Requests for information sent to Chinese banks in the context of an EU Foreign Subsidies Regulation (FSR) probe into Nuctech triggered a Chinese government non-cooperation order, according to two sources familiar with the matter.

The European Commission (EC), which is running an in-depth FSR probe into the Chinese security equipment provider Nuctech, asked Chinese banking institutions for information related to the company’s financing, including specific requests regarding loans and interest rates, the first source said.

Some of these requests were directed to Chinese banks present in Poland, but recently the Commission also asked at least one Chinese bank to provide information stored in China as to its interest rate package offered to clients other than Nuctech, the second source said. National banking entities consider this information confidential, the source added.

Upon these requests, the banks were “puzzled”, according to the second source. These entities thought the Commission had “gone too far”, the second source said.

On 15 May, China’s Ministry of Justice (MoJ) published a non-cooperation order, in which the regulator said the EC’s cross-border investigative measures imposed on Chinese entities in its FSR investigation into Nuctech constituted “an inappropriate extraterritorial jurisdiction measure” and instructed all Chinese entities and individuals not to execute or facilitate the execution of such measures.

Then on 16 May, China’s Ministry of Commerce (MOFCOM) published a press Q&A on its website, in which the regulator said the EC had compelled Chinese banks to cooperate and unreasonably demanded submission of extensive information stored in China that was unrelated to the Nuctech probe. The conduct had severely jeopardized multiple Chinese companies’ and banks’ normal business operations in the EU, the regulator said. The non-cooperation order was made by the MoJ and MOFCOM together.

This was the second blocking order in history from the Chinese government over foreign countries’ extraterritorial jurisdiction, a Chinese competition law partner said.

The first was MOFCOM’s blocking order on 2 May 2026 that prohibits the implementation of sanctions by the US Department of the Treasury’s Office of Foreign Assets Controls on five Chinese companies for their alleged involvement in Iranian oil transactions.

These two recent moves showcased the Chinese government’s willingness to take a stronger stance in the handling of international trade disputes, the Chinese lawyer said.

Notably, in the EU’s anti-subsidy probes into Chinese companies, sending requests for information to Chinese banks and other relevant entities is a commonly used investigation measure, the Chinese lawyer added.

But the key difference here is that the EU’s anti-subsidy rules do not include monetary penalties for third parties who do not cooperate, while the FSR gives the EC the power to impose “fines or periodic penalty payments” on any relevant party – not necessarily the company being probed, making the cooperation a “must”, the Chinese lawyer said.

The compulsory nature of the EC’s FSR requests for information could be the reason behind the MoJ and MOFCOM’s order, the Chinese lawyer argued.

Effects beyond Nuctech

This order only seems to cover the sharing of information in the context of the EC’s investigation into Nuctech, according to the two sources familiar with the matter. However, it is a reaction to FSR enforcement beyond this case, the first source said.

The Commission has also opened an in-depth ex officio probe into the Chinese wind turbine manufacturer Goldwind, and it conducted dawn raids at the European premises of Temu. On top of that, all of its FSR in-depth investigations in public procurement have targeted Chinese companies.

The Chinese lawyer flagged that such issuance of a non-cooperation order does not have to be prompted by any party, and the Chinese ministries can proactively look for such unlawful measures and issue orders. This, according to the lawyer, is according to the legal basis of the non-cooperation order – a new administrative regulation promulgated by China’s State Council on 7 April named “Rules on countering foreign states’ unlawful extraterritorial jurisdiction measure”.

A Brussels competition partner with FSR experience said that the Chinese government’s move will have “ripple effects” on other cases. Among Chinese companies, there are different views on whether this stance is desirable or not. Some of them want to keep a good relationship with the Commission because they need to engage with the regulator on many matters, the lawyer said.

According to the same lawyer, the situation raises legal and political questions, such as whether the EC would impose non-compliance fines to companies when the alternative for them is to face criminal charges in China.

For Nuctech, the company still needs to better understand the scope of the order, and whether it prevents it from providing information voluntarily to the EC or not, the first source said. Depending on the sort of information required, the company may ask Chinese authorities to grant waivers, the source added.

For other Chinese companies, now that precedent has been established, such an order could be deployed in future cases under different contexts, said Howard Chan, Of Counsel at Herbert Smith Freehills Kramer.

Yet, Chinese companies are still seeking clarity on the order, the first source said. Non-compliance could “backfire” because if the entities do not provide information, the EC can base its findings on “facts available”, such as the information that it received from other sources which may come from complainants, the source added.

According to the source, this approach may also backfire in merger cases, because the EC could simply withhold approval.

In other words, “you don’t win a merger case against the EC, you win it with the EC”, the competition partner said.

An EC spokesperson said that requests for information are “standard measures in Commission investigations across competition instruments”, and that the FSR “does not distinguish between companies based on their nationality or ownership and is consistent with the EU’s international obligations”.

Nuctech said in an emailed statement that throughout the process, the company has remained “committed to cooperating constructively with the Commission”, and it maintains that “investigations should be conducted fairly, proportionately, and in line with applicable international and national legal frameworks”.

China’s MoJ and MOFCOM do not comment on ongoing matters.