Beijing [China], May 2 (ANI): In a sharp escalation of trade hostilities, China's Ministry of Commerce (MOC) on Saturday issued a formal blocking measure prohibiting domestic entities from complying with US sanctions, Xinhua reported.

The move specifically protects five major Chinese petrochemical firms recently targeted by Washington for their alleged involvement in the Iranian oil trade.

This marks the first time Beijing has officially invoked its 'blocking statute,' a legal mechanism designed to neutralise the extraterritorial reach of foreign laws, signalling a shift from diplomatic protests to active legal countermeasures.

According to Xinhua, the companies named include Hengli Petrochemical (Dalian) Refining Co., Ltd., Shandong Shouguang Luqing Petrochemical Co., Ltd., Shandong Jincheng Petrochemical Group Co., Ltd., Hebei Xinhai Chemical Group Co., Ltd., and Shandong Shengxing Chemical Co., Ltd.

As per the Chinese MOC, the US measures involve placing the firms on the Specially Designated Nationals (SDN) list, freezing their assets, and restricting transactions with them.

Responding to the sanctions, an MOC spokesperson said the United States has, since 2025, imposed restrictions on the Chinese companies under its executive orders targeting other countries, citing their alleged role in petroleum dealings with Iran, Xinhua reported.

The spokesperson criticised the US actions, stating that such measures improperly restrict normal economic and trade exchanges between Chinese companies and third countries, as well as their citizens and organisations, in violation of international law and basic norms governing international relations.

Last month, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) cautioned global financial institutions about the sanctions risks associated with dealings involving independent Chinese oil refineries, commonly known as 'teapot' refineries, particularly those based in Shandong province.

According to an alert by the OFAC, these refineries continue to play a significant role in importing and processing Iranian crude oil, including throughout 2026.

The OFAC designated the above-mentioned five refineries as part of its enforcement actions.

Before this alert, the OFAC imposed sanctions on 'teapot' refinery Hengli Petrochemical (Dalian) Refinery Co., Ltd., citing its role in purchasing large volumes of Iranian crude oil and petroleum products.

According to the Treasury Department, the refinery is among the major buyers supporting Iran's oil economy, having reportedly purchased billions of dollars' worth of Iranian petroleum.

The Chinese Commerce Ministry further stated that the blocking order was issued in accordance with Beijing's rules on countering the extraterritorial application of foreign laws, to safeguard national sovereignty, security and development interests, and protect the legitimate rights of Chinese entities, as reported by Xinhua.

Reiterating its position, the spokesperson said the Chinese government firmly opposes unilateral sanctions that are not authorised by the United Nations or grounded in international law. (ANI)