MOFCOM Announcement No. 21
Chinese Ministry of Commerce order issued 2 May 2026 activating the 2021 Blocking Rules and creating a private right of action in Chinese courts against Western firms complying with US Iran sanctions.
Last refreshed: 7 May 2026 · Appears in 1 active topic
Can a Western bank comply with US Iran sanctions and Chinese blocking law simultaneously?
Timeline for MOFCOM Announcement No. 21
Mentioned in: China splits on Hengli before Trump-Xi
Iran Conflict 2026Beijing flips its blocking statute live
Iran Conflict 2026- What does China's MOFCOM Announcement No. 21 do to US Iran sanctions?
- It activates China's 2021 Blocking Rules against US Executive Orders 13846 and 13902, directing Chinese entities not to comply with US Iran sanctions and giving them the right to sue Western firms in Chinese courts for complying.Source: MOFCOM / Lowdown
- What is China's Blocking Statute and has it ever been used before?
- China's Blocking Statute (2021 Rules on Counteracting Extra-territorial Application of Foreign Legislation) had never been activated before MOFCOM Announcement No. 21 on 2 May 2026.Source: Lowdown
- Can a company comply with both US Iran sanctions and China's blocking order?
- Not simultaneously. MOFCOM No. 21 creates a direct legal conflict: complying with US OFAC sanctions exposes a firm to Chinese litigation; refusing to comply exposes it to US penalties.Source: Lowdown
- Why did China activate its blocking rules against Iran sanctions in May 2026?
- The activation came one week before the Trump-Xi Beijing summit and coincided with China's diplomatic push for a comprehensive Ceasefire, giving Beijing legal leverage in negotiations over Iran's oil export pathway.Source: Lowdown
Background
China's Ministry of Commerce issued Announcement No. 21 on 2 May 2026, directing Chinese citizens, companies and organisations not to recognise, enforce or comply with US Executive Orders 13902 and 13846 authorising OFAC's Iran secondary sanctions programme. The announcement activated China's dormant 2021 Blocking Rules for the first time in five years and created a private right of action allowing Chinese entities to sue Western counterparties in Chinese courts for complying with those US sanctions.
The 2021 Blocking Statute — formally the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures — was passed by MOFCOM as China's structural response to US secondary sanctions. It had never been activated prior to Announcement No. 21. By triggering it specifically against the two Iran-related executive orders, Beijing created a direct legal conflict for any multinational company operating in both the US and Chinese markets.
The announcement raises the compliance cost for Western firms: compliance with US Iran sanctions now exposes them to Chinese litigation, while non-compliance exposes them to US OFAC penalties. The move was timed one week before the Trump-Xi Beijing summit, giving China a legal card to play in negotiations over Iran's oil export pathway.
