MOFCOM Blocking Rules (Order No. 1 of 2021)

MOFCOM Order No 1 of 2021, formally the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, is a Chinese blocking framework effective from 9 January 2021. It creates reporting, assessment, prohibition-order, exemption, support and civil-remedy mechanisms for specified foreign measures that restrict dealings between Chinese parties and a third country or its persons.

Procedure

Article 5 requires a Chinese citizen, legal person or other organisation to report specified interference with normal economic, trade or related activity to the Ministry of Commerce within thirty days. Confidential treatment may be requested. Reporting does not itself prohibit compliance with the foreign measure.

A central working mechanism assesses whether the foreign law or measure is an unjustified extraterritorial application. Article 6 lists considerations including international law, impact on Chinese sovereignty, security and development interests, effects on Chinese parties and other relevant factors. The Rules do not provide a mechanical test.

Under Article 7, MOFCOM may issue a prohibition order declaring that the foreign measure must not be accepted, executed or observed. Article 8 allows a Chinese party to seek exemption. Article 9 provides a route to Chinese-court compensation where a person complies with a prohibited measure and harms the claimant, or benefits from a judgment based on it, subject to the text's conditions. Article 11 contemplates government support where a party suffers significant loss from obeying a prohibition order. Article 13 provides administrative consequences for specified non-compliance.

Scope and assessment

The Rules address third-country restrictions, commonly associated with secondary sanctions. They should not be described as cancelling foreign law or guaranteeing a Chinese claimant recovery. Jurisdiction, proof, service, assets, conflicts rules and enforcement remain relevant.

The 2021 Rules also must be distinguished from the Anti-Foreign Sanctions Law (China, 2021), the Unreliable Entity List (China, 2020) and later countermeasure instruments. Similar purpose does not make them one legal authority.

A blocking rule manufactures legal conflict when a multinational cannot satisfy both the foreign restriction and the Chinese prohibition. Its strategic effect depends on whether a prohibition order applies, whether exemptions are granted, where the firm's assets and markets sit, and whether judgments can be enforced. Public silence is not reliable evidence that the framework is unused, and the entry therefore makes no unsupported count of orders or cases.

Decision boundaries

The reporting duty, prohibition order, exemption and damages action are separate stages. A party may have to report a foreign restriction even though MOFCOM has not prohibited compliance. A prohibition order can apply broadly, while an exemption concerns the applicant and stated scope. A Chinese damages judgment also remains distinct from successful recognition or enforcement abroad.

The Rules frame the working mechanism's assessment through Chinese sovereignty, security and development interests as well as international law. That official criterion should be reported as the instrument's test, not converted into an independent finding that a foreign measure is unlawful under international law.

See also

Blocking statutes · Anti-Foreign Sanctions Law (China, 2021) · Unreliable Entity List (China, 2020) · EU Blocking Statute (Regulation 2271/96) · Secondary sanctions · Extraterritorial jurisdiction and effects-based regulation

Sources

1. Ministry of Commerce of the People's Republic of China, Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, Order No 1 of 2021, 9 January 2021.
2. National People's Congress, Anti-Foreign Sanctions Law of the People's Republic of China, adopted 10 June 2021.
3. Ministry of Commerce of the People's Republic of China, Provisions on the Unreliable Entity List, Order No 4 of 2020.

• Jingwan Dai and Kathrin Rau, "China's First Prohibition Order under the Blocking Rules: A Chinese, International and Comparative Law Assessment of China's Response to U.S. Secondary Sanctions", SSRN preprint (2026), DOI 10.2139/ssrn.7219880.