China’s Ministry of Commerce (MOC) took the step to impose a formal ban on Saturday. Under this, domestic companies have been prohibited from following America’s sanctions.
The move specifically protects China’s five biggest petrochemical companies, which were recently targeted by Washington for their alleged involvement in Iranian oil trade.
This is the first time Beijing has officially used its “blocking law”. This is a legal mechanism designed to eliminate the extraterritorial effect of foreign laws. This signals a shift away from diplomatic confrontation toward active legal response.
‘Violation of basic rules’
According to China’s MOC, the US measures include listing these companies as ‘Specially Designated Nationals’ (SDN), freezing their assets and prohibiting transactions with them.
Responding to these sanctions, a MOC spokesperson said that the US has imposed sanctions on Chinese companies under its executive orders targeting other countries, starting from 2025. The spokesperson said that the US has cited the alleged role of these companies in petroleum deals with Iran.
The spokesperson criticized the US measures, saying such measures unfairly hinder normal economic and trade transactions between Chinese companies and third countries, as well as their citizens and organizations, in violation of international law and the basic rules governing international relations.
‘The Chinese government strongly opposes those unilateral sanctions…’
Last month, the US Treasury Department’s Office of Foreign Assets Control (OFAC) warned financial institutions around the world about the sanctions risks associated with transactions with independent Chinese oil refineries, commonly known as “teapot” refineries, particularly those located in the Shandong province.
According to an OFAC warning, these refineries will continue to play a key role in the import and processing of Iranian crude oil, including throughout the year 2026. OFAC designated the five refineries mentioned above as part of its action.
Prior to this warning, OFAC had issued a warning against “teapot” refinery Hengli Petrochemical (Dalian) Refinery Co., Ltd. Bans were imposed. OFAC had cited the refinery’s role in purchasing large quantities of Iranian crude oil and petroleum products. According to the Treasury Department, the refinery is one of the major buyers supporting Iran’s oil economy; It is said that it has purchased Iranian petroleum worth billions of dollars.
Reiterating its position, the spokesperson said that the Chinese government strongly opposes unilateral sanctions that are not authorized by the United Nations or are not based on international law.
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