China Invokes Anti-Sanctions Mechanism for First Time, Countering US Iran Oil Curbs
In a historic move, Beijing has activated its "blocking statute" to protect Chinese companies from unilateral US sanctions on Iranian oil, setting a direct challenge ahead of a high-stakes summit.
Beijing, China – May 2, 2025 – China's Ministry of Commerce issued Announcement No. 21, activating the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation for the first time since the law was promulgated on January 9, 2021.
The Directive
The announcement directs all Chinese entities to not recognize, enforce, or comply with two specific US Executive Orders:
- Executive Order 13902 (2020)
- Executive Order 13846 (2018)
These orders currently sanction any entity trading with Iran.
The Trigger
This move follows the US Treasury's designation on April 24, 2025, of five Chinese refiners for purchasing Iranian crude. The targeted firms include:
- Hengli Petrochemical (Dalian)
- Four smaller producers in Shandong and Hebei provinces.
How the Mechanism Works
Under the newly activated rules, if a foreign bank, trader, insurer, or shipper ceases business with the named refiners in order to comply with US law, that refinery may sue for damages in a Chinese court.
Strategic Timing
The announcement was deliberately issued ahead of the scheduled meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing on May 14–15.
Implications
- This invocation establishes a clear precedent for future use against other foreign sanctions.
- The author notes that other BRICS nations may follow China's approach, signaling a potential shift in global economic diplomacy.