Sino counter punch

China’s new bylaw allows Huawei to sue TSMC for chip ban
Third-country firms that obey US-imposed bans on tech and supplies to Chinese firms face punishment under new tit-for-tat regulation
Jan 11 2021

SHANGHAI – Beijing is bidding to weaponize its legal power over foreign-invested companies operating in China with a new bylaw hastily announced by the Commerce Ministry over the weekend. A Huawei challenge to TSMC’s adherence to a US-imposed chip ban could be the regulation’s first high-profile legal test.

Effective from Saturday, the new regulation – touted as Beijing’s latest imperative to counter the “extraterritorial excesses” of United States’ bans targeting Chinese firms – will make third-party, non-American entities in China punishable if they adhere to Washington’s punitive demands such as stopping supplies of goods or services.

The new bylaw, titled Regulations to Stifle Improper Extraterritorial Application of Foreign Laws and Measures, was promulgated by newly-installed Commerce Minister Wang Wentao. Analysts say it may have less bite than a formal piece of legislation tabled and stamped by the Chinese parliament.

Still, it states in the first article that its drafting and implementation are guided by Beijing’s existing legal regime safeguarding national security, in particular Chinese laws that in broad terms criminalize acts by foreign entities to impinge on the rights and interests of Chinese individuals and organizations.

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