On April 13, 2026, the State Council of the People’s Republic of China issued the Regulations on Countering Foreign Improper Extraterritorial Jurisdiction (Decree No. 835), which took immediate effect without a grace period. This regulation provides a formal legal mechanism for China to resist and prohibit compliance with foreign laws and measures that extend jurisdiction beyond their legitimate territorial scope. It reflects Beijing’s determination to safeguard sovereignty and protect domestic entities from what it views as unlawful foreign interference.
The regulation empowers relevant State Council departments to evaluate whether foreign measures constitute “improper extraterritorial jurisdiction”. If so, they may issue prohibition orders preventing Chinese companies and individuals from complying. Importantly, entities that suffer losses due to adherence to foreign measures may seek compensation through Chinese courts, reinforcing the protection of domestic interests.
Examples of foreign measures likely to be deemed improper under Decree No. 835 include unilateral sanctions imposed by foreign governments against Chinese firms or individuals outside of United Nations mandates; export control restrictions that block Chinese access to critical technologies such as semiconductors or advanced software; secondary sanctions targeting third-country entities for doing business with China; and foreign court orders demanding disclosure of data or halting transactions in ways that conflict with Chinese law.
The regulation directly intersects with U.S. legislation such as the Uyghur Forced Labor Prevention Act (UFLPA), which presumes goods from Xinjiang are made with forced labour and bars their import into the United States. Under Decree No. 835, compliance with UFLPA could expose Chinese companies to liability at home, creating a clear conflict of law.
For compliance professionals, this development requires immediate attention. Multinational firms must assess exposure to foreign sanctions and trade restrictions, prepare for potential conflicts between U.S. and Chinese legal obligations, and develop mitigation strategies to navigate this evolving regulatory landscape.
Official legal source of the Decree 835 as issued by the State Council:
https://data.people.com.cn/rmrb/20260414/11/95820e8e688a43788817bd58338e5d26