What the latest sanctions regimes mean for Singapore businesses

For multinationals headquartered in Singapore, China’s counter-sanctions present a risk of regulatory non-compliance. 

The global sanctions landscape has entered an era of unprecedented complexity and conflict, driven by intensifying geopolitical rivalry between major economic powers. 

Whilst companies are familiar with the sanctions regimes of the United States (US), European Union (EU) and other jurisdictions – and many have in place processes to comply – counter-sanctions regimes have now come to the forefront of sanctions compliance.

China has significantly expanded its counter-sanctions framework in response to sanctions and other restrictive measures implemented by the US and the EU. In recent months, it has introduced additional compliance considerations for multinational corporations through new regulations and the issuance of a first-ever formal blocking order prohibiting compliance with certain US sanctions.

This presents significant compliance challenges for corporations headquartered in Singapore that do business in, or have exposure to, the laws of the US and other Western countries, as well as those of China – and they may now find themselves caught between opposing sanctions regimes.

A brief overview of China’s counter-sanctions framework
The cornerstone of China’s counter-sanctions regime is the Anti-Foreign Sanctions Law (AFSL), enacted in June 2021.

China’s broader counter-sanctions framework also includes the Implementation Provisions of the AFSL and the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (the Blocking Rules). Notably, the State Council promulgated two landmark regulations in 2026, introducing new compliance considerations for multinational companies with business connections to China.

Order No. 834, the Provisions of the State Council on the Security of Industrial and Supply Chains, provides the authorities with investigative and countermeasure powers to respond to conduct that might threaten China’s industrial or supply chain security, whilst Order No. 835, the Regulation on Countering Inappropriate Extraterritorial Jurisdiction of Foreign Countries, allows authorities to identify and restrict foreign measures that are considered to apply beyond their proper jurisdiction.

These legislative developments have been accompanied by increasingly active enforcement.

Significantly, in 2026, the Chinese authorities issued the first blocking order under the Blocking Rules and the first identification decision under Order No. 835, the latter in response to an EU investigation into a Chinese company under the Foreign Subsidies Regulation, which China determined to constitute inappropriate extraterritorial jurisdiction. Chinese courts have also begun hearing civil claims brought under the AFSL.

These developments demonstrate that China's counter-sanctions framework is becoming increasingly operationalised and actively enforced.

Why the new regulations matter
The introduction of Orders No. 834 and 835 broadens the circumstances under which business decisions may be scrutinised in China.

Order No. 834 is China's first comprehensive regulation specifically addressing industrial and supply chain security. It introduces a “List of Critical Sectors” mechanism under which strategically important industries will be subject to enhanced regulatory oversight. The list, which has yet to be published, is expected to include sectors such as semiconductors, advanced manufacturing, energy, pharmaceuticals, and critical minerals.

Article 13 of the Order regulates supply chain investigations and information collection activities conducted within China. The provision does not impose a blanket prohibition on supplier due diligence or supply chain reviews; rather, it requires such activities to comply with applicable laws, including data security and other regulatory requirements, without creating new legal obligations.

Companies should carefully consider how information is collected, transferred, and used when conducting China-related due diligence, and should reassess the bases on which any supplier relationships may be terminated — so as to avoid breaching the provisions of the Order.

The Order also establishes a framework for countermeasures against foreign organisations or individuals whose conduct causes, or threatens to cause, substantial harm to China's industrial or supply chain security. Available measures include restrictions on trade, investment, and other commercial activities. Companies should be mindful that liability exposure in this regard is group-wide, and the countermeasures may extend to the entire corporate group.

Order No. 835 creates a different but related risk for businesses.

It establishes a framework for addressing the extraterritorial application of foreign laws that China considers inappropriate. It introduces an identification mechanism under which the Ministry of Justice (MOJ) may, on its own initiative or upon application by affected parties, determine whether a foreign measure constitutes an “inappropriate extraterritorial jurisdiction measure”. Once such a determination is made, organisations and individuals are prohibited from executing or assisting in the execution of the identified measure.

The Order also provides a legal basis for corresponding countermeasures against inappropriate foreign measures. Foreign organisations or individuals that promote or participate in the implementation of inappropriate extraterritorial jurisdiction measures may be placed on a “Malicious Entity List” and be subject to countermeasures.

In addition, the MOJ may issue an “Enforcement Prohibition Order” directed at specific organisations or individuals, prohibiting them from executing or assisting in the execution of an identified measure.

Chinese parties now also have private rights of action and may sue any party — including foreign companies — for damages arising from the other party's compliance with blocked foreign measures. In addition to the aforementioned countermeasures, corporations also face increased private litigation exposure.

Where existing frameworks may fall short
For multinational corporations, many of which are regionally headquartered in Singapore and operate across jurisdictions, China’s counter-sanctions regime presents a heightened risk of regulatory non-compliance.

Compliance teams should conduct risk assessments and carefully examine their exposure under the regime, particularly where key areas such as supply chain due diligence and investigations are concerned. Internal screening procedures, template questionnaires, contractual provisions, and due diligence processes should all be revisited and updated to take into account the requirements under the new regulations.

The enforcement of China's counter-sanctions regime is expected to intensify further, and businesses should ensure that they have an effective and well-coordinated compliance strategy that addresses legal and regulatory requirements across jurisdictions.