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США & Канада: экономика, политика, культура / USA & Canada: economics, politics, culture
УДК 327
DOI: 10.31857/S2686673022110025
EDN: GWZKYP
Features of the implementation of the mechanism for
countering US sanctions in China and Russia
Dmitriy N. Ermakov
Institute of China and Modern Asia of the Russian Academy of Sciences (ICSA RAS)
32 Nakhimovsky Prospekt, Moscow, 117218, Russian Federation
Financial University under the Government of the Russian Federation
49 Leningradsky Prospekt, 125993, Moscow, Russia
Researcher ID: AAS-7807-2020 Scopus Author ID: 56610014800. РИНЦ ID: 319114
e-mail: ermakov@iccaras.ru
Nina V. Symaniuk
Graduated School of Economics and Management,
Ural Federal University named after first President of Russia Boris Yeltsin,
19 Mira str., 620002 Yekaterinburg, Russia
Shanghai University of Political Science and Law,
7989 Wai Qing Song Road, Shanghai, China 201701
Researcher ID: AAT-7694-2020
РИНЦ ID: 862692
e-mail: n.v.symaniuk@urfu.ru
Jianping Shi
Shanghai University of Political Science and Law,
7989 Wai Qing Song Road, Shanghai, China 201701
e-mail: sjplaw@163.com
Abstract: This article is devoted to the existing mechanisms of countering economic sanc-
tions in Russia and China. The choice of these countries is not accidental. Currently, there is
quite a small number of instruments of influence on states in the field of international relations.
The most effective means are economic sanctions, which are applied against states pursuing
policies that are not always convenient for other states. In the modern world, it is Russia and
China that are the states against which economic sanctions are being applied quite actively. It is
important to conduct a comparative study of the legal mechanisms of opposition to the applied
economic sanctions.
Keywords: Comparative study, counter legal mechanism, economic sanctions, counter le-
gal mechanism against economic sanctions.
For citation: Ermakov, D.N. Symaniuk, N.V., Jianping Shi. Comparative Study of Legal
Countermeasures Mechanisms against U.S. Economic Sanctions in Russia and China. USА &
Canada:
Economics,
Politics,
Culture.
2022;
52
(11):
19-34.
DOI: 10.31857/S2686673022110025
EDN: GWZKYP
Acknowledgements: This article was prepared as part of the work on the grant of the Pres-
ident of the Russian Federation for young scientists No. MK-6113.2021.2 on the topic "The
state structure of Russia and China: comparative legal research".
19
Ермаков Д.Н., Сыманюк Н.В., Цзяньпин Си. Особенности реализации механизма противодействия …
Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
Особенности реализации механизма противодействия
санкциям США в Китае и России
Д.Н. Ермаков
ФГАУН Институт Китая и современной Азии Российской академии наук (ИКСА РАН)
Российская Федерация, 117218, г. Москва, Нахимовский проспект, 32
ФГОБУ ВО Финансовый университет при Правительстве Российской Федерации
Российская Федерация, 125167 Москва, Ленинградский пр-т., 49
Researcher ID: AAS-7807-2020 Scopus Author ID: 56610014800. РИНЦ ID: 319114
e-mail: ermakov@iccaras.ru
Н.В. Сыманюк
Уральский федеральный университет им. первого Президента России Б.Н. Ельцина,
Высшая школа экономики и менеджмента,
Российская Федерация, 620002 Екатеринбург, ул. Мира, 19.
Шанхайский университет политических наук и права.
7989 Wai Qing Song Road, Shanghai, China 201701.
Researcher ID: AAT-7694-2020
РИНЦ ID: 862692
e-mail: n.v.symaniuk@urfu.ru
Цзяньпин Си
Шанхайский университет политических наук и права,
7989 Wai Qing Song Road, Shanghai, China 201701
e-mail: sjplaw@163.com
Резюме: Данная статья посвящена существующим механизмам противодействия
экономическим санкциям в России и Китае. Выбор этих стран не случаен. В настоящее
время существует достаточно небольшое количество инструментов воздействия на госу-
дарства в сфере международных отношений. Наиболее эффективным средством являют-
ся экономические санкции, которые применяются против государств, проводящих поли-
тику, не всегда удобную для других стран. В современном мире именно Россия и Китай
являются государствами, против которых достаточно активно применяются экономиче-
ские санкции. Поэтому важно провести сравнительное исследование правовых механиз-
мов противодействия применяемым экономическим санкциям.
Keywords: сравнительный анализ, юридический механизм противодействия, эконо-
мические санкции
Для цитирования: Ermakov, D.N. Symaniuk, N.V., Jianping Shi. Comparative Study of
Legal Countermeasures Mechanisms against U.S. Economic Sanctions in Russia and China.
USА & Canada: Economics, Politics, Culture. 2022; 52(11): 19-34.
DOI: 10.31857/S2686673022110025
EDN: GWZKYP
Благодарности: Данная статья подготовлена в рамках работы по гранту Президента
Российской Федерации для молодых ученых № МК-6113.2021.2 на тему "Государствен-
ное устройство России и Китая: сравнительно-правовое исследование".
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INTRODUCTION
There is no sign of the waning of global economic sanctions against Russia or China
taken by the U.S. Theses sanctions have had a great influence on the global economy.
