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China Rejects EU Data Demands in First Case Countering Foreign Improper Jurisdiction

Wed, 03 Jun 2026
Categories: China Legal Trends
Editor: C. J. Observer

In the first enforcement action under its newly enacted anti-extraterritorial overreach statute, China’s Ministry of Justice (MOJ) issued the MOJ Announcement No.5 on May 15, 2026, declaring the European Union's cross-border investigative practices in its foreign subsidies probe into Nuctech to be "improper extraterritorial jurisdiction".

The MOJ, alongside the Ministry of Commerce (MOFCOM) and other agencies, determined that EU regulators had overreached by compelling Chinese financial institutions to hand over non-essential, internal data stored within China’s borders. Under the directive, no organization or individual in China is permitted to comply with or assist in executing these EU measures.

The MOJ announcement marks the inaugural application of the Regulations on Countering Foreign Improper Extraterritorial Jurisdiction, which took effect in April 2026. MOFCOM had already designated the EU’s Foreign Subsidies Regulation (FSR) practices as trade and investment barriers in January 2025. However, European regulators subsequently escalated their probe, prompting Beijing to deploy its new statutory defense mechanism to protect domestic data sovereignty and corporate interests.

This case quickly follows a separate decision on May 2, 2026, where MOFCOM issued its first-ever blocking order under the Blocking Measures to shield five Chinese firms from secondary U.S. sanctions related to Iranian oil trades. Taken together, these back-to-back enforcement actions signal that China’s multi-layered countermeasure framework—spanning the Anti-Foreign Sanctions Law, the State Council's new Regulations, and MOFCOM regulations—has fully transitioned into active operation. Legal experts note that while the Blocking Measures focus primarily on trade-related secondary sanctions, the new Regulations provide higher-level authority to counter all-scenario overreach, particularly cross-border administrative and data coercion. Chinese officials urged Brussels to correct its errors, emphasizing a preference for resolving bilateral friction through mutual dialogue.

 

Photo by A F on Unsplash

Contributors: CJO Staff Contributors Team

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