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The Chinese government has decided to officially prohibit compliance with United States sanctions, introduced against five firms based in China.
For the first time, China has deployed a prohibition order based on a legal framework adopted in 2021. In late April, the US decided to sanction five firms for connections to the trade in Iranian oil.
The latest development sets the stage for the long-awaited meeting between Donald Trump and Xi Jinping, scheduled for May 14–15 in Beijing.
China’s Ministry of Commerce issued a blocking ban prohibiting any recognition, enforcement or compliance with US sanctions imposed on five Chinese companies on the grounds of their alleged involvement in Iranian petroleum transactions, Xinhua reported.
The US measures include freezing assets of the firms, and banning transactions with them
The five companies are Hengli Petrochemical (Dalian) Refining, Shandong Shouguang Luqing Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, and Shandong Shengxing Chemical.
According to the ministry, the US measures include placing the companies on the Specially Designated Nationals List, freezing their assets, and banning transactions with them.
To safeguard national sovereignty, security and development interests, and to protect the legitimate rights and interests of Chinese citizens, legal persons and other organizations, the ministry issued the ban based on the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, the ministry’s spokesperson said.
The spokesperson noted that the Chinese government has consistently opposed unilateral sanctions that lack authorization from the United Nations and a basis in international law.
Bloomberg: In the past, China quietly allowed companies to comply with US sanctions
China has often railed against unilateral sanctions, but it has in the past quietly allowed companies to comply with them, according to Bloomberg, Yahoo Finance reported.
The authorities wanted to avoid damage to China-based businesses and secure access to the US financial system.
The ministry’s decision targets the US sanctions imposed on the five firms, Ji Wenhua, a law professor and adviser to the Commerce Ministry, wrote for the state-run Economic Daily.
Ji: The decision’s goal is to abolish the sanctions’ effect on Chinese soil
The decision’s goal is to abolish the sanctions’ effect on Chinese soil, rather than simultaneously resorting to more aggressive retaliatory measures, Ji explained.
Analysts from Eurasia Group said that the five refineries primarily work with Chinese banks that have not yet been directly sanctioned.
China would likely hit back hard if the US expands secondary sanctions to banks or major state-owned companies, they added.
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