The U.S. Department of Commerce said in an announcement on Friday (Sept. 18) that it will ban the downloading of WeChat (WeChat International) and TikTok (Jitterbug Overseas) from Sunday (Sept. 20), and that trading activities on these two platforms will be covered by the ban. The announcement said the move was made to protect U.S. national security.
Then, on Saturday (September 19), China’s Ministry of Commerce (MOFCOM) released its “Regulations on the List of Unreliable Entities” (the “Regulations”) for foreign entities. The publication of this list was seen as the Chinese government’s response to the removal of the WeChat and TikTok mobile applications from the U.S. market.
The Regulations issued by the Ministry of Commerce of the People’s Republic of China states that “foreign entities that endanger China’s national sovereignty, security or development interests; violate normal market trading principles, interrupt normal transactions with Chinese enterprises, other organizations or individuals, or take discriminatory measures against Chinese enterprises, other organizations or individuals that seriously harm the legitimate rights and interests of Chinese enterprises, other organizations or individuals” are included in the List of Unreliable Entities.
In this case, foreign entities are foreign enterprises, other organizations or individuals.
How exactly is it determined which foreign entities can be included in the list? According to the Regulations, a “working mechanism involving relevant departments of central state organs” has been established under the Chinese State Council’s commerce department to investigate the conduct of relevant foreign entities. The working mechanism determines which foreign entities can be included on the list based on the results of the investigation, with reference to four factors, including “the degree of harm to China’s national sovereignty, security, and development interests, and the degree of harm to the legitimate rights and interests of Chinese enterprises, other organizations, or individuals.
According to the Regulations, foreign entities on the list may be subject to one or more penalties. These include, “restricting or prohibiting them from engaging in China-related import and export activities; restricting or prohibiting them from investing in China,” etc. However, the Regulation mentions that, “According to the Regulation, a foreign entity may be subject to one or more penalties.
However, the Regulation mentions that, depending on the actual situation, China may decide to remove the foreign entity in question from the list of unreliable entities.
China’s Ministry of Commerce announced on May 31, 2019 that it would establish a “list of unreliable entities”. After 15 months, the details of this system are finally available. Observers noted, however, that China’s Ministry of Commerce did not announce on Saturday which foreign entities were included in the list of unreliable entities.
According to Hong Kong’s English-language South China Morning Post, there is speculation that U.S. courier company FedEx may be one of the first companies to be blacklisted by Beijing. Chinese authorities began investigating FedEx last year after the company allegedly forwarded two packages to the U.S. that were destined for Huawei’s Asian offices. The company was also accused last year of shipping weapons into China. Another possible target is HSBC, which has been linked to the arrest of Huawei CFO Meng Wanzhou in Canada.
China’s Ministry of Commerce (MOFCOM) said in an announcement that the “Regulations on the List of Unreliable Entities” had been approved by the State Council of China and came into effect on the date of publication.
In response to a reporter’s question about the ban on transactions with WeChat and TikTok in the U.S., a spokesman said, “The U.S. side has banned transactions with mobile apps WeChat and TikTok, citing ‘national security’ concerns,” according to a Sept. 19 issue of China’s Ministry of Commerce website. China is firmly opposed to this,” the spokesman added. The spokesman added, “If the U.S. side persists, China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.
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