China Proposes Countermeasure Sanctions Targeting Foreign Misappropriation of Trade Secrets

On October 26, 2026, China's Ministry of Commerce (MOFCOM) released the draft Special Provisions on the Protection of Chinese Trade Secrets. The proposed regulation introduces an administrative countermeasures framework enabling the government to penalize foreign entities, organizations, and individuals whose infringement of Chinese trade secrets harms or threatens national sovereignty, security, or development interests.

Under the draft provisions, MOFCOM would be empowered to impose a range of sanctions. These measures include trade restrictions, export bans, foreign investment prohibitions, entry and work visa bans, and monetary administrative fines. The sanctions may be revoked, suspended, or reduced depending on remedial actions taken by the sanctioned party and subsequent verification by MOFCOM.

The draft rules permit MOFCOM to launch administrative investigations independently or upon reviewing leads and reports submitted by affected domestic commercial entities and third parties. The consultation period for the draft rules remains open for public comment until November 24, 2026.

According to an analysis by law firm Baker McKenzie, the regulatory proposal follows recent U.S. sanctions imposed under the Protecting American Intellectual Property Act against five Chinese enterprises regarding alleged trade secret misappropriation.