On September 19, 2020, more than 15 months after announcing it was establishing an “unreliable entities list” (“UEL”), China’s Ministry of Commerce (“MOFCOM”) issued the Provisions on the Unreliable Entity List (the “Provisions”), which took effect immediately. The UEL regime targets foreign entities that the Chinese government determines engage in activities that harm the fundamental interests of the country or its enterprises, organizations or individuals.
The Provisions were released amid growing tensions between the US and China on national security and other issues, and raise compliance challenges and potential conflict of laws issues for foreign enterprises with China-related operations. Notably, the Provisions contain broad criteria that have raised concerns that foreign persons in China may run the risk of designation based on steps to comply with foreign sanctions or export control restrictions against Chinese persons and entities. The Provisions will have significant implications for foreign companies operating in China.
Thank you for joining Mayer Brown Government and International Trade lawyers for a discussion of this important development and related strategic considerations for global companies. Topics included:
- How will the UEL be administered by Chinese agencies?
- What are the criteria for and factors involved in a UEL designation?
- What are the procedures for designating a foreign entity on the UEL?
- What are the consequences of being designated on the UEL?
- How can an entity avoid being named on the UEL?
- How can an entity respond to such a designation?
- What should entities do to manage potential conflicting legal obligations?
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