carl_marks_1312 [comrade/them]

Senior lawmakers in Beijing reviewed a bill this week that would empower state prosecutors to file civil suits against foreign organizations and individuals who allegedly damage China’s interests, state media said.

The proposed law on “procuratorial public-interest litigation” would add to an array of legal mechanisms that China has created in recent years to counter foreign sanctions and other forms of what Beijing considers coercion, particularly from the U.S.

The latest draft of the law, which went through its second reading at a legislative session concluding Friday, includes a new provision stating that prosecutors “may initiate public-interest litigation against unlawful acts committed by foreign organizations or individuals that infringe on” China’s national and public interests, according to state media.

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Defendants in civil lawsuits may be ordered to pay compensation and damages, and can face criminal penalties if they fail to comply. In China, citizens and foreign nationals involved in civil litigation—typically commercial disputes—may also be barred from leaving the country, a practice known as “exit bans.”

Public-interest lawsuits can result in court injunctions and compensation that damage companies’ revenue, operations and reputation, consulting firm Trivium China wrote in a client note. “In other words, it adds another layer of risks for companies to navigate.”

China’s legislature solicited public feedback on an earlier draft of the bill late last year. Trivium said the law, once passed, will add “another spanner to Beijing’s growing counter-sanctions legal tool kit.”

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When foreign measures cause harm to China’s interests, such as “threats to the security of key industrial and supply chains or the blockade of important technologies, procuratorial agencies can explore initiating public-interest litigation to demand cessation of such infringements and compensation for losses,” one of the essays said.

China has in recent years been beefing up its legal tools for resisting pressure from the U.S. and other Western governments, which have imposed economic sanctions and other measures that targeted Beijing’s industrial policies, treatment of Muslim minorities in Xinjiang and restrictions on civil liberties in Hong Kong.

In 2021, Beijing adopted an “antiforeign sanctions law” that prescribed mechanisms for retaliating against foreign sanctions and mitigating their impact on Chinese entities and individuals. Countermeasures include visa denials and expulsion for foreign nationals, seizure of their assets in China and restrictions on their ability to transact with Chinese counterparts. It also allowed Chinese entities and individuals to file lawsuits in Chinese courts to seek compensation for damage caused by foreign sanctions.

More recently, Beijing announced new regulations this year mandating punitive actions against foreign groups and individuals who threaten China’s access to vital resources or who drop Chinese suppliers in response to political pressure, as well as foreign parties who assert “unjustified extraterritorial jurisdiction” over Chinese entities and people.

Penalties include restrictions on doing business and investing in China, as well as traveling to or from the country. Chinese entities targeted by foreign sanctions can also seek compensation through Chinese courts.