Restrictive import and export control have hindered the flow of raw materials and in-
termediate goods, delaying or even stopping the production. In recent years, the U.S.
unilateral economic sanctions have shown three major trends. First, the diversification
of sanctions, from "primary sanctions" against target countries, to "secondary sanctions"
and even "tertiary sanctions"; Second, the scope of application of sanctions has become
wider and it has expanded from the trade control to the financial field; Third, its power
has become stronger and the use of unilateral economic sanctions has become normal,
which seriously violates the fundamental principle of international law of sovereign
equality.
LEGAL FRAMEWORK AND NATURE OF U.S. UNILATERAL ECONOMIC
SANCTIONS
What are sanctions? While there is no one authoritative definition in inter-
national law, the term “sanction” is customarily accepted to refer to political
and legal coercive measures short of war taken by one or several states to com-
pel a sanctioned state to change its political or economic decisions [Mohamad.
2015].
Legal Framework of U.S. Sanctions
The legal framework of U.S. sanctions is composed of three interconnected
levels: statutes promulgated by Congress, executive orders issued by the Presi-
dent, and directives or rules issued by executive departments of the federal gov-
ernment. General statutes mainly used to authorize economic sanctions include
the National Emergencies Act of 1976 (NEA) and the International Emergency
Economic Powers Act of 1977 (IEEPA). These statues are the foundation of U.S.
sanctions, authorizing the U.S. to accomplish its national security and foreign pol-
icy objectives by taking specific measures (including sanctions), and thus ensuring
the domestic legality of unilateral sanctions. The IEEPA, in particular, authorizes
the U.S. president to implement economic sanctions to deal with certain usual or
extraordinary threat [1]. Second, the U.S. President has authority to issue execu-
tive orders pursuant to said statues to determine the scope and degree of sanctions
measures. Currently, President Biden has continued this program by signing into
effect, E.O. 14024 “Blocking Property with Respect to Specified Harmful Foreign
Activities of the Government of the Russian Federation" on April 15, 2021. These
executive orders set the framework for current U.S. sanctions by clarifying each
sanction’s type, scope, and standard. Third, in completion of a sanction action,
certain U.S. federal government departments or offices will subsequently adminis-
ter sanction laws and regulations by issuing directives or rules. As such, the De-
partment of the Treasury’s Office of Foreign Assets Control (OFAC) is responsible
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Ермаков Д.Н., Сыманюк Н.В., Цзяньпин Си. Особенности реализации механизма противодействия …
Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
for creating, implementing, and enforcing U.S. sanctions by issuing directives pur-
suant to executive orders. For example, OFAC has issued 4 directives under E.O.
14024, namely, Directive 1A, “Prohibitions Related to Certain Sovereign Debt of
the Russian Federation” [2]. Since the important objective of the U.S.’ imposing
economic sanctions is to advance its national security and foreign policy goals,
sanctions non-compliance is therefore considered a threat to national security or
foreign relations. Thus, sanctions non-compliance necessarily can result in steep
criminal or civil liabilities.
Types of U.S. Sanctions
U.S. sanctions may be primary or secondary, judged by whether a sanction re-
quires a U.S. nexus (a government-sponsored program). Primary sanctions gener-
ally apply to U.S. persons and entities, including: (1) U.S. citizens and permanent
resident wherever located; (2) entities owned or controlled by U.S. citizens or or-
ganized under U.S. law; and (3) all entities and persons physically located in the
U.S., regardless of nationality, and apply in situations involving U.S. persons,
goods or technologies of the U.S. origin, or activities occurring in the U.S. territo-
ry.
Most U.S. sanctions are primary sanctions, which can be further divided into
two subtypes: comprehensive or targeted primary sanctions. Comprehensive pri-
mary sanctions prohibit all transactions with a specific country or region. U.S. im-
poses comprehensive sanctions on Cuba, Iran, North Korea, Syria, and the Crimea,
DPR, and LPR regions of Ukraine. Targeted primary sanctions generally prohibit
any U.S.-nexus transactions with persons listed on OFAC’s Specially Designated
Nationals (SDN) List, or prohibit specified US-nexus dealing with persons on
OFAC’s Sectoral Sanctions Identifications (SSI) List. Regarding the primary sanc-
tions, Russia or China, as a nation, is not comprehensively sanctioned by the U.S.,
while specified Russia-related or China-related persons or activities are restricted
or prohibited.
In the form of secondary sanctions, even business activity with no U.S. nexus (e.g.,
U.S. dollars, U.S. payment system, or U.S. mediary) can still be subject to U.S. sanc-
tions related to the Russia-Ukraine Conflict. Because of this, non-U.S. companies can
be compelled to cease direct or even indirect business operations in sanctioned states
for fear of secondary sanction repercussions. A broad definition of secondary sanc-
tions refers to all measures aimed to regulate economic transactions between a third
state and a target state [Ruys, Ryngaert. 2020]. In effect, secondary sanctions are im-
plemented by threatening U.S. trade and/or financial restrictions on non-U.S. enti-
ties/individuals that transact with a sanctioned target country or within a sanctioned
program. The major difference between primary and secondary sanctions is that pri-
mary sanctions have a direct U.S. nexus connection while secondary sanctions are re-
lated to transactions without a U.S. nexus as presented in the illustration below
(Fig. 1).
