China Cites New Law to Block EU Probe into Nuctech

The European Commission announced last year that it had launched an in-depth investigation into Chinese security equipment supplier Nuctech, alleging that Nuctech may have received official subsidies to gain a competitive advantage, which would negatively impact the EU market. Nuctech is affiliated with Tsinghua Tongfang Group, which is indirectly controlled by the Chinese government.

The Chinese Ministry of Justice's official website issued an announcement on the 15th, stating that according to the provisions of China's "Anti-Foreign Unjust Extraterritorial Jurisdiction Provisions," the Ministry of Justice, along with the Ministry of Commerce and other relevant departments, investigated and determined that the EU's cross-border investigation practices in its investigation of Nuctech using the "Foreign Subsidies Regulation" constitute improper extraterritorial jurisdiction measures.

The Chinese Ministry of Justice stated that no organization or individual may implement or assist in implementing these improper extraterritorial jurisdiction measures, effective immediately.

A spokesperson for the Chinese Ministry of Justice stated that they urge the EU to immediately correct its erroneous practices and create a fair, just, and predictable market environment for Sino-European cooperation. If the EU insists on overstepping, China will resolutely counter it according to law.

China announced and implemented the "Anti-Foreign Unjust Extraterritorial Jurisdiction Provisions" in April this year, stipulating that if foreign entities implement improper extraterritorial jurisdiction measures that harm China's national sovereignty, security, and development interests, or infringe upon the legitimate rights and interests of Chinese citizens and organizations, the Chinese government has the right to take various counter-measures, including extraterritorial jurisdiction in trade and investment.

Reuters reported on the 15th that this is the first time China has invoked the "Anti-Foreign Unjust Extraterritorial Jurisdiction Provisions." A spokesperson for the European Commission stated that requesting companies to submit data is standard practice and the "Foreign Subsidies Regulation" does not distinguish between the country of origin or ownership of companies.