China has ordered companies throughout the country not to comply with US sanctions on five Chinese oil refiners accused of trading in Iranian fuel, a move observers say could mark a new stage in Beijing’s pushback against American long-arm jurisdiction.
The order is the first application of a measure designed to block “improper” foreign actions, and could be a potential headache for US sanctions enforcement, according to analysts.
The order was issued in response to a series of US sanctions since last year on entities and individuals that Washington said were involved in trading Iranian petroleum.
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China’s Ministry of Commerce said that among those entities were five Chinese refineries: Hengli Petrochemical (Dalian) Refinery, and “teapot” refineries Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical and Shandong Shengxing Chemical.
The US State Department said on Friday that the sanctions were part of “decisive action to disrupt Iran’s illicit oil trade” and that the country would hold Iran and sanctions-evading partners accountable as long as oil revenues were used to fund “destabilising activities” in the region.
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But the Chinese ministry said late on Saturday that it had conducted an in-depth assessment of the sanctions against the five firms and concluded that the action taken by “the United States on the aforementioned companies constitutes improper extraterritorial application”.