7. China's counter-extraterritoriality regulations create structural compliance collision for multinationals
China's Regulations on Industrial and Supply Chain Security (7 April 2026) and Regulations on Countering Improper Extraterritorial Jurisdiction (13 April 2026) both took effect immediately with no grace period.
BY GEOPOLITICS DESK · JUNE 4, 2026 · 1 MIN READ
China's Regulations on Industrial and Supply Chain Security (7 April 2026) and Regulations on Countering Improper Extraterritorial Jurisdiction (13 April 2026) both took effect immediately with no grace period. Together they create a malicious-entity list, supply-chain security investigation powers, prohibitions on unauthorized supply-chain investigations within China (which could capture UFLPA and CSDDD due diligence), and personal exposure for executives, compliance officers, and outside advisers — including law firms — that assist clients with OFAC, EU, or UK sanctions compliance. Routine compliance with US/EU/UK regimes can now itself constitute a trigger for Chinese counter-measures. Multinationals need to map which foreign-law triggers apply to their China operations, build dual-compliance protocols, and establish personnel-safety procedures for staff and counsel traveling to or based in China.