Officials from China's Ministry of Commerce (MOFCOM) announced on Saturday that the Chinese government is to include foreign companies, individuals and organizations in the "Unreliable Entity List" (UEL) allowing for certain factors.

The Chinese government is moving to work out a UEL for foreign companies that fail to abide by market rules and harm the legitimate rights of Chinese counterparts, according to a MOFCOM statement on Friday.

Entities can end up on the list for the following reasons:

First, when the entity has imposed blockades, blocked supplies, or resorted to other discriminatory measures on Chinese entities.

Second, when the entity's actions are taken for non-commercial reasons and go against market rules and the spirit of the contract.

Third, when the entity's actions have damaged the interests of Chinese enterprises or related industries.

Fourth, when the entity's actions constitute a threat or potential menace to China's national security.

List adjustable, right of self-defense ensured

There will be an inquiry procedure before adding foreign companies to the list, and stakeholders are entitled to defend themselves, said Wang Hejun, head of the treaty and law department of MOFCOM.

Wang noted the list could be adjusted in light of relevant standards, adding the world's second largest economy will spare no efforts to protect foreign companies' legitimate rights and interests, while all lawbreakers shall pay for what they did.

Wang believed restrictive measures in some countries are contrary to WTO rules and the principle of free trade on the one hand and betray the principle of most-favored-nation treatment on the other. 

"Some companies restrict and block transactions with others out of non-commercial purposes, which violates the anti-monopoly law in any country," addressed Wang.

Wang also noted companies could be added to the list individually or with others.

What measures can be imposed?

China will take necessary legal and administrative measures to punish these entities in the list according to the country's laws regarding anti-monopoly, national security and foreign trade.

That being the case, whoever conducts transactions with these listed companies could know in advance and raise their vigilance against unreliable risks.

(Cover: Gao Feng, spokesperson of MOFCOM /VCG Photo)