24 August 2026
Executive Summary
Cross-border companies increasingly face a difficult risk that conventional compliance programmes are poorly designed to handle:
What happens when complying with one country’s regulator could mean breaking another country’s rules?
China’s Ministry of Justice has ordered Chinese organisations and individuals not to assist with certain information requests connected to the European Union’s investigation into Chinese e-commerce company JD.com’s proposed acquisition of German electronics retailer Ceconomy.
The European Commission is examining the approximately $2.5 billion transaction under the EU Foreign Subsidies Regulation, including whether foreign subsidies could distort competition within the European market.
China regards aspects of the EU’s information demands as improper extraterritorial jurisdiction and has instructed domestic entities not to execute or assist with those measures.
That creates an extraordinary corporate risk:
The same request for information can potentially create a compliance obligation in one jurisdiction and a prohibition in another.
UK Impact
UK multinationals increasingly operate between regulatory systems covering:
- Sanctions.
- Competition law.
- Data protection.
- Export controls.
- National security.
- Foreign investment.
- Financial regulation.
- Anti-bribery investigations.
A British parent company may receive a lawful request from a UK, European or US regulator seeking information held by an overseas subsidiary.
The overseas subsidiary may be restricted from providing it.
That means the normal instruction:
“Cooperate fully with the regulator.”
may no longer be sufficient.
Global Impact
China’s intervention is particularly significant because it represents only the second use of its expanded framework for countering what Beijing regards as unlawful extraterritorial jurisdiction. The first involved an EU investigation into Chinese security-equipment company Nuctech.
The broader trend extends beyond China and Europe.
Governments increasingly assert jurisdiction over:
- Data located overseas.
- Foreign subsidiaries.
- Cross-border acquisitions.
- Technology transfers.
- Sanctions compliance.
- Supply chains.
Multinationals can therefore find themselves caught between sovereign legal systems that disagree over whose law should take precedence.
Our View
Multinationals should establish a formal process for dealing with conflicting legal obligations.
Companies should ask:
- Where is requested information physically located?
- Which legal entity controls it?
- Can that entity legally transfer the information overseas?
- Does another jurisdiction prohibit cooperation?
- Is government approval required?
- Are sanctions or blocking statutes relevant?
- Who decides when external counsel must become involved?
- Can information be provided through an alternative lawful mechanism?
- Are subsidiaries trained not to respond independently to foreign regulators?
- Can contractual confidentiality obligations be overridden?
- Does the board understand competing-jurisdiction risk?
- Is there a documented escalation process?
International compliance increasingly cannot be treated as a single-direction exercise.
Sometimes the hardest question is not:
“How do we comply with the law?”
It is:
“How do we comply when two legal systems require different things?”
Risk Indicator: HIGH – CROSS-BORDER COMPLIANCE
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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