Regarding the recent U.S. sanctions against five Chinese enterprises under the pretext of Iran-related oil transactions, placing them on the "Specially Designated Nationals List" (SDN List) and imposing asset freezes and other measures, on May 2, 2026, China's Ministry of Commerce issued Announcement No. 21 of 2026 (the so-called Blocking Order), legally blocking the improper sanctions imposed by the United States on five Chinese petrochemical companies. Its core requirement is that U.S. sanctions must be “neither recognized, nor implemented, nor complied with.”

The immense power of U.S. sanctions lies primarily in the deterrent effect of its “secondary sanctions” (Secondary Sanctions). These not only prohibit U.S. entities from transacting with targeted firms but also threaten to penalize any third-party companies—such as banks, suppliers, or customers—in other countries that engage in transactions with the designated targets, thereby isolating them globally.

China’s “Three Nos” Blocking Order precisely aims to sever this transmission chain of secondary sanctions, cutting off the reach of U.S. “legal extraterritoriality” within China’s territory.

The specific requirements of the order include:

For domestic entities in China: No individual or entity shall assist in implementing U.S. sanctions—for example, by refusing transactions or freezing assets. Violation of the order may result in legal accountability within China.

For sanctioned enterprises: Their normal production and business operations conducted in China will be protected under national law.

For foreign entities: If their actions harm the legitimate rights and interests of Chinese enterprises, they may face legal accountability and counter-sanctions from China.

This blocking order marks the first time China has publicly and formally activated the Blocking Regulations, signifying that this countermeasure tool has entered practical application.

The legal basis for the order is the already-issued Blocking Regulations.

The announcement explicitly states that the U.S. practice of sanctioning foreign companies based on domestic laws constitutes an “improper extraterritorial application,” violating international law and fundamental principles of international relations.

The “three nos”—“neither recognize, nor implement, nor comply with”—constitute a legal strategy that effectively undermines the validity of U.S. sanctions, thereby safeguarding the legitimate rights and interests of Chinese enterprises.

This blocking order demonstrates China’s firm resolve to counteract U.S. “long-arm jurisdiction” through legal means. It not only protects specific enterprises but also sends a clear message to the international community about upholding the multilateral trading system.

Its landmark significance lies in:

Providing a “Legal Shield”: It offers robust legal protection to Chinese enterprises targeted by sanctions, stabilizing their operational expectations and ensuring stability in supply chains and industrial chains.

Stabilizing Market Expectations: It sends a clear signal to all market participants—including multinational corporations—that conducting business within China requires compliance with Chinese law. Companies cannot unjustifiably cut ties with Chinese firms out of fear of U.S. sanctions, thus helping maintain a fair and stable business environment.

Demonstrating Determination to Counter via Rule of Law: It shows that China is using legal thinking and legal methods to rationally and factually defend national sovereignty, security, development interests, and the legitimate rights of Chinese enterprises—an effective measure against unilateralism and hegemony.

Original article: toutiao.com/article/1864106071813120/

Disclaimer: The views expressed in this article are solely those of the author.