CCP retaliates by releasing “unreliable entities list”

BEIJING – Chinese Communist Party’s Ministry of Commerce on Saturday issued a regulation on the “unreliable entities list”, which takes immediate effect upon the release.

But the Chinese Communist Party did not disclose the entity names on the list.

It stipulates that foreign entities that “endanger China’s national sovereignty, security, and development interests” will be prohibited from entering China or operating in China.

The Ministry of Commerce of China announced that the “Regulations on the List of Unreliable Entities” will come into effect immediately. The regulations state that if foreign entities in international economic and trade and related activities endanger China’s national sovereignty, security, and development interests; violate normal market transaction principles, interrupt normal transactions with Chinese companies or individuals, or take discriminatory measures and other serious damages For Chinese enterprises or individuals who have legitimate rights and interests, China will conduct an investigation to determine whether to include relevant foreign entities in the list of unreliable entities. Once foreign entities are included in the list of entities, they will restrict or prohibit import and export activities related to China. Or investing in China, it may also restrict or prohibit entry, work permit, stay, or residence status.

The Ministry of Commerce of China stated in June last year that it would establish an “unreliable entity list” system, including listing foreign companies or organizations that have blocked Chinese companies for non-commercial purposes. At that time, analysis believed that this provision was aimed at pointing out that Google and other American companies had stopped cooperating with China because of the US ban, and it was seen as contending with the US Department of Commerce’s “entity list” to block Huawei.

Liao Shiping, a professor at Beijing Normal University, analyzed that the “Regulations on the List of Unreliable Entities” did not target any specific country or entity. He said: “As for what kind of foreign entities should be included in the list of unreliable entities, the ‘Regulations’ have clear and operable comprehensive judgment criteria and factors.” Liao Shi commented that according to the “Regulations”, relevant departments will make decisions after conducting comprehensive assessments of the extent of harm to China’s national sovereignty, security, and development interests by the actions of relevant foreign entities, the extent of damage to the legitimate rights and interests of Chinese enterprises, other organizations, or individuals and whether they comply with internationally accepted economic and trade rules.

The following is the full text of the “Regulations on the List of Unreliable Entities” of the Ministry of Commerce of China:

Article 1 In order to safeguard national sovereignty, security, and development interests, maintain a fair and free international economic and trade order, and protect the legitimate rights and interests of Chinese enterprises, other organizations or individuals, according to the Foreign Trade Law of the People’s Republic of China, the State The Security Law and other relevant laws have formulated these regulations.

Article 2 The State establishes an unreliable entity list system and takes corresponding measures against the following actions of foreign entities in international economic and trade and related activities:
(1) Endanger China’s national sovereignty, security, and development interests;
(2) Violating the principles of normal market transactions, interrupting normal transactions with Chinese enterprises, other organizations or individuals, or adopting discriminatory measures against Chinese enterprises, other organizations, or individuals, seriously damaging the legitimate rights and interests of Chinese enterprises, other organizations or individuals.
The term “foreign entities” as mentioned in these regulations includes foreign enterprises, other organizations, or individuals.

Article 3 The Chinese government adheres to an independent foreign policy, adheres to the basic principles of international relations such as mutual respect for sovereignty, non-interference in each other’s internal affairs, equality and mutual benefit, opposes unilateralism and protectionism, resolutely safeguards the country’s core interests, safeguards the multilateral trading system, and promotes construction Open world economy.

Article 4 The state establishes a working mechanism (hereinafter referred to as the working mechanism) in which relevant departments of the central state organs participate, and is responsible for the organization and implementation of the unreliable entity list system. The working mechanism office is located in the competent commercial department of the State Council.

Article 5 The working mechanism decides whether to investigate the conduct of the relevant foreign entity in accordance with its authority or on the recommendations and reports of relevant parties; if it decides to investigate, it shall be announced.

Article 6 The working mechanism may investigate the conduct of relevant foreign entities by inquiring the relevant parties, consulting or copying relevant files and materials, and other necessary methods. During the investigation, relevant foreign entities can make statements and defenses.
The working mechanism may decide to suspend or terminate the investigation based on the actual situation; if the facts on which the decision to suspend the investigation is based change significantly, the investigation may be resumed.

Article 7 The working mechanism shall, based on the results of the investigation and comprehensively consider the following factors, make a decision on whether to include the relevant foreign entity in the list of unreliable entities, and make an announcement:
(1) The degree of harm to China’s national sovereignty, security, and development interests;
(2) The degree of damage to the lawful rights and interests of Chinese enterprises, other organizations or individuals;
(3) Whether it complies with internationally accepted economic and trade rules;
(4) Other factors that should be considered.

Article 8 If the facts about the behavior of the foreign entity are clear, the working mechanism may directly and comprehensively consider the factors specified in Article 7 of these regulations to make a decision on whether to include it in the list of unreliable entities; if it is decided to be included, it shall be announced.

Article 9 The announcement of the inclusion of a foreign entity on the list of unreliable entities may indicate the risks of transactions with the foreign entity, and may specify the time limit for the foreign entity to correct its behavior based on actual conditions.

Article 10 For foreign entities included in the list of unreliable entities, the working mechanism may, based on actual conditions, decide to take one or more of the following measures (hereinafter referred to as handling measures) and make an announcement:
(1) Restrict or prohibit them from engaging in import and export activities related to China;
(2) Restrict or prohibit its investment in China;
(3) Restricting or prohibiting the entry of related personnel, transportation vehicles, etc.;
(4) Restrict or cancel the work permit, stay or residence qualification of relevant personnel in China;
(5) Impose a corresponding amount of fines according to the severity of the circumstances;
(6) Other necessary measures.
The handling measures specified in the preceding paragraph shall be implemented by relevant departments in accordance with the division of responsibilities in accordance with the law, and other relevant entities and individuals shall cooperate in the implementation.

Article 11 If the announcement on the inclusion of the foreign entity in the list of unreliable entities specifies the time limit for correction of the foreign entity, the handling measures specified in Article 10 of these Regulations shall not be taken within the time limit; the foreign entity shall not correct its behavior within the time limit and take measures to deal with it in accordance with Article 10 of these regulations.

Article 12 If the relevant foreign entity is restricted or prohibited from engaging in import and export activities related to China, and Chinese enterprises, other organizations or individuals need to conduct transactions with the foreign entity under special circumstances, they shall submit an application to the Office of the Working Mechanism. Agree to conduct corresponding transactions with the foreign entity.

Article 13 The working mechanism may decide to remove the relevant foreign entity from the list of unreliable entities based on actual conditions; if the relevant foreign entity corrects its behavior and takes measures to eliminate the consequences of the behavior within the time limit specified in the announcement, the working mechanism shall make a decision to remove It was removed from the list of unreliable entities.
Relevant foreign entities can apply to remove them from the list of unreliable entities, and the working mechanism determines whether to remove them based on actual conditions.
The decision to remove the relevant foreign entity from the list of unreliable entities shall be announced; the handling measures taken in accordance with Article 10 of these Regulations shall cease to be implemented from the date of the announcement.

Article 14 These regulations shall come into effect on the date of promulgation.

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