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Figure 1
Purpose of U.S. Secondary Sanctions
Throughout modern history, economic sanctions were used to influence and en-
force political measures since World War I by countries such as the U.S. and interna-
tional organizations such as the United Nations (or previously the League of Nations).
Subsequently, the use of economic sanctions by the U.S. has evolved to include a
broadened form of “secondary sanctions” as initially utilized in 1996 with the Helms-
Burton Act and the Iran and Libya Sanctions Act [3]. Since then, U.S. secondary sanc-
tions as a method of deterrence in international conflicts, have become more familiar
with more frequent implementation in recent years.
The main purpose of U.S. secondary sanctions as a deterrence mechanism, is to pre-
vent the circumvention of primary sanctions and to enhance the effect of sanctions over-
all. On the one hand, a sanctioned target may attempt to circumvent the economic dam-
age or other loss resulting from a U.S. primary sanction by instead cooperating with an
alternative third-party non-U.S. company, making the use of said primary sanction less
consequential. As such, the use of secondary sanction actions against said third-party
counters the option of circumvention by closing this loophole and limiting a target
state’s alternative global options. On the other hand, non-U.S. companies also have vol-
untarily and preemptively ceased its business with sanctioned states from fear of busi-
ness disruption by secondary sanction application no matter how remote. These above
causes and effects lead to a sanctioned state’s comprehensive loss of transaction options
thereby impacting it even more by the intended U.S. reprisal.
Lacking U.S. nexus and therefore direct jurisdiction, secondary sanctions do not
trigger civil or criminal liabilities as do primary sanctions. Secondary sanctions only
regulate the behavior of non-U.S. targets through forms of restrictive economic
measures. Such economic sanctions can be divided into two general types: trade and
financial restrictions.
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Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
Trade sanctions mainly focus on trade activities of third countries’ enti-
ties/individuals in the U.S. such as exportation and importation restriction [Meyer.
2009]. For example, a non-U.S. business supplying nuclear weapons materials to Iran
will be put under secondary trade sanctions. Property and interest of the non-U.S.
business located in the U.S. will be blocked or will not be exported. Also, products
importation into the U.S. could be prohibited if a foreign person knowingly assisted in
activities which led to the imposition of sanctions [4].
Financial sanctions include: 1) Blocking assets. An OFAC secondary sanctioned
entity/individual can have its U.S. based, originated or controlled assets blocked. For
example, E.O. 13599 blocks U.S.-based assets of entities determined to be “owned or
controlled by the Iranian government,” including Iran’s Central Bank. The order was
issued to implement Section 1245 of the FY2012 National Defense Authorization Act
that imposed secondary U.S. sanctions on Iran’s Central Bank.[5]. 2) Prohibition of the
use of U.S. dollars. The U.S. Treasury Department can bar non-U.S. banks from the
U.S. financial system. For example, in 2012, the Treasury sanctioned the Bank of Kun-
lun, together with an Iraqi bank, for helping Iranian banks (including the Bank Tejarat
which was on the SDN List) move millions of dollars, and restricted it from accessing
the U.S. financial system. 3) Divestment. The state or local government can divest or
prohibit mentioned investment activities in Iran. For example, the Comprehensive
Iran Sanctions, Accountability and Divestment Act (CISADA) stipulates relevant re-
quirements directing divestment in Section 202. As a result, France's Total withdrew
from the South Pars 11 natural gas project jointly established with China National Pe-
troleum Corporation and the National Iranian Oil Company for fear of withdrawal
from US investors.
RUSSIA’S NEW COUNTERMEASURES AGAINST
U.S. UNILATERAL ECONOMIC SANCTIONS
The economic sanctions imposed against Russia after the annexation of Crimea in
March 2014 have had a significant impact on the socio-economic situation of Russia
over the past years, and have become especially relevant recently.
The measures that were introduced by the Russian authorities in response to the
sanctions had no less impact. At the same time, the consequences of these events for
the development of the Russian economy can be assessed in different ways.
At the end of July 2014, the EU and the USA switched from targeted sanctions
against private and legal entities to measures against entire sectors of the Russian
economy.
As a response to these unfriendly actions, on August 6, 2014 Russian President
Vladimir Putin signed an order "On application of special economic measures in for-
eign economic policy to ensure Russia’s security." The Government of the Russian
Federation has approved a list of prohibited agricultural products, raw materials and
food from countries that have applied sanctions against Russia (including the United
States of America, European Union countries, Canada, Australia and the Kingdom of
Norway). The corresponding list includes beef, pork, poultry, cheeses and dairy
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products, fruit, nuts and other products. However, later, goods that for one reason or
another are difficult for Russian producers to replace (seed material, salmon fry) were
excluded from this list.
In connection with Ukraine's joining anti-Russian sanctions, retaliatory economic
measures were also extended to include that country as well starting January 1, 2016,
namely a food embargo similar to the one in force against countries that supported
sanctions against the Russian Federation.
Further, every six months, the United States expanded the list of individuals and
legal entities subject to various restrictions, and the EU extended the economic sanc-
tions for another six months, while making minor amendments to the sectoral restric-
tive measures against Russia.
