China orders non-compliance with US sanctions on 5 firms

China’s Commerce Ministry (MOFCOM) issued on Saturday a prohibition order instructing parties not to recognize or comply with US sanctions on five Chinese firms, citing its review mechanism.

The ministry said the order, effective immediately, aims to safeguard national sovereignty, security and development interests while protecting the legitimate rights of Chinese entities and citizens.

The US imposed sanctions over alleged involvement in Iranian petroleum transactions, placing five firms, including Hengli Petrochemical (Dalian) Refining Co and Shandong Shouguang Luqing Petrochemical Co, on its Specially Designated Nationals (SDN) list, freezing assets and banning transactions.

The ministry said the move, based on China’s national security and anti-foreign sanctions laws as well as the 2021 Blocking Rules, followed a review that found the US measures to be improper extraterritorial application.

The move marks the first time MOFCOM has invoked its blocking statute.

The US Treasury in April sanctioned China’s Hengli Petrochemical (Dalian) Refining Co over alleged purchases of billions of dollars in Iranian oil, while the Trump administration had previously targeted the other four refineries as part of efforts to curb Tehran’s oil revenues.