During an official visit to China on November 1, a delegation from the Russian Federation Council held talks. Lawmaker Andrey Denisov stated that Russian and Chinese parliamentarians are discussing the formulation of a joint regulatory framework to mitigate pressure stemming from unlawful sanctions. The delegation is led by Valentina Matviyenko, Chairwoman of the Federation Council (Upper House of the Russian Federal Assembly), according to a November 1 report from Sputnik News in Moscow.

In an interview, Denisov remarked: “Both China and our country are facing unlawful sanctions to varying degrees. We believe such sanctions amount either to economic protectionism or politically motivated restrictive measures. In response to these hostile acts against our nations, we need to put in place a certain regulatory framework.” He also stressed that retaliatory measures must be crafted prudently so as not to harm international trade. In his view, tit-for-tat reciprocal countermeasures risk setting dangerous precedents and could negatively impact economic ties with third countries.

Every phrase in these remarks merits close scrutiny. The reference to “establishing a regulatory framework”, rather than “imposing retaliation”, points to domestic legal instruments instead of direct reciprocal penalties. The framing that “China and we both face unlawful sanctions” places Russia and China in the same predicament, an uncommon positioning in economic and trade negotiations. The concern over spillover effects on third countries highlights the biggest risk of such countermeasures: once export controls, licensing approvals and investment reviews are weaponized, third-party traders and financial institutions will bear the brunt first.

For enterprises operating across China and Russia, the concrete form of this regulatory framework carries greater practical significance than political statements. Relevant tools already exist within the two countries’ current legal systems: export licensing and dual-use item controls, investment screening, bank payment refusals and secondary sanction risks arising from sanctions compliance, as well as exclusion clauses in state-owned enterprise procurement. If the bilateral discussions focus on mutual recognition or information exchange concerning these tools — for instance, cross-border recognition of sanctioned entity lists, licensing status and law enforcement rulings — compliance standards for Chinese-funded banks, freight forwarders, insurance carriers and overseas investment structures will become more consistent, raising predictability for cross-border transactions.

By contrast, if the talks shift toward rigid reciprocal restrictions, corporate compliance costs will surge immediately. Bilateral trade between China and Russia has exceeded USD 200 billion annually for many consecutive years, with highly intertwined industrial chains. Any tightening of licensing, foreign exchange settlement, technology exports or investment screening by either side will spill over to normal commercial activities via third-party banks and logistics hubs. Denisov’s caution against tit-for-tat measures is exactly a description of this transmission mechanism.

Regardless of whether the joint framework is finalized, businesses can start building interoperable compliance systems right now. Four sets of information must be traceable internally: contracting parties, transaction routes, licensing responsibilities and end-user verification. Enterprises should align the classification of the same transaction under the regulatory regimes of both countries, avoiding discrepancies where an activity requires licensing in one jurisdiction but is deemed fully compliant in the other. Full documentary trails must be retained for cross-border payments to address prudential checks by banks referencing sanction lists and licensing requirements from either country. These three measures will bring competitive advantages if the framework is adopted, and serve as basic compliance safeguards if negotiations stall.

It should be noted that public information remains limited to parliamentary statements. The Sputnik report does not specify concrete mechanisms, participating agencies, timelines or legal formats, and Russia has not released any joint documents. It remains to be seen whether the institutional dialogue between the two legislatures will evolve into formalized arrangements.

Source: Sputnik News, Russian and Chinese Parliamentarians Discuss Options to Counter Sanctions, Moscow, November 1, 2026; Chinese version released November 2, 2026.

This material is for information only and does not constitute legal advice.