In turn, the Russian Federation, from August 2014 to June 2018, not only did not
tighten the food embargo, but on the contrary weakened it by gradually excluding
various commodity groups from the list (in particular, on May 27, 2016, the Govern-
ment of the Russian Federation allowed the import of meat and vegetables intended
for the production of baby food).
Of course, the uptick in prices in 2014-2015 had a negative impact on the well-
being of Russian citizens. However, the hike in domestic prices has significantly in-
creased the profitability of agricultural and food products produced in the country.
Industries and companies that invested in capacity expansion before the devaluation
of the Russian ruble or had unloaded capacity were able to expand production.
The Russian government has begun to actively develop an import substitution
program aimed at replacing foreign-made goods with domestic ones on the Russian
market, which should contribute to achieving the "sacred goal" of all Russian econom-
ic science, namely economic diversification.
In particular, Russian food producers were unable to compensate for the effects of
the embargo on such commodity groups as live fish and sausage products. For the rest
of the product groups, there is an increase in production in 2016-2017 compared to the
remote 2013.
Therefore, in general, the food import substitution program should be recognized
as successful at that stage.
In this regard, it can be concluded that the countermeasures introduced in August
2014 did not harm the food sector of the Russian economy. In turn, for Western coun-
tries, the sanctions imposed turned out to be unprofitable. Thus, the French Research
Center in the Field of International Economics (CEPII) in a report published in early
July 2016 estimated the export losses of 37 countries that supported sanctions against
Russia, with August 2014 to July 2015 in the amount of $60.2 billion.
The researchers concluded that the bulk of these losses were due to the sanctions
themselves, and not to the retaliatory food embargo imposed by Russia. Thus, 78.1%
of the total volume of lost profits of European countries relates to goods that are not
subject to the Russian trade embargo. The European economy suffered the most - the
EU countries bear 76.7% of all losses from restrictions on trade with Russia.
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However, the ongoing unrest in Ukraine and the war in Syria have become the
reason for the tightening of US sanctions against Russia already in 2018. So, on April
6, 2018, the US Treasury Department announced the introduction of a new package of
sanctions against 14 Russian legal entities and 24 individuals (in particular, Oleg
Deripaska, Suleiman Kerimov, Igor Rotenberg, Alexey Miller, Andrey Kostin and a
number of other persons).
Moscow's response to these actions was not long in coming, and exactly a week
later, on April 13, 2018, a bill on retaliatory actions against the anti-Russian policy of
the United States was submitted to the State Duma of the Russian Federation. Just a
month and a half later, on June 4, 2018, Russian President Vladimir Putin signed Fed-
eral Law No. 127-FZ "On Measures to Influence (counteract) Unfriendly actions of the
United States of America and other foreign states".
The law provides that measures of influence (counteraction) can be introduced in-
dependently of other measures taken. At the same time, counter-sanctions will not
apply to the import of vital goods, the analogues of which are not produced in Russia,
as well as to goods imported into the country for personal use.
The following counteraction measures are called in the law: termination or sus-
pension of international cooperation in industries that will be determined by the Pres-
ident of the Russian Federation; prohibition or restriction on the import into Russia
and export from the country of products and raw materials, the lists of which will be
established by the Government of the Russian Federation; prohibition or restriction on
participation in the privatization of state or municipal property.
The decision on the application of these measures, as well as other measures, may be taken
by the President of the Russian Federation and the Government of the Russian Federation.
The legal assessment of this federal law is ambiguous. Speaking about its criticism, it
can be noted that according to Article 114 of the Constitution of the Russian Federation,
the Government of the Russian Federation must take measures to ensure the legality,
rights and freedoms of citizens, and Article 17 guarantees that these rights are recog-
nized as the highest value. The list of goods proposed by the Government of the Russian
Federation and some deputies in the State Duma of the Russian Federation, subject to a
ban on imports into Russia, caused a wave of criticism from the medical community and
representatives of big business, as it radically limited legal rights and freedoms of citi-
zens (in particular, the provision of medicines not produced in Russia).
In 2022, a new round of economic sanctions against Russia was imposed due to
the conflict in Ukraine.
In this article, we will not list all the sanctions imposed on Russia in 2022, but we
will name some. US President Joe Biden announced "crushing" sanctions against Rus-
sia, providing for:
→ limiting the ability of Russian companies to make payments in dollars, euros,
pounds and yen;
→ restrictive measures — the introduction of SDN — blocking of bank assets in
American jurisdiction, a ban on dollar transactions, a ban on conducting any transac-
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tions with American counterparties for banks: VTB, Otkritie, Novikombank, Sovcom-
bank;
→ restrictive measures — entry into CAPTA — restrictions on correspondent ac-
counts in the USA for Sberbank;
→ other large Russian companies, such as Gazprombank, Rosselkhoznadzor, Alfa-
Bank, Credit Bank of Moscow, Gazprom, Gazprom Neft, are subject to sectoral sanctions
that speak of "restrictions on all transactions, provision of financing and other transac-
tions with new debt obligations with a maturity of more than 14 days and new shares";
→ restrictions on the import of high-tech products;
→ restrictions on borrowing from the US and European markets for the largest
Russian state-owned companies;
→ personal sanctions implying the freezing of assets against the sons of Secretary
of the Security Council of Russia Nikolai Patrushev; Special Representative of the
President of the Russian Federation on environmental protection, ecology and
Transport Sergei Ivanov; head of Rosneft Igor Sechin, as well as against top managers
of VTB and Sberbank;
→ personal sanctions implying the freezing of assets against President Putin,
Foreign Minister Lavrov, Defense Minister Shoigu, Head of the General Staff Valery
Gerasimov.
