G7 threatens China with further sanctions and China’s response

18 Jun 2024, 57 mins ago

The G7 leaders concluded their summit in Italy last week by issuing their starkest warning yet to China over its  continued support for Russia. The leaders criticised Beijing for its “ongoing support for Russia’s defence industrial base” and threatened additional sanctions against Chinese entities to “prevent abuse and restrict access” to their financial system.

The G7 leaders called on China to press Russia to halt its military aggression, claiming that China’s ongoing support for Russia’s defence sector is enabling Russia to sustain its illegal war in Ukraine and poses significant security threats. The leaders demanded that China cease transferring dual-use materials, including weapons components and equipment, crucial for Russia’s defence industry.

The leaders emphasised that they would continue taking measures against Chinese actors that support Russia’s war efforts, including financial institutions and other entities that facilitate Russia’s acquisition of defence materials. They warned of restrictive measures consistent within their legal framework to prevent abuse and restrict access to their financial systems for targeted individuals and entities in third countries, including Chinese entities, engaged in this activity.

Before the Statement was issued, it was reported that the focus would be on smaller institutions rather than the largest Chinese banks. In response, the Chinese Foreign Ministry spokesman Lin Jian stated on 11 June that China does not accept any illegal unilateral sanctions. He emphasised that normal economic and trade cooperation between China and Russia would not be disrupted by any third party’s actions, and China would take all necessary measures to protect the legitimate rights and interests of Chinese enterprises.

Should the G7 leaders’ threats materialise, as discussed in our previous article entitled ‘Potential EU sanctions on Chinese Companies and Chinese Anti-Sanctions Measures’, the Chinese government is empowered by the  Anti-Foreign Sanctions Law (AFSL), promulgated in June 2021, to adopt countermeasures against foreign countries imposing sanctions against Chinese nationals and entities. Article 12 of the AFSL allows Chinese nationals or entities to sue organisations or individuals implementing or assisting in the implementation of foreign sanctions in Chinese courts.

In addition to domestic legal measures, Chinese nationals or entities subjected to sanctions may also challenge the sanctions with the relevant regulatory bodies or national courts in the countries where the sanctions are imposed, or seek international protection or initiate international legal proceedings under the relevant international treaties. 

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