China Implements Modern Rules to Counter Foreign Extraterritorial Jurisdiction

On April 13, 2026, China’s State Council issued the Regulation of the People’s Republic of China on Countering Foreign States’ Unlawful Extraterritorial Jurisdiction (State Council Decree No. 835), which took effect immediately upon publication. This regulation establishes a comprehensive legal framework to address actions by foreign countries that violate international law and harm China’s sovereignty, security, and development interests.

Key Provisions of the Regulation

The regulation consists of 20 articles and introduces several key measures. It defines unlawful extraterritorial jurisdiction measures as actions taken by foreign countries that violate international law and basic norms governing international relations, and that harm China’s sovereignty, security, and development interests, or the legitimate rights and interests of Chinese citizens and organizations.

The regulation grants the Chinese government authority to take countermeasures in response to such actions and to exercise extraterritorial jurisdiction over relevant conduct when a sufficient nexus exists. It establishes a system for a “Malicious Entity List” targeting foreign organizations and individuals that promote or participate in the implementation of foreign states’ unlawful extraterritorial jurisdiction measures.

the regulation prohibits any organization or individual from enforcing or assisting in enforcing such unlawful jurisdiction measures. It also provides that Chinese citizens and organizations affected by unlawful extraterritorial jurisdiction measures may file lawsuits against those enforcing them, with government authorities offering guidance and support for such legal actions.

Context and Significance

This regulation builds upon China’s existing legal framework, including the Anti-Foreign Sanctions Law (AFSL) enacted in 2021, and integrates elements from mechanisms such as the Unreliable Entity List (UEL) and MOFCOM Blocking Rules. It represents a shift from ad hoc countermeasures to a coordinated, multi-agency enforcement system capable of addressing commercial conduct, regulatory compliance decisions, and cross-border legal conflicts.

The regulation was issued less than a week after the State Council promulgated the Regulations on the Security of Industrial and Supply Chains (Decree No. 834) on April 7, 2026, indicating a broader effort to strengthen China’s economic security and counter foreign pressures.

Implications for Multinational Corporations

For multinational corporations operating in China, the regulation increases compliance risks. A single corporate action, such as terminating a supplier to comply with foreign export controls, could simultaneously trigger investigations under both Decree No. 834 and Decree No. 835, as well as potential actions under the AFSL and UEL designation processes.

The regulation clarifies China’s position on exercising jurisdiction over conduct with an “appropriate connection” to China, raising the legal exposure for offshore decisions made by foreign companies that impact Chinese interests.

Global Context

The issuance of this regulation comes amid escalating international tensions, including U.S.-China trade disputes and the broader use of unilateral sanctions and long-arm jurisdiction by various countries. China has consistently opposed the abuse of such measures, emphasizing the importance of respecting international law and sovereign equality.

By formalizing its countermeasures through this regulation, China aims to deter unlawful extraterritorial actions whereas providing clear legal avenues for affected entities to seek redress.

As of April 21, 2026, the regulation remains in effect and is being implemented by relevant Chinese government authorities.

China Implements New Rules to Counter Foreign Extraterritorial Jurisdiction

On April 13, 2026, China’s State Council issued the Regulation of the People’s Republic of China on Countering Foreign States’ Unlawful Extraterritorial Jurisdiction (State Council Decree No. 835), which took effect immediately upon publication. This regulation establishes a comprehensive legal framework to address actions by foreign countries that violate international law and harm China’s sovereignty, security, and development interests.

Key Provisions of the Regulation

The regulation consists of 20 articles and introduces several key measures. It defines unlawful extraterritorial jurisdiction measures as actions taken by foreign countries that violate international law and basic norms governing international relations, and that harm China’s sovereignty, security, and development interests, or the legitimate rights and interests of Chinese citizens and organizations.

The regulation grants the Chinese government authority to take countermeasures in response to such actions and to exercise extraterritorial jurisdiction over relevant conduct when a sufficient nexus exists. It establishes a system for a “Malicious Entity List” targeting foreign organizations and individuals that promote or participate in the implementation of foreign states’ unlawful extraterritorial jurisdiction measures.

the regulation prohibits any organization or individual from enforcing or assisting in enforcing such unlawful jurisdiction measures. It also provides that Chinese citizens and organizations affected by unlawful extraterritorial jurisdiction measures may file lawsuits against those enforcing them, with government authorities offering guidance and support for such legal actions.

Context and Significance

This regulation builds upon China’s existing legal framework, including the Anti-Foreign Sanctions Law (AFSL) enacted in 2021, and integrates elements from mechanisms such as the Unreliable Entity List (UEL) and MOFCOM Blocking Rules. It represents a shift from ad hoc countermeasures to a coordinated, multi-agency enforcement system capable of addressing commercial conduct, regulatory compliance decisions, and cross-border legal conflicts.

The regulation was issued less than a week after the State Council promulgated the Regulations on the Security of Industrial and Supply Chains (Decree No. 834) on April 7, 2026, indicating a broader effort to strengthen China’s economic security and counter foreign pressures.

Implications for Multinational Corporations

For multinational corporations operating in China, the regulation increases compliance risks. A single corporate action, such as terminating a supplier to comply with foreign export controls, could simultaneously trigger investigations under both Decree No. 834 and Decree No. 835, as well as potential actions under the AFSL and UEL designation processes.

The regulation clarifies China’s position on exercising jurisdiction over conduct with an “appropriate connection” to China, raising the legal exposure for offshore decisions made by foreign companies that impact Chinese interests.

Global Context

The issuance of this regulation comes amid escalating international tensions, including U.S.-China trade disputes and the broader use of unilateral sanctions and long-arm jurisdiction by various countries. China has consistently opposed the abuse of such measures, emphasizing the importance of respecting international law and sovereign equality.

By formalizing its countermeasures through this regulation, China aims to deter unlawful extraterritorial actions while providing clear legal avenues for affected entities to seek redress.

As of April 21, 2026, the regulation remains in effect and is being implemented by relevant Chinese government authorities.