Written by Jeremy MEI Ziyang
LLM scholar at Wuhan College
Visiting scholar at Singapore Administration College
On 15 Might this yr, Ministry of Justice (MOJ) of China issued its Official Discover No 5 of 2026 (‘the MOJ Discover’), saying that the related extraterritorial investigation carried out by EU on Chinese language entities Nuctech constitutes improper extraterritorial jurisdiction measures beneath China’s Regulation on Countering Improper Overseas Extraterritorial Jurisdiction (ROCIFEJ, State Council Decree No 835).[1] This Regulation was promulgated and entered into pressure on 7 April 2026. As a nationwide regulation promulgated by State Council, though it can’t be referred to as an ‘Act’ that must be handed by the Nationwide Folks’s Congress, its authorized hierarchical pressure instantly follows an ‘Act’, larger than the earlier Blocking Guidelines issued by Ministry of Commerce (MOC).[2]
The MOJ Discover arises from an info request issued by the European Fee to Nuctech’s EU entities. Nuctech is a multinational threat-detection techniques producer and vendor headquartered in China. The Fee began investigation beneath Overseas Subsidies Regulation (FSR) and sought entry to emails of workers of Nuctech’s EU entities. Though these entities are registered and function throughout the EU, their e-mail are saved on their mum or dad firm’s servers in China.
The authorized foundation for this declaration is Articles 3 and 6 of ROCIFEJ. Article 3 empowers Chinese language authorities to take measures countering overseas improper extraterritorial jurisdiction. Article 6 mandates MOJ to challenge official notices figuring out a overseas measure constitutes improper extraterritorial jurisdiction, making an allowance for (1) violation of worldwide legislation and fundamental norms governing worldwide relations; (2) inappropriate jurisdictional nexus with that overseas state; (3) hazard to China’s nationwide sovereignty, safety and improvement pursuits, or injury to lawful rights and pursuits of Chinese language residents and organisations; and (4) different elements that shall be considered.
In keeping with the press releases of MOJ and MOC (which additionally participated within the investigation), the Discover is issued on these grounds: (1) the scope of requested information is broad that ‘clearly violates worldwide legislation and fundamental norms governing worldwide relations’; and (2) EU has additionally compelled Chinese language banking establishments to supply huge and unrelated info positioned in China, adversely affecting the conventional funding and enterprise operations of Chinese language enterprises.[3] Though the issue of inappropriate jurisdictional nexus isn’t talked about, it may be impliedly conveyed that the Chinese language authorities discover it inappropriate for EU to unilaterally purchase information saved in China.
The MOJ Discover states that ‘any organisation or particular person shall not implement or help in implementing such improper extraterritorial jurisdiction measures.’ It’s immaterial whether or not the supplier or assistant is a Chinese language entity. The MOJ Discover creates a direct battle between EU legislation and Chinese language legislation. Nuctech EU entities will face the dilemma of both violating EU legislation or violating Chinese language legislation. There may be additionally no doctrine like ‘overseas sovereign compulsion’ in both EU or China.[4] Below EU legislation, entities selecting to hold out business actions within the EU inner market can not, in precept, depend on the principles of a non-EU state to violate necessary laws of the EU.[5] If the European Fee insists acquisition of these information, Nuctech can not use the Chinese language prohibition as an efficient defence.
The Nuctech case isn’t an remoted incident however a manifestation of a systemic drawback: the escalating horizontal battle between states’ assertions of knowledge jurisdiction. This battle isn’t new. The Microsoft v. United States (2016) litigation already demonstrated the core pressure. Nevertheless, The Nuctech state of affairs beneath the ROCIFEJ represents a qualitative escalation for 3 causes.
First, it entails a direct, public, and legally binding prohibition by China towards compliance with an EU measure. Not like the US the place the Microsoft litigation finally turned on statutory interpretation, China has now issued a proper discover beneath a newly enacted regulation (ROCIFEJ), declaring the EU’s FSR investigation ab initio improper and imposing a constructive authorized responsibility on “any organisation or particular person” to not comply. It is a blocking statute in its most potent type. It transforms a battle of jurisdiction between states right into a direct authorized dilemma for the company entity: adjust to the EU and violate Chinese language legislation with potential sanctions beneath ROCIFEJ, or adjust to Chinese language order and threat penalties from the EU together with fines or a unfavourable inference beneath the FSR. The one potential approach out is Artwork 5 of the ROCIFEJ which permits the affected firm to use for an exemption from MOJ.
