No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

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

Forthcoming “Unreliable Entity List” May Have Far-Reaching Impact

by Wendy Wysong
June 17, 2019
in Compliance, Featured
U.S. and Chinese flags on opposing boxing gloves representing trade war

The government of China recently announced its intentions to publish a list of foreign entities that harm the interests of Chinese companies. Attorneys from Clifford Chance discuss the particulars and how the “unreliable entity list” will have immediate impact to the businesses listed therein.

with co-authors Hena Schommer and Nick Turner

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 May 31, 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 noncommercial 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 U.S. Entity List, with a less ambiguous nomenclature and purpose. For foreign companies put on the UEL, impact will no doubt be immediately felt.

Official Statements About the UEL

While official regulations spelling out the UEL procedures and the actual list are not yet public, MOFCOM’s spokesperson explained in a press conference on June 1, 2019 that the agency would take into account the totality of the circumstances in adding an entity to the UEL. Factors would include, inter alia, the specific measures taken by the foreign entity against the Chinese companies, the underlying purpose for the discriminatory measures, the damage caused to Chinese companies and related industries and the actual or potential threat to Chinese national security.

MOFCOM is expected to undertake an investigative procedure before adding companies to the UEL. While companies will have the opportunity to object to a UEL listing, it is not clear whether that will occur prior to the listing or as an “off-ramp” for delisting. According to statements made during the press conference, companies will have an opportunity to defend themselves and present arguments to MOFCOM about the possible consequences that a UEL listing would have on their and their Chinese counterparties’ businesses. It is most likely that companies threatened with listing will need to offer compromises to avoid being designated as unreliable.

A company on the UEL will be subject to “any necessary legal and administrative measures” that MOFCOM imposes, while the public will be advised to be cautious to avoid risks associated with the designated foreign entities.

Official Policy

In case the motivation and target of the UEL were not clear from its name and terms, the PRC government also issued an accompanying background statement.

China decided to establish the UEL because “certain countries have been abusing the concept of national security, the measures of export control and their long-arm jurisdictions, which actions have severely harmed the security and stability of the global industrial chain, supply chain and value chain, destroyed the international economic orders and multilateral trading rules and caused injuries to the global economy and national interests of countries including China.” The phrase “long-arm jurisdiction,” in particular, has been used by the PRC government to challenge the use of extraterritorial sanctions by the United States against Chinese companies.

Impact

Whether the list will be a long one and work to essentially shut off trade with companies, particularly from the United States, is a matter of speculation. The initial UEL might also be short, consisting of companies that have publicly announced they have stopped doing business with U.S. listed entities. In that case, the UEL may have little additional impact. In any event, companies contemplating business in China and with Chinese companies will need to factor in the UEL, ensuring commercial rather than regulatory reasons guide their decisions not to do business with other Chinese entities, subject to U.S. restrictions with which China disagrees and considers discriminatory and abusive.


Tags: Sanctions
Previous Post

IIA Sets Exposure Period For Proposed Updates to “Three Lines of Defense”

Next Post

Shared Assessments Announces TPRM Framework to Aid in Creating, Improving and Managing Third-Party IT Security Risk

Wendy Wysong

Wendy Wysong

Wendy L. Wysong is a partner at Steptoe & Johnson. She served previously as a litigation partner with Clifford Chance, offering clients advice and representation on compliance and enforcement under the Foreign Corrupt Practices Act, the Arms Export Control Act, International Traffic in Arms Regulations, Export Administration Regulations, and OFAC Economic Sanctions. She was appointed by the State Department as the ITAR Special Compliance Official for Xe Services (formerly Blackwater) in 2010. Wendy combines her experience as a former federal prosecutor with the United States Attorney for the District of Columbia for 16 years with her regulatory background as the former Deputy Assistant Secretary for Export Enforcement at the Bureau of Industry and Security, U.S. Department of Commerce. She managed its enforcement program and was involved in the development and implementation of foreign policy through export controls across the administration, including the Departments of Justice, State, Treasury and Homeland Security, as well as the intelligence community. Wendy received her law degree in 1984 from the University of Virginia School of Law, where she was a member of the University of Virginia Law Review.

Related Posts

Paul Weiss Economic Sanctions and AML Developments 2022_f

Economic Sanctions and AML Developments

by Corporate Compliance Insights
March 15, 2023

Sanctions start high and stay high 2022 Year in Review Economic Sanctions and AML Developments What’s in this report from...

mining for gold in russia

U.S. Widens Sanctions, Targets Russian Gold Production

by Michael Volkov
July 13, 2022

Russia cranked up its gold production to offset previous international sanctions; now, the U.S. and a group of international allies...

russia ukraine impact

Casualties of War: Global Conflict’s Threat to Business Is a Call to Arms for Cross-Functional Teams

by Chuck Randolph
June 22, 2022

The full extent of the war’s impact on assets and business continuity is unknown, but the time to manage elevated...

Ukraine protest outside of Congress

Biden Administration Ramps Up Enforcement of Russia Sanctions and Export Controls. Here’s What Compliance Teams Need to Know.

by Roberto Gonzalez, Jessica Carey, Rachel Fiorill and Patrick McCusker
March 11, 2022

As the people of Ukraine continue to hold out against the Russian invasion, the Biden Administration, in partnership with allies...

Next Post
concept of network security

Shared Assessments Announces TPRM Framework to Aid in Creating, Improving and Managing Third-Party IT Security Risk

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT