China Invokes Anti-Sanctions Law to Block U.S. Penalties on Oil Refineries
China has ordered its citizens and companies not to comply with U.S. sanctions against five Chinese refineries accused of handling Iranian oil, marking the first use of a 2021 law designed to counter "extra-territorial" U.S. economic pressure. The move signals escalating economic tensions between the two powers amid the Middle East conflict.
China Deploys Rare Anti-Sanctions Measure
China has ordered its citizens and companies not to comply with United States sanctions against five Chinese refineries accused of handling Iranian oil, deploying a law intended to counteract "extra-territorial" punitive measures for the first time. China's Ministry of Commerce issued the "prohibition order" after the US Department of the Treasury last month announced sanctions targeting one of China's biggest independently run "teapot" refineries.
Binary Choice for Businesses
China's stance means that firms may increasingly face "binary choices between complying with US sanctions and risking Chinese countermeasures, or vice versa."
Broader Implications
The anti-sanctions law's most significant long-term effect could be to inspire other powers such as Russia and the European Union. A Chinese model – even an imperfect one – of codified counter-sanctions law gives these states a template and, perhaps more importantly, a degree of political legitimacy for doing the same.