Legal Risks And Responses Of Chinese Enterprises Under U.S. Economic Sanctions

The introduction to this thesis is based on the current context,that is U.S.economic sanctions exist in a variety of ways,including trade embargoes,export controls,investment and financing restrictions,and state aid restrictions.Chinese enterprises’ offshore activities have also become more frequent,and foreign economic sanctions,especially U.S.economic ones,have become one of the main legal risks for enterprises’ offshore transactions.Based on the diverse legal sources of U.S.economic sanctions,which negatively impact the operation,investment,and trade of Chinese enterprises,the issue of “how to remedy the legal risks of U.S.economic sanctions in the context of Chinese enterprises” is first raised.Therefore,this is followed by an overview and analysis of the national and international literature,presenting the research value of the issue,the research methodology,and the structure of this thesis.Chapter 1 provides a comprehensive introduction to economic sanctions and clarifies the concept,purpose,history,and development of economic sanctions,especially U.S.foreign economic sanctions.First,economic sanctions in the modern sense imply strong restraints and restrictions,the extension of which includes financial sanctions,trade sanctions,and investment sanctions.Economic sanctions illustrate the direct purpose of restricting foreign trade and finance,depriving economic benefits,including state aid,from the target state or other target state actors,and the fundamental purpose of achieving broader security(e.g.,national security)and foreign policy objectives.Their origins lie in the 19th-century embargo,and they were followed by legislation during World War I and the introduction of secondary sanctions during World War II,gradually leading to modern economic sanctions.Chapter 2 focuses on the legal basis of U.S.sanctions against Chinese enterprises,and explores how U.S.economic sanctions hit Chinese enterprises from the legal sources and the underlying logic in practice.The legal sources of U.S.economic sanctions are diverse in character,including general laws that provide the basis for sanctions such as the Trading with the Enemy Act and the International Emergency Economic Powers Act on the one hand,and special laws that target specific countries and regions such as Cuba and Iran on the other.As the underlying logic of U.S.foreign economic sanctions,the extension of long-arm jurisdiction from the civil litigation area to secondary sanctions is highly controversial in terms of legality,which will be explored under this thesis.Chapter 3 discusses several typical paths by which Chinese enterprises may be exposed to U.S.sanctions,divided into two categories: primary sanctions risk and sub-sanctions risk.The former includes the risk that the industry to which the firm belongs is involved in U.S.sanctions,the entity is listed on the relevant sanctions list,and the entity’s operations are involved in U.S.sanctions on goods in specific regions of China;the latter is mainly the risk derived from the Chinese entity’s transactions with specific industries in the sanctioned country.Chapter 4 proposes ex-ante and ex-post remedies based on the typical path described above under US law.As a weak "governed party",the most effective way for enterprises to deal with the rules of the target country is to make full use of the rules established by the target country.The conclusion summarises the above in the hope that it will be of interest to companies engaged in foreign trade or transactions and will provide practical assistance to companies in choosing their own sanctions avoidance and remedy mechanisms as required.