This page describes why a jurisdiction appears in published enforcement records and typology reports. It is not an assessment of the country, its government or its businesses. Every jurisdiction listed here is a substantial legitimate economy, and appearing in this reference is usually a consequence of trade volume and connectivity rather than of weak rules.
Why it appears
China appears in the sanctions-evasion record for reasons that have little in common with each other, and the record is clearer if they are kept apart. It is a very large exporter of manufactured goods, so components of every kind pass through it. It is a neighbour of North Korea. And its banks and its informal remittance networks show up in reporting about payments. Each of the three sections below rests on a different document.
As a transshipment point in US export-control alerts
The June 2022 joint alert from FinCEN and the Commerce Department’s Bureau of Industry and Security explains, in a footnote, that BIS “has identified certain common transshipment points through which restricted or controlled exports have been known to pass before reaching destinations in Russia or Belarus”. The list it gives, which it says is “not limited to” those named, contains eighteen jurisdictions, and China is one of them, alongside Armenia, Kazakhstan, Kyrgyzstan, Türkiye and the United Arab Emirates.
The same footnote carries the caveat that matters most for reading it. “In some instances, controlled U.S. items may be legally exported to these and other jurisdictions as inputs for the production of other finished goods”, it says, and it is the further export of the finished goods to Russia or Belarus that “may be prohibited”. A country’s appearance on the list is a statement about routes, not about any company or the country’s own conduct.
The May 2023 supplemental alert describes BIS adding 30 entities under 34 entries to the Entity List on 12 April and 19 May 2023 “as part of a wider third-country crackdown on Russian evasion”. A footnote lists where those entities were located: Armenia, Kyrgyzstan, the People’s Republic of China, Malta, Russia, Singapore, Spain, Syria, Turkey, the United Arab Emirates and Uzbekistan. It does not say how many were in each place. The techniques concerned are described on the pages on third-country transshipment and dual-use re-export.
In North Korean cryptocurrency laundering
The second Multilateral Sanctions Monitoring Team report, on North Korea’s cyber activity, describes a stage that takes place in China. It says that after converting stolen cryptocurrency to USDT, North Korean actors transfer it “to an OTC broker, usually in China”, who takes a cut and separately supplies an equivalent amount of fiat currency (p. 44, Cryptocurrency to Cash Conversion). The same section says they are “highly reliant on Chinese underground banking and China-based facilitators”, and a later section, on underground banking in China, says the country’s formal banks are also relied on to cash out (p. 46). The mechanics are on the pages about crypto rails and informal value transfer.
What the record does not show
None of these documents says that Chinese authorities direct or approve any of this, and this page does not say so either. Both alerts are written about routes and red flags for financial institutions, and the monitoring team’s report is about a specific North Korean revenue scheme. China is also a source and destination for a very large volume of lawful trade in the same goods. Unlike Armenia, Kazakhstan and Kyrgyzstan, China is not in this site’s mirror-statistics analysis, which covers only those three.
For Hong Kong, which sits in a different legal and banking system, see the Hong Kong page.