On February 28, in response to the closure of the sky for its aircraft, the Russian
Federal Air Transport Agency introduced symmetrical restrictions.
On March 3, the head of Roscosmos, Dmitry Rogozin, announced the termination
of deliveries of RD-180 rocket engines to the United States. The maintenance of the
24 engines remaining in American use will also cease.
On March 4, Dmitry Rogozin canceled the planned launch of Soyuz-2.1b with
36 British OneWeb communications satellites from the Baikonur Cosmodrome
planned on March 5. The rocket was removed from the launch pad, and the spacecraft
were placed in one of the buildings.
On March 4, the Ministry of Industry and Trade of the Russian Federation, in re-
sponse to the sanctions announced by the United States and the European Union
against Russian merchant ships, recommended that fertilizer producers refrain from
exporting "until carriers resume rhythmic work and provide guarantees for the total
completion of the export of Russian fertilizers."
On March 5, in connection with the introduction of numerous sanctions against
Russia, including the disconnection of Russian banks from the SWIFT international
payment system and the closure of airspace for Russian aircraft, the President of Rus-
sia signed a decree according to which the Russian government should determine the
list of countries committing "unfriendly actions" against Russia within two days.
On March 14, Vladimir Putin enacted the bill allowing the registration of rights to
foreign aircraft that are leased from Russian companies. According to Transport Min-
ister Vitaly Savelyev, by March 22, Russian airlines had transferred almost 800 aircraft
to the country's register. On April 1, Russian President Vladimir Putin signed a decree
on converting payments for the purchase and leasing of foreign aircraft into rubles.
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On April 5, the Minister of Transport of the Russian Federation Vitaly Saveliev an-
nounced that a pool of 193 aircraft has been formed for flights abroad, including
148 Sukhoi Superjet 100s and about fifty foreign ones, which were initially purchased
by Russian airlines.
On March 14, Russian Prime Minister Mikhail Mishustin signed Decree No. 362,
providing for a temporary ban on the export of wheat, meslin, rye, barley and corn to
the countries of the Eurasian Economic Union, except Belarus. The ban will be in effect
until the end of the 2021/22 marketing year on June 30, 2022. According to the same
decree, the export of white and cane raw sugar is prohibited for the period from
March 15 to August 31, 2022. The ban does not apply to humanitarian aid and sup-
plies under export licenses issued by the Ministry of Industry and Trade, within the
export quota.
On March 23, the Prosecutor's Office of the Russian Federation withdrew from the
International Association of Prosecutors, after the Office of the Prosecutor General of
Ukraine initiated the process of its exclusion.
On March 29, the Government of the Russian Federation approved the legaliza-
tion of parallel imports, allowing suppliers of imported products to sell them in the
Russian Federation without the permission of the trademark owner. On April 22, the
Ministry of Industry and Trade of the Russian Federation determined the list of goods
for which parallel imports will be allowed, 50 groups of goods and about 200 brands.
On March 31, the President of Russia signed a decree on gas trade with "unfriend-
ly countries" for rubles. According to it, gas recipients transfer the currency to special
settlement accounts opened in Gazprombank, and the financial institution converts it
into rubles on the Moscow Exchange.
On April 16, Vladimir Putin signed a law on delisting depository receipts of Rus-
sian companies from foreign sites with subsequent conversion into domestic securi-
ties. According to this law, the world stock exchanges lose the opportunity to operate
with securities of the Russian Federation. This document was published on the official
portal of legal information.
On April 27, Gazprom stopped gas supplies to Poland and Bulgaria, which an-
nounced their refusal to pay for gas under the proposed scheme. A few hours later,
prices for futures contracts for the supply of natural gas soared by more than 23%. On
May 21, Gazprom stopped gas supplies to Finland, on May 30 — to the Netherlands,
on May 31 — to Denmark, as well as for Shell Energy Europe to Germany.
On May 3, the President of Russia signed Executive Order on retaliatory special
economic measures in connection with unfriendly actions of certain foreign states and
international organisations. According to the document, a ban is introduced for state
authorities at all levels, as well as for organizations and individuals under the jurisdic-
tion of the Russian Federation, to make transactions, including the conclusion of foreign
trade contracts, with legal entities, individuals and enterprises under their control, in
relation to which special economic measures are applied. It is also prohibited to fulfill
obligations to persons who have fallen under sanctions under completed transactions,
including transactions under concluded foreign trade contracts, provided that such ob-
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США & Канада: экономика, политика, культура / USA & Canada: economics, politics, culture
ligations are not fully fulfilled or not fulfilled. In addition, there is a ban on the export of
raw materials or products outside Russia, the extraction or production of which takes
place in the Russian Federation, taking into account the fact that they are supplied in
favor of persons subject to sanctions, or by persons subordinate to them, in favor of oth-
er persons. The Government of the Russian Federation was instructed to approve the list
of persons subject to sanctions within 10 days, to determine additional conditions for
classifying transactions as it is, the fulfillment of obligations under which and the com-
mission of which are prohibited according to the decree.
