CHINA Law and Practice Contributed by: Xing Nan (Nancy), AnJie Broad Law Firm
7.3.2 Criminal Penalties If the circumvention of sanctions endangers national security or involves the disclosure of state secrets, the offender could be subject to criminal liabilities of life imprisonment or imprisonment for more than ten years under the Criminal Law of the People’s Republic of China. According to the Law of the People’s Republic of China on Countering Foreign Sanctions, no organisa - tion or individual shall enforce or assist in enforcing discriminatory restrictive measures taken by foreign countries against Chinese citizens and organisa - tions. If an organisation or individual conducts those behaviours and infringes upon the legitimate rights and interests of Chinese citizens or organisations, Chinese citizens or organisations may file a lawsuit with the People’s Court, demanding that they stop the infringement and compensate for the losses. Those who have the ability to execute judgments or rulings of the people’s court but refuse to do so, and the circum - stances are deemed serious, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, or a fine. If the circumstances are particularly serious, the organisation or individual shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall also be fined.
• organisations that the individuals or organisa - tions included in the countermeasures list actually control or participate in their establishment and operation. The Company Law of the People’s Republic of China (Revised in 2023) stipulates that a controlling share - holder refers to a shareholder whose capital contribu - tion accounts for more than 50% of the total capital of a limited liability company or whose shares account for more than 50% of the total share capital of a joint stock company. Additionally, a shareholder with less than 50% ownership may still be considered control - ling if their voting rights, based on capital contribution or shareholding, are sufficient to exert a significant influence over the resolutions of the shareholders’ meeting. An actual controller refers to a person who can actually control the company’s behaviour through investment relations, agreements or other arrange - ments. These provisions help to analyse ownership and control. 7.3 Circumvention 7.3.1 Prohibiting Provisions According to the Law of the People’s Republic of China on Countering Foreign Sanctions, organisa - tions and individuals within China shall implement countermeasures taken by relevant departments of the State Council, and otherwise they shall be dealt with by relevant departments of the State Council in accordance with the law, and their activities shall be restricted or prohibited. Any organisation or individual that fails to implement or co-operate in implementing countermeasures shall be held legally responsible in accordance with the law.
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