Clifford Chance

Sanctions with Chinese Characteristics: PRC Government Threatens to Brand 'Unreliable' Foreign Companies

18 June 2019

China's Ministry of Commerce (MOFCOM) introduced a new layer of complexity for companies doing business with Chinese companies with the announcement of its new "Unreliable Entity List" (UEL) on 31 May 2019.  According to the announcement, the UEL will include foreign enterprises, organizations or individuals that fail to abide by market rules and discriminate against Chinese companies for non-commercial purposes.  Examples given include boycotts, cutting off supplies, or restricting or blocking trade transactions in ways that cause serious damage to Chinese enterprises.

The names of the UEL entities and the specific restrictions applicable to them have not yet been published.  To export control practitioners, the UEL might sound similar to the US Entity List, with a less ambiguous nomenclature and purpose.  For foreign companies put on the UEL, impact will no doubt be immediately felt.

 

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