Recently, the Ministry of Commerce announced countermeasures against a U.S.-based compliance testing company, drawing widespread attention to compliance risks for foreign-related enterprises. This move not only demonstrates China's lawful safeguarding of its national sovereignty and dignity but also sends a clear signal to the market: in a complex international environment, enterprises engaging in global economic and trade activities must pay due attention to the "bidirectional dimension" of legal compliance. As a lawyer who has long handled foreign-related commercial legal matters, I believe it is necessary to analyze the rule-based logic behind these countermeasures from a legal perspective and provide practical compliance recommendations for relevant enterprises.

Event Overview: Background and Legal Basis of Countermeasures

According to public reports, the U.S. compliance testing company targeted by the Ministry of Commerce this time is involved in compliance assessment and testing services for Chinese enterprises. The Ministry of Commerce, in accordance with China's Anti-Foreign Sanctions Law and related regulations, has placed it on the counter-sanctions list and adopted corresponding measures such as prohibiting transactions and freezing assets. This decision is not an isolated event, but rather a continuation of China's use of legal tools in recent years to counter unilateral sanctions and long-arm jurisdiction.

From a legal perspective, China has established a legal toolbox for foreign-related matters centered on the Anti-Foreign Sanctions Law, supplemented by laws and regulations such as the Export Control Law, the Data Security Law, and the Provisions on the Unreliable Entity List. The direct basis for this round of countermeasures is precisely Articles 4 and 5 of the Anti-Foreign Sanctions Law, which authorize the relevant departments of the State Council to take countermeasures against individuals or organizations that directly or indirectly participate in the formulation and implementation of discriminatory restrictive measures. In addition, the Ministry of Commerce may also invoke Article 7 of the Foreign Trade Law to take corresponding measures against discriminatory prohibitions, restrictions, or other similar measures imposed by foreign countries on China in

For Chinese companies and foreign enterprises operating in China, the signal sent by this event is: compliance obligations are not one-way. Chinese companies have legal tools to rely on when facing unreasonable foreign demands. At the same time, cooperating with foreign entities on the countermeasure list will face significant legal risks.

Analysis of Legal Risk Points in Foreign-Related Commercial Compliance

This countermeasure event highlights the complexity of foreign-related commercial compliance, with enterprises facing at least the following categories of legal risks:

**First, counterparty risk.** If an enterprise has business dealings with foreign compliance testing companies that have been subject to China's countermeasures, it may face administrative or even criminal liability for violating the ban. According to Article 12 of the Anti-Foreign Sanctions Law, no organization or individual may execute or assist in executing discriminatory restrictive measures taken by foreign countries against Chinese citizens or organizations. If an enterprise cooperates with foreign entities in order to evade China's countermeasures, it may likewise be held legally accountable.

**Second, cross-border data compliance risks.** Compliance testing companies often involve data collection and assessment, which may touch the applicable boundaries of the Data Security Law and the Personal Information Protection Law. Before providing data abroad, enterprises must complete a security assessment or filing for outbound data transfer; otherwise, they will face heavy fines. After this round of countermeasures, related data flows may be cut off, and enterprises will need to reassess their data processing arrangements.

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Lawyer's tip: In such incidents, companies often first encounter practical issues such as impeded contract performance, payment disruptions, or partners terminating cooperation, but the root cause lies in the failure to establish a foreign-related compliance risk assessment mechanism in advance.

Judicial Practice and Practical Responses: How Enterprises Can Build a Compliance Firewall for Foreign-Related Matters

From a judicial practice perspective, in recent years Chinese courts have increasingly focused on examining whether transactions in foreign-related commercial disputes violate China's mandatory legal provisions. According to Article 153 of the Civil Code, civil juristic acts that violate mandatory provisions of laws and administrative regulations are void. If a contract involves transactions with entities on the countermeasures list, the court may determine the contract to be void, and enterprises may face losses such as being unable to recover payment for goods or having their goods detained.

In practice, we recommend that enterprises adopt the following countermeasures:

**First, establish a screening mechanism for sanctions blacklists.** Keep real-time track of the unreliable entity lists and countermeasure lists published by the Ministry of Commerce and the Ministry of Foreign Affairs, and conduct look-through background investigations on counterparties before signing contracts to avoid direct or indirect transactions with sanctioned entities.

**Second, improve contractual risk clauses.** Add sanctions change and termination clauses to contracts, stipulating that when one party is placed on a sanctions list, the other party has the right to suspend or terminate the contract, and agree on the method of loss allocation. This can effectively reduce the risk of default caused by sudden sanctions.

Third, conduct a special assessment of data compliance. Carry out compliance reviews of business involving cross-border data transfers to ensure compliance with the requirements of Article 36 of the Data Security Law and Article 38 of the Personal Information Protection Law. When necessary, mitigate risks through localized storage or security assessment.

Fourth, seek professional legal support. Foreign-related compliance matters are highly specialized, and in-house corporate legal teams often struggle to address cross-jurisdictional legal issues. It is recommended to consult lawyers familiar with international sanctions and export control regulations before major transactions to develop tailored compliance programs.

Implications for ordinary businesses and individuals: Legal risk awareness is a required course for survival in a globalized world.

The Ministry of Commerce's countermeasures are not merely a macro-level diplomatic game but also offer profound insights for ordinary businesses and individuals.

For small and medium-sized enterprises engaged in import and export trade, do not assume that sanctions risks are far away from you. Even if you do not directly transact with U.S. entities, you may still be indirectly involved with sanctioned products through your supply chain. For example, if a Chinese manufacturer produces components for an American customer, and those components are ultimately used in a regulated field, the company may face investigations by European and American enforcement agencies. Therefore, SMEs should establish basic compliance awareness to avoid breaking the law out of ignorance.

For individuals, if working in foreign enterprises or foreign-related institutions, one must also pay attention to compliance in professional conduct. For example, assisting foreign companies in collecting sensitive data from China may violate the Data Security Law and the Anti-Espionage Law. In recent years, there have been cases where individuals were held criminally liable for illegally providing data to foreign entities.

The life of law lies in its implementation. In today's turbulent tide of anti-globalization, both enterprises and individuals should regard legal compliance as a shield to protect their own rights and interests, rather than as shackles that constrain development.

Conclusion: Law is a solid backing for responding to international gamesmanship.

The Ministry of Commerce's countermeasures against the US compliance testing company once again demonstrate China's determination to use legal means to safeguard national interests and corporate rights. In this context, Chinese enterprises face both challenges and opportunities—those that take the lead in establishing foreign-related compliance systems will gain a competitive advantage in the international arena.

Guangdong Zhiming Law Firm has been deeply engaged in foreign-related legal affairs for many years, accumulating extensive experience in areas such as sanctions response, cross-border compliance, and data protection. We are committed to providing enterprises with full-process legal services, from risk assessment to institutional development, from contract review to dispute resolution, helping them navigate steadily in a complex international environment. Law is not cold provisions but the wisdom that safeguards development. When enterprises encounter foreign-related commercial difficulties, the intervention of professional lawyers can often turn crises into opportunities, making compliance a genuine competitive edge for enterprises.