Second, the battle is now hardwired into the enforcement actions of two main economies and not using a mutual authorized help or data-sharing framework. The EU and China haven’t any equal of the US-EU Information Privateness Framework, no bilateral judicial help treaty particularly tailor-made to information, and no CLOUD Act-style settlement. The EU’s FSR permits it to demand broad entry to info, together with electronically saved information, from any entity receiving EU subsidies. China’s ROCIFEJ permits it to dam exactly such calls for if they’re deemed to violate worldwide legislation or threaten nationwide pursuits. Neither authorized order accommodates a doctrine of “overseas sovereign compulsion” that may excuse non-compliance. From an EU legislation perspective, the Nuctech EU entities are established within the EU, function throughout the EU inner market, and are topic to EU legislation. The CJEU has persistently held that EU necessary guidelines can comply with EU entities even of their extra-EU actions. A Chinese language blocking discover is unlikely to be recognised as a legitimate defence.
Third, the underlying jurisdictional nexus is essentially contested. The EU’s FSR investigation targets Nuctech’s EU entities, that are legally integrated in EU member states. The Fee’s info request is directed at these EU entities. The truth that these emails are saved on mum or dad firm servers in China is, from an EU perspective, a matter of company organisation, not a jurisdictional bar. The Chinese language authorities, nevertheless, views the request as an improper extraterritorial measure as a result of it seeks information bodily positioned in China, successfully compelling manufacturing from the Chinese language mum or dad firm through its EU subsidiaries. That is the traditional “information controller” (EU) versus “information location” (China) jurisdictional battle, now weaponised by two complete authorized regimes.
The MOJ Discover declares that the EU measure shall not be enforced or assisted in enforcement. However what are the sensible penalties, given the EU’s doubtless disregard for the Chinese language discover? Below Chinese language legislation, the ROCIFEJ gives for enforcement mechanisms. Article 7 permits the Chinese language authorities to “take vital measures” towards any one who complies with a overseas improper extraterritorial measure, together with prohibiting them from doing enterprise with Chinese language entities, proscribing or denying them sure rights, and imposing fines. Extra considerably, Article 8 permits Chinese language residents or organisations which have suffered losses because of one other individual’s compliance with such overseas measures to sue for damages in Chinese language courts. Nuctech’s EU entities or any third events, corresponding to attorneys, service suppliers, and many others., in the event that they adjust to the EU’s information demand, may theoretically face authorized motion in China. Nevertheless, enforcement towards EU-based entities with no property in China is basically symbolic.
Below EU legislation, as famous, there isn’t any “overseas sovereign compulsion” defence. The European Fee can and certain will ignore the MOJ Discover. The FSR empowers the Fee to impose fines for non-compliance with info requests (Article 26). The Fee may additionally draw adversarial inferences about Nuctech’s subsidy standing from the refusal. Thus, if Nuctech’s EU entities can not obtain exemption from China, the MOJ Discover creates a traditional compliance dilemma.
[1] Ministry of Justice of the Folks’s Republic of China, ‘Discover on the Structure of Improper Extraterritorial Jurisdiction as regards Related Measures Taken by EU in Overseas Subsidies Investigation’ (Gov.cn 15 Might 2026) <https://www.moj.gov.cn/pub/sfbgw/zwxxgk/fdzdgknr/fdzdgknrtzwj/202605/t20260515_535049.html> accessed 21 Might 2026.
[2] Guidelines on Blocking Improper Extraterritorial Utility of Overseas Legal guidelines and Measures (Decree [2021] No 1 of Ministry of Commerce) (China).
[3] Ministry of Justice of the Folks’s Republic of China, ‘Spokesperson for the Ministry of Justice Solutions Questions from the Press in regards to the Structure of Improper Extraterritorial Jurisdiction as regards Related Measures Taken by EU in Overseas Subsidies Investigation’ (Gov.cn 15 Might 2026) <https://www.moj.gov.cn/pub/sfbgw/gwxw/xwyw/202605/t20260515_535048.html> accessed 21 Might 2026; Ministry of Commerce of the Folks’s Republic of China, ‘Spokesperson for the Ministry of Commerce Solutions Questions from the Press in regards to the Dedication that Related Measures Taken by EU in Overseas Subsidies Investigation Represent Improper Extraterritorial Jurisdiction Measures’ (Gov.cn 16 Might 2026) <https://www.mofcom.gov.cn/xwfb/xwfyrth/artwork/2026/art_df1b7dd65f014ea29f7de59bb04e2ebf.html> accessed 21 Might 2026.
[4] Re Vitamin C Antitrust Litigation 8 F 4th 136 (second Cir US 2021); Restatement (Fourth) of Overseas Relations Legislation § 442 (2018) (US).
[5] Nuctech (n 3) [80]–[81].
