China's Ministry of Commerce (MOFCOM) issued Announcement No. 21 on Saturday 2 May 2026, directing Chinese citizens, companies and organisations not to recognise, enforce or comply with two US instruments: Executive Order 13902, the January 2020 order authorising secondary sanctions on Iran's metals sector, and Executive Order 13846, the August 2018 order restoring secondary sanctions on Iran's energy and financial sectors1. The announcement activates the dormant 2021 Blocking Rules for the first time in five years, and Beijing's accompanying list named the five Chinese refiners now protected from US enforcement, including Hengli Petrochemical (Dalian) under OFAC General Licence V.
A Chinese refiner penalised by a Western counterparty for buying Iranian crude can now sue that counterparty in a Shanghai or Beijing court under the announcement's private right of action. Every Western bank, insurer and shipper running an OFAC compliance programme becomes a litigation target inside the People's Republic, with damages enforceable against Chinese-domiciled assets. The operational consequence is twin liability: enforce, and face Chinese-court litigation; do not enforce, and face US regulatory sanction.
The doctrinal lineage matters for reading Beijing's signal. The 2021 Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation were modelled on the EU Blocking Statute that has applied to US Cuba and Iran sanctions since 1996. The European version has been activated formally only twice in thirty years. China invoking its version inside five years of promulgation, eight days before a Trump arrival, signals that Beijing's read of the bilateral position has crystallised. The political calendar is doing the work the legal text could not on its own.
The compatibility between MOFCOM No. 21 and the MOU now in Iranian hands is what makes the timing tactical rather than confrontational. The MOU's blockade-lifting clause and Hengli's OFAC General Licence V wind-down expiry on 24 May converge on the same fortnight. A US-China sanctions de-escalation deal that pauses enforcement against the five named refiners can be papered without rewriting either instrument, provided the 14-15 May Beijing summit produces a written track. Xi Jinping has named no public agenda item for the summit, leaving Beijing's legal infrastructure as the pre-positioned answer to a question Washington has not yet asked in writing.