On May 11, the Government of the Russian Federation approved a list of legal en-
tities against which retaliatory sanctions are being imposed. The list includes 31 com-
panies, most of which belong to the Gazprom Germania group. Any transactions are
prohibited with respect to these persons. On the same day, all the above-mentioned
companies stopped receiving gas from Russia.
On May 22, the President of Russia signed a decree on the temporary procedure
for payments on Eurobonds. The document assumes that Moscow will henceforth
consider its obligations fulfilled "if they are fulfilled in rubles in an amount equivalent
to the value of obligations in foreign currency" at the exchange rate on the day of the
transfer of funds to the National Settlement Depository (NSD), through which they
will be transferred to creditors. (Previously, NSD was subject to restrictive measures
of the European Union.) The next day, the Ministry of Finance of the Russian Federa-
tion made the first payments in rubles on Eurobonds with maturities in 2027 and 2047.
On June 21, the State Duma of the Russian Federation in the second and third read-
ings immediately adopted a law allowing Russian companies to import goods without the
permission of the copyright holder, thereby legalizing "parallel import", that is, the import
of goods into the country without the permission of the copyright holder. The law applies
exclusively to the categories of goods approved by the Ministry of Industry and Trade in
May 2022. Among them are individual trademarks, for example, Bentley, Apple, Siemens,
Dyson and product categories, for example, railway locomotives, seedlings.
Thus, we see that at present a legal mechanism for countering economic sanctions
is being actively built in Russia.
CHINA’S NEW COUNTERMEASURES AGAINST
U.S. UNILATERAL ECONOMIC SANCTIONS
Since 2018, U.S. has unilaterally provoked a trade dispute between China and U.S.
On May 15, 2019, U.S. added Huawei Technologies Co., Ltd. to the "entity list" of ex-
port controls. Considering that U.S. has taken the economic sanctions as a common
means to achieve its diplomatic goals, the sanctions have become a "Sword of Damo-
cles". It is extremely necessary to sort out the legal mechanism of economic sanctions
and countermeasures and explore countermeasures against economic sanctions. On
the one hand, China must prepare for countermeasures for possible economic sanc-
tions, which is an inevitable requirement to maintain national economic security. On
the other hand, improving China's foreign economic sanctions legal system has be-
come a necessary means to maintain international order and economy interest.
29
Ермаков Д.Н., Сыманюк Н.В., Цзяньпин Си. Особенности реализации механизма противодействия …
Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
Provisions on Unreliable Entity List
On September 19, 2020, China’s Ministry of Commerce announced "Regulations
on the List of Unreliable Entities" (hereinafter referred to as the "Regulations"), which
were to take effect immediately. China has established an unreliable entity list system,
and has taken corresponding measures against certain specific behaviors of foreign
entities in international economic and trade and related activities. The working mech-
anism participated by the relevant departments of the central state organs is responsi-
ble for the organization and implementation of the unreliable entity list system.
If the working mechanism finds or determines through investigation that foreign
entities have the following behaviors: jeopardizing China's national sovereignty, secu-
rity, and development interests; violating normal market transaction principles, inter-
rupting normal transactions with Chinese enterprises, other organizations or individ-
uals, or if discriminatory measures are taken against Chinese enterprises, other organ-
izations or individuals, which seriously damage the legitimate rights and interests of
Chinese enterprises, other organizations or individuals, the working mechanism may
include such foreign entities on the list of unreliable entities .
The working mechanism will make a decision on whether to include the foreign
entity on the list of unreliable entities based on the findings of the investigation and
comprehensively consider the following factors, and announce it: harm to China’s na-
tional sovereignty, security, and development interests the degree of damage to the
legitimate rights and interests of Chinese enterprises, other organizations or individu-
als; whether it complies with the prevailing international economic and trade rules;
and other factors that should be considered.
For foreign entities included in the list of unreliable entities, the working mecha-
nism may decide to take one or more of the following measures according to the actu-
al situation, and make an announcement: restrict or prohibit them from engaging in
China-related activities. Import and export activities; restrict or prohibit their invest-
ment in China; restrict or prohibit the entry of their relevant personnel, means of
transportation, etc.; restrict or cancel the work permit, stay or residence qualification
of their relevant personnel in China; give a corresponding amount according to the
seriousness of the circumstances Fines; other necessary measures.
Blocking Measures [6]
On January 9, 2021, China’s Ministry of Commerce promulgated the Measures for
Blocking the Improper Extraterritorial Application of Foreign Laws and Measures
(hereinafter referred to as the "Blocking Measures"), which is the preliminary practice
of blocking legislative work in China. There are 15 articles in the full text of the "Block-
ing Measures", most of which are macro-level system regulations, which need to be
further refined and implemented by relevant laws and regulations and specific rules
in the future. In addition, the "Blocking Measures" are only applicable to situations
where the extraterritorial application of foreign laws and measures improperly pro-
hibits or restricts normal economic and trade and related activities between Chinese
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США & Канада: экономика, политика, культура / USA & Canada: economics, politics, culture
entities and third countries (regions) entities, and cannot block foreign laws and
measures in the economic and trade field.
