On January 9, 2021, the Ministry of Commerce ("MOFCOM") of the People’s

Republic of China ("PRC") issued Rules on Counteracting Unjustified Extra-

territorial Application of Foreign Legislation and Other Measures (the “Blocking
Rules”), which are effective immediately. The Blocking Rules will serve as
countermeasures to US and other extra-territorial sanctions and export control
restrictions impacting business with Chinese companies and individuals. 

The Rules specify the 2015 National Security Law of the People's Republic of China 6 and "other
relevant laws" as the underlying legal authority, which provides a very broad definition of "national
security."

The stated purpose of the Rules is "counteracting the impact on China caused by unjustified
extraterritorial application of foreign legislation and other measures, safeguarding national
sovereignty, security and development interests, and protecting the legitimate rights and interests of
citizens, legal persons and other organizations of China." The broad scope and purpose leave the
authorities with wide discretion in determining what may constitute a potential threat to national
security, at least pending further implementing guidance. The Rules do not specify the foreign
legislation and other measures targeted, which allows discretion to cover any foreign legislation and
measures that have extraterritorial effect other than treaties or international agreements to which
China is a party (Corr, 2021).

Clearly, these new blocking rules would have significant implications not only to the US, upon
whom the pushback was intended against, but also to all other non-chinese citizens and entities.

In the Philippine setting alone, the possible consequences of the application of the blocking rules
could be anticipated. Expectedly, the Philippine Conflicts of Law rules may be adversely impacted or
infringed upon, even. In the Philippines, there are certain values which are considered to be of
highest import, and among those is protection to labor. The constitution, itself, has impressed upon
the importance of labor, such that any prejudice to the interest of labor would be quickly strike down
by the courts. Thus, it is settled that if a foreign law is prejudicial to labor, Philippine laws shall be
applied. It also goes without saying that protection to labor has become a matter of public policy.
It should be noted that Art. 17 of the Civil Code states that prohibitive laws concerning persons, their
acts or property, and those which have for their object public order, public policy and good customs
shall not be rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country. This provision and other conflicts of law provision of
the code and other statutes may be targeted by the new blocking rules. Thus, even if it is the Chinese
national or company which committed the wrong, the blocking rules may come to their rescue and
the Philippine counterparts would be at China’s mercy. This is even bolstered by the fact that that the
scope of the rules have not been clearly established and the fine lines that surround it have yet to be
drawn. This only implies that the Chinese authorities would have a wider lattitude of discretion in
assessing and evaluating what may constitute potential threat to national security. Clearly, this is
rather self-serving, a greedy attempt to trample upon the rights of foreign entities and nationals.
Levelling the playing field is, obviously, out of the question for China. Undeniably, this is just one of
its ploys in asserting its supremacy over any other nation.
Unquestionably, these blocking rules would not only affect the US, while it was intended as a
pushback against US Sanctions.

While the manner of interpretation and implementation remain to be seen, undoubtedly, these new
rules would have significant implications for both Chinese and non-Chinese companies whose
business dealings may be impacted by Targeted Extra-territorial Measures. Both Chinese and non-
Chinese entities should be mindful of the litigation risks created under this new regime in managing
third-party relationships in China that may be impacted by these rules. 

In the Philippines,