NEw China's Law on Foreign Relations 

Source: Wikimedia commons

implications for businesses

The Standing Committee of the National People’s Congress in China passed the Foreign Relations Law, which took effect on July 1, 2023. This law emphasizes China's global influence and intends to encompass this outreach in a legal context. As a foundational law, it consolidates China's historic foreign policy stances and formulates its external policy practices. It underscores fresh priorities like the Global Security, Development, and Civilization Initiatives. Cited by the NPC observer, while the law sheds light on numerous facets of China's foreign policy operations and aspirations, it introduces also some legal ambiguity, particularly concerning the interpretation and enactment of international agreements. The law consists of 45 articles distributed over six chapters.

China's adoption of the Foreign Relations Law demands particular attention from the global business community. Noted legal firm White & Case emphasizes several critical considerations for these businesses. Firms should closely monitor China's policy changes, especially if they engage with Chinese entities. This is pivotal to anticipate potential countermeasures that could affect operations or transactions in China. Firms also may embrace a risk-based approach to their operations, such as by undertaking regular screenings of their business partners, instituting risk assessments and due diligence before finalizing transactions or partnerships, incorporating clear compliance and sanction clauses in their business documentation, and ensuring that their workforce remains informed through periodic training sessions on these evolving regulations.