The "Blocking Measures" apply to the extraterritorial application of foreign laws
and measures, which violates international law and basic norms of international rela-
tions. It also improperly prohibits or restricts Chinese citizens, legal persons or other
organizations and third countries (regions) and their citizens. It allows legal persons
or other organizations conduct normal economic and trade related activities.
Article 5 of the "Blocking Measures" stipulates the reporting obligations of Chinese
entities when foreign laws and measures prohibit or restrict their normal economic
and trade and related activities with third-country entities, and stipulates a 30-day
report as time limit. Companies may be penalized if they fail to report as re-quired.
Article 9 of the "Interruption Measures" stipulates the right of claim of Chinese sub-
jects, that is, if one party fails to implement the Chinese ban and causes losses to the Chi-
nese subject of the other party, it may sue (except for exempted subjects). In addition, if a
Chinese citizen, legal person or other organization suffers losses due to a judgment or rul-
ing made in accordance with foreign laws within the scope of the injunction, the Chinese
citizen, legal person or other organization may file a lawsuit in a people's court according
to law, claiming to benefit from the judgment or ruling parties to compensate for losses.
Anti-Foreign Sanctions Law [7]
On June 10, 2021, the Anti-Foreign Sanctions Law of the People's Republic of Chi-
na came into effect. This law is China's first special anti-foreign sanction law, which
provides support and guarantee for China's legal anti-discriminatory measures
against foreign countries.
Countermeasures include the situations described in Articles 3 and 15 of the Anti-
Foreign Sanctions Law. Specifically, the countermeasures include: "discriminatory
restrictive measures" of foreign countries have "interfered in China's internal affairs";
foreign countries, organizations or individuals "implement, assist, and support acts
that endanger my country's sovereignty, security, and development interests." "Inter-
nal affairs" and "discriminatory measures" should be understood broadly, regulation,
sanctions and others (procurement, investment, entry) and China-specific bills.
According to Articles 4 and 6 of the Anti-Foreign Sanctions Law, relevant departments
of the State Council may decide to include individuals and organizations that directly or
indirectly participate in the formulation, decision-making, and implementation of discrim-
inatory restrictive measures into the countermeasures list. Restrictive measures also in-
clude: refusing to issue visas, denying entry, canceling visas or deporting from the coun-
try; sealing, seizing, freezing movable, immovable and other types of property within the
territory of my country; prohibiting or restricting organizations and individuals in transac-
tions, cooperation and other activities; other necessary measures. In addition, for acts that
endanger country's sovereignty, security, and development interests, in addition to the
provisions of the Anti-Foreign Sanctions Law, relevant laws, administrative regulations,
and departmental rules may provide for other necessary countermeasures. The relevant
departments of the State Council may, in accordance with their respective responsibilities
31
Ермаков Д.Н., Сыманюк Н.В., Цзяньпин Си. Особенности реализации механизма противодействия …
Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
and tasks, decide to take one or more of these measures against the relevant individuals
and organizations based on the actual situation.
According to Article 5 of the Anti-Foreign Sanctions Law, the targets of counter-
measures include: individuals and organizations that directly or indirectly participate
in the formulation, decision-making, and implementation of discriminatory restrictive
measures. The following individuals and organizations are meant: the spouses and
immediate family members of individuals included in the counter-list; senior manag-
ers or actual controllers of organizations included in the counter-list; organizations in
which individuals included in the counter-list serve as senior man-agers; counter-list
individuals and organizations actually control or participate in the establishment and
operation of organizations. Based on the aforementioned provisions, the scope of the
object of countermeasures includes: foreign organizations (including overseas branch-
es of Chinese entities), individuals, excluding foreign countries; departments and offi-
cials of multilateral organizations; entities that have a specific relationship with the
objects of the countermeasure list. At the same time, foreign organizations and indi-
viduals can be divided into foreign entities that formulate, decide, and implement
“discriminatory restrictive measures” and foreign entities that implement and assist
“discriminatory restrictive measures” in terms of their behavior.
CONCLUSION
Anti-sanction legal mechanism has the characteristics of professionalism, techno-
logic complexity, and it is necessary for each country to be familiar with legal mecha-
nisms, and gradually establish international legal principles reflecting Russia and
China's values. Russia and China should further improve domestic laws dealing with
international trade, investment, financial and economic frictions, take a proactive atti-
tude to deal with various unfavorable situations through various legal systems. Retal-
iatory measures against other countries' trade protectionism and unilateralism will not
only deter trade protectionist forces, but also will enhance the strength and effective-
ness of both our countries’ foreign trade, investment, financial and economic negotia-
tion positions, as well as effectively enhance our countries’ participation in the inter-
national economic governance system. It will also strengthen Russian and Chinese
voice in the world economy, and guide the development of the international economic
order in a direction that is beneficial to our countries’ national interests and values.
A better approach for Russia and China is active employment of international
rules to deal with primary and secondary sanctions of the U.S., and work together to
build a counter sanctions defense system. First of all, we need to actively participate in
the formulation of international rules and build an ecological institutional network.
