May 12, 2021
By Alexander H. E. Morawa, S.J.D. On 9 January, 2021, the Ministry of Commerce (MOFCOM) of the People’s Republic of China published its Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures.[1] The Rules are fairly detailed and comprise various substantive and procedural provisions. And yet, they remain vague and – perhaps intentionally – imprecise in crucial respects.[2] This article addresses these rules and considers the context of combating long-arm jurisdiction and countermeasures more broadly. The rules encapsule primarily two core aspects of “blocking legislation,” namely the prevention of the enforcement of foreign judgments and the compliance with orders of foreign authorities.[3] The ministry seeks to counteract only such legislation or measures that meet three criteria: a) they are unjustified; b) they are created by foreign (governmental or relevantly similar) entities, and c) they are applied extraterritorially. The “justification” criterion leaves much room for legal interpretation as well as political tactics on a case-by-case basis. For instance, regulating or even criminalising conduct damaging to national security or other fundamental state interests applying protective jurisdiction – as in the extradition case of Huawai’s Meng – are manifestations of the recognised (albeit extraordinary) permissive principle under international law and require heightened justification. “Foreign” and “extraterritorial” are more objective assessments to be made: given that the rules’ purport is to further compliance with international law and best practices in international relations (Art. 2), Chinese agencies will want to apply them consistent with standards established on the international plane. “Foreign” is a term that denotes another sovereign state, but not an international organisation or entity created by a treaty. Such...
March 17, 2021
In December 2018, while transiting through Canada on her way to Mexico, Ms Wanzhou Meng was taken off her plane, questioned and arrested. Her arrest followed earlier restrictions imposed by the US government on Chinese telecom giant Huawei (of which Ms Meng is the CFO). What actually happened? Is it a campaign against Huawei or China? And if so, is the campaign, and Ms Meng’s arrest legitimate? The restrictions on Huawei and arrest of Ms Meng have taken place in a particular political context, in a struggle between China and the US for political and commercial dominance. One aspect of this struggle is technological dominance. In recent years, China repeatedly identified technological development and advancements as one of its strategies for the future. China’s key opponent and competitor is the US. Traditionally, the US had the upper hand thanks to its technological giants such as Apple and Google and the Silicon Valley hub. However, more recently, a number of Chinese national champions started challenging the US control of the global market. Huawei is probably the most significant example. Although it is privately owned, Huawei is nevertheless perceived as one of China’s national treasures. As such, it is inevitable that the Chinese government does exercise a degree of influence over its activities and – many say – its data. Citing Huawei’s close connection with the Chinese government, the Communist Party and Chinese Liberation Army, as well as the fear that Huawei’s technology and access to information could be used to spy on the US government, companies and individuals, the Obama administration (following a report from the House Intelligence Committee in...
February 5, 2021
By James Min II[1]   What do the December 1, 2018, arrest of Ms. Meng Wanzhou in Canada on behalf of the United States, the U.S. Presidential Executive Order (E.O.) 13943 of August 6, 2020, banning WeChat, E.O. 13942 of August 6, 2020, banning Tiktok, and most recently E.O. 13971 of January 5, 2020, banning Alipay, QQ Wallet among others, all have in common?  Aside from the geopolitical friction or economic rivalry between China and the United States in recent years, the fact is that they all raise complex legal issues.  Moreover, they highlight the importance of Chinese multinational companies’ need to engage in global  business in even a more sophisticated manner when it comes to the conflict of laws and the extraterritoriality of U.S. export control and sanctions laws, while at the same time, on the U.S. side, it also calls for the need for the U.S. Government to address its concerns with Chinese technological rivalry in a more sophisticated and nuanced manner rather than addressing it with blunt instruments.  As Chinese companies conduct business around the world and become even more technologically advanced, the trend appears to be that they will continue to be targets of many national policies.  Thus, it will be even more important that in-house compliance and legal professionals at Chinese companies or those advising such companies help infuse best practices in not only compliance but in business strategies. Given the size and reach of the U.S. economy, technologies, and its legal system, it will be difficult for Chinese multinational companies to simply ignore or avoid the United States entirely in the near term....
January 28, 2021
With increasing financial sanctions imposed on Chinese companies by the US government in recent years, the practice of long-arm justice is ever more relevant for international business. In this article, we will discuss long-arm justice in the US once we have looked at a brief introduction to similar practices historically in China and international institutions like the UN.