protest but stopped short of activating the Unreliable Entity List or asset freezes.

The AFSL's practical deployment record remains limited. China has issued individual sanctions and Unreliable Entity List entries under related instruments, but full AFSL countermeasure packages have been applied sparingly. The law functions primarily as a deterrent instrument: its existence constrains the behaviour of European and US firms operating in China who face legal exposure if they comply with US secondary sanctions targeting Chinese companies. The gap between the law's formal powers and its activation record is the defining feature of China's sanctions-countermeasure strategy.

More questions

What is MOFCOM Announcement No. 21 and how does it relate to Iran sanctions?

MOFCOM Announcement No. 21, issued 2 May 2026, directed five mainland Chinese refiners to disregard US sanctions imposed for purchasing Iranian crude under EOs 13902 and 13846. OFAC subsequently excluded those same five firms from every SDN round through 19 May, suggesting a de facto accommodation.Source: event

Has China ever actually used the Anti-Foreign Sanctions Law?

China has issued Unreliable Entity List designations and individual sanctions under related laws, but full AFSL countermeasure packages have been applied sparingly; the law functions primarily as a deterrent, and its activation record is limited relative to the scale of Western sanctions on Chinese entities.

Can European companies be sued under China's Anti-Foreign Sanctions Law?

Yes. The AFSL includes a private right of action enabling Chinese nationals harmed by foreign sanctions to sue sanctioning parties in Chinese courts, with damages enforceable against assets in China. This creates legal exposure for European firms that comply with US secondary sanctions targeting Chinese companies.

Source Material

Anti-Foreign Sanctions Law — Wikipedia China: Anti-Foreign Sanctions Law

How the World Sees Them

Views AFSL as an instrument of economic coercion; its limited activation record suggests China calculates the costs of full deployment as too high during the Iran conflict.

Iran

Iran's bilateral crude-sales architecture benefits indirectly from the AFSL: MOFCOM-protected Chinese refiners continue purchasing Iranian crude, and Washington's refusal to designate them narrows OFAC's effective enforcement perimeter.

China

The AFSL is a sovereign legal instrument asserting China's right to engage in lawful trade; MOFCOM's restrained deployment in May 2026 reflects strategic patience — signalling capability without triggering a full confrontation during a volatile period.

United States

Washington views the AFSL as an instrument of economic coercion; OFAC's pattern of excluding MOFCOM-protected mainland refiners from SDN rounds in May 2026 suggests a tacit acceptance of China's legal red line without formal acknowledgment.

European businesses

The AFSL's private right of action creates legal risk for EU firms that comply with US secondary sanctions targeting Chinese companies; the law has not yet been tested at scale against European defendants but the exposure is real.