The "hybrid territorial and personal" jurisdiction proposed by the United States does
not conform to the jurisdictional principles of international law. The legitimacy of sec-
ondary sanctions was already denied in 1996 by UN General Assembly Resolution
51/22. At the same time, both Russia and China could give full play to the cooperation
mechanism of the “Belt and Road” initiative, strengthen institutional ties with coun-
tries along its route for win-win cooperation, and combine cooperation frameworks of
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США & Канада: экономика, политика, культура / USA & Canada: economics, politics, culture
Shanghai Cooperation Organization and other cooperation frameworks carry out in-
depth multilateral and regional cooperation, mobilize partner countries' enthusiasm
for participation, governance initiatives, innovation and synergy, as well as contribute
to the construction and development of the international anti-sanction system.
ИСТОЧНИКИ
1.
50 U.S. Code § 1701 - Unusual and extraordinary threat; declaration of national
emergency; exercise of Presidential authorities. Section a. Available at:
2. Directive 1A1 Under Executive Order 14024: Prohibitions Related to Certain
Sovereign Debt of the Russian Federation. Department of the Treasury, 2022. Availa-
3. H.R.927 - Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996.
bill/927/text.
4.
22 U.S. Code § 2798 - Sanctions against certain foreign persons (c)(1)(B) and
(a)(3).
Available
at:
=8&hl=true&edition=prelim&granuleId=USC-prelim-title22-
section2798#2798_1_target.
5. See Jeffrey A. Meyer, Second Thoughts on Secondary Sanctions, 30 U. Pa. J. Int`
L. 940 (2009).
6. 商务部令2021年第1号 阻断外国法律与措施不当域外适用办法. Available at:
7. 中华人民共和国反外国制裁法.
Available
at:
СПИСОК ЛИТЕРАТУРЫ
Mohamad, R. 2015. Unilateral Sanctions in International Law: A Quest for Legal-
ity. Economic Sanctions under International Law. Ed. by Marossi, A., Bassett, M.
T.M.C. Asser Press, The Hague. 249 p.
Ruys, T., Ryngaert C. 2020. Secondary Sanctions: A Weapon out of Control? The
International Legality of, and European Responses to, US Secondary Sanctions. British
Yearbook of International Law, 116 p.
Meyer J., 2009. Second Thoughts on Secondary Sanctions. University of Pennsyl-
vania Journal of International Law. No. 3. p. 905 - 967.
ИНФОРМАЦИЯ ОБ АВТОРЕ / INFORMATION ABOUT THE AUTHOR
Dmitriy N. ERMAKOV, Doctor of Sci-
ЕРМАКОВ Дмитрий Николаевич,
ences (Politics, Economics), Professor,
доктор политических наук, доктор
Candidate of Sciences (History), Chief
экономических наук, профессор,
Re-searcher at the Center for World Poli-
кандидат исторических наук, глав-
tics and Strategic Analysis Institute of
ный научный сотрудник Центра ми-
33
Ермаков Д.Н., Сыманюк Н.В., Цзяньпин Си. Особенности реализации механизма противодействия …
Ermakov, D.N. Symaniuk, N.V., Jianping Shi Features of the implementation of the mechanism …
China and Modern Asia of the Russian
ровой политики и стратегического
Academy of Sciences.
анализа Федерального государствен-
32 Nakhimovsky Prospekt, Moscow,
ного автономного учреждения науки
117218, Russian Federation.
«Институт Китая и современной
Professor of the Department of Legal
Азии Российской академии наук»
Regulation of Entrepreneurial Activity of
(ФГАУН ИКСА РАН)»
the Financial University under the Gov-
Российская Федерация,
117218, г.
ernment of the Russian Federation
49
Москва, Нахимовский проспект, д.32;
Leningradsky Prospekt, 125993, Moscow,
Профессор Департамента правового
Russia
регулирования экономической дея-
тельности Федерального государ-
ственного образовательного бюд-
жетного учреждения высшего обра-
зования
«Финансовый университет
при Правительстве Российской Фе-
дерации».
Российская Федерация,
125993, г.
Москва, Ленинградский проспект, 49.
Nina V. SIMANYUK, PhD in Law, As-
СЫМАНЮК Нина Васильевна,
sociate Professor of the Department of
кандидат юридических наук, доцент
Theory, Methodology and Legal Support
кафедры теории, методологии и
of Public and Municipal Administration
правового обеспечения государ-
of the Institute of Economics and Man-
ственного и муниципального управ-
agement of the Ural Federal University
ления Института экономики и
named after the First President of Russia
управления Уральского федерально-
B.N. Yeltsin.
го университета имени первого Пре-
19; Mira str., Yekaterinburg, 620002,
зидента России Б.Н. Ельцина, 620002,
Associate Professor of the Shanghai Uni-
Екатеринбург, ул. Мира,
19; адъ-
versity of Political Sciences and Law.
юнкт-профессор Шанхайского уни-
No.7989 Wai Qing Song Road, Qingpu
верситета политических наук и пра-
District, Shanghai City, China.
ва. No.7989 Wai Qing Song Road,
Qingpu District, Shanghai City, China.
Jianping SHI
Цзяньпин СИ
Professor of the Shanghai University of
Профессор Шанхайского универси-
Political Sciences and Law. No.7989 Wai
тета политических наук и права.
Qing Song Road, Qingpu District,
No.7989 Wai Qing Song Road, Qingpu
Shanghai City, China.
District, Shanghai City, China.
Статья поступила в редакцию / Received 31.07.2022.
Поступила после рецензирования / Revised 15.08.2022.
Статья принята к публикации / Accepted 17.08.2022.
34
