What is MOFCOM and what does it do?: MOFCOM is China's Ministry of Commerce, responsible for trade policy, foreign investment rules, and implementing counter-sanctions measures under China's Anti-Foreign Sanctions Law of 2021.
How did China respond to US sanctions on Hengli Petrochemical?: MOFCOM issued a formal diplomatic protest through the US embassy in Beijing in April 2026, condemning the Hengli sanctions as illegal under international law but stopping short of activating retaliatory measures under the Anti-Foreign Sanctions Law.Source: event
What powers does China's Anti-Foreign Sanctions Law give MOFCOM?: The 2021 AFSL allows MOFCOM to place foreign individuals and entities on a countermeasures list, imposing asset freezes, travel bans, and restrictions on doing business in China. The Blocking Rules (a separate 2021 instrument) allow MOFCOM to order Chinese firms not to honour foreign unilateral sanctions.
What is China's MOFCOM and why does it matter for Iran sanctions?: MOFCOM is China's trade ministry. It issued a Blocking Rules order forbidding Chinese firms from complying with OFAC's Hengli sanctions, but China's banking regulator simultaneously told state banks to halt new loans to the same firm.Source: Bloomberg
Why is China's position on Iran oil sanctions contradictory?: MOFCOM publicly ordered five mainland refineries to defy OFAC designations under the Blocking Rules, while the NFRA simultaneously told state banks to stop lending to the same firms, revealing a split between diplomatic signalling and actual financial enforcement.Source: Bloomberg
What is China's 2021 Blocking Rules law?: The Blocking Rules allow MOFCOM to prohibit Chinese firms from complying with foreign unilateral sanctions and to counterclaim in Chinese courts for losses suffered. Announcement No. 21 was its first major activation.
What is China's MOFCOM Blocking Rules Announcement No. 21?: Announcement No. 21, issued 2 May 2026, activated China's 2021 Blocking Rules for the first time in five years, ordering five mainland Chinese refineries not to comply with OFAC's Iran secondary-sanctions programme and creating a private right of action to sue Western firms in Chinese courts.Source: event
Do China's Blocking Rules apply in Hong Kong?: No. MOFCOM's 2021 Blocking Rules cover only mainland Chinese citizens and firms. Hong Kong SAR companies have no legal protection from OFAC enforcement, which is why OFAC's 11 May 2026 Economic Fury round targeted four HK-registered shells rather than mainland entities.Source: event
What is the MOFCOM-NFRA split on Iran sanctions?: MOFCOM (trade ministry) issued a public order for mainland refineries to defy OFAC; NFRA (banking regulator) privately ordered state banks to cut new yuan loans to the same firms. The two ministries are operating contradictory mandates on the same set of companies ahead of the Trump-Xi summit.Source: Bloomberg

Background

MOFCOM (Ministry of Commerce of the People's Republic of China) is the cabinet ministry responsible for trade policy, foreign investment regulation, and international commerce. Founded in 2003 from the merger of the Ministry of Foreign Trade and Economic Cooperation (MFTEC) and the State Economic and Trade Commission (SETC), it sits under the State Council and is headed by Minister Wang Wentao. It oversees export licensing, anti-dumping investigations, trade remedy proceedings, and China's Unreliable Entity List.

Its dual role as both a trade facilitation ministry and an economic statecraft instrument has grown sharply since the 2018 US-China trade war. The marquee counter-sanctions instrument in its arsenal is the 2021 Blocking Rules (Order No. 1), which gives MOFCOM authority to issue mandatory non-compliance orders directing Chinese citizens and firms not to honour foreign unilateral sanctions. A companion tool, the Anti-Foreign Sanctions Law (AFSL) of 2021, allows MOFCOM to place foreign nationals on a countermeasures list subject to asset freezes and visa bans. Together these instruments position MOFCOM as Beijing's primary legal firewall against US and EU secondary-sanctions pressure.

MOFCOM sat at the centre of a three-way institutional split that U#95 made fully visible. On 2 May 2026, MOFCOM issued Announcement No. 21 under the 2021 Blocking Rules — the first live activation of the statute in five years — directing five mainland Chinese refineries (Hengli Petrochemical, Shandong Shouguang Luqing, Shandong Jincheng, Hebei Xinhai, Shandong Shengxing) not to recognise or comply with OFAC's Iran secondary-sanctions orders . The announcement also created a private right of action allowing Chinese entities to sue Western counterparties in Chinese courts for losses incurred through compliance with US Iran sanctions.

Simultaneously, China's NFRA (National Financial Regulatory Administration) was operating on a contradictory track: Bloomberg confirmed on 7 May that the NFRA had privately told ICBC, Agricultural Bank of China, CCB, and Bank of China to halt new yuan loans to the same five refineries that MOFCOM had just ordered to defy OFAC . The MOFCOM-NFRA split is the clearest evidence that Beijing's enforcement posture is bifurcated: MOFCOM signals defiance for diplomatic and domestic consumption while the banking regulator quietly enforces dollar-clearing risk. MOFCOM had also lodged a formal protest via the US embassy channel condemning the Hengli designation as illegal under international law.

On 11 May, OFAC's 'Economic Fury' round designated four Hong Kong-registered shells linked to Iran's IRGC oil-logistics network . Beijing's Blocking Rules extend only to mainland China: MOFCOM has no legal jurisdiction over Hong Kong SAR firms, which remain exposed to OFAC enforcement. OFAC targeted HK entities precisely because the MOFCOM cover does not reach them. The three actors now operate on three different legal geographies and three different policy timelines — MOFCOM (mainland defiance), NFRA (quiet bank wind-down), OFAC (SAR pressure) — with the Trump-Xi summit on 14-15 May as the deadline forcing resolution.