China is increasingly barring people from leaving the country, including foreign executives and regular Chinese citizens embroiled in financial disputes. A new report by rights group Safeguard Defenders finds an apparent surge in court cases involving such bans in recent years, with foreign business lobbies voicing concern about this growing trend.
According to a Reuters analysis of records on exit bans from China's Supreme Court database, there has been an eight-fold increase in cases mentioning the bans between 2016 and 2022. Last week, China strengthened its counter-espionage law allowing exit bans to be imposed on anyone – Chinese or foreign – under investigation. The European Union Chamber of Commerce expressed concerns over these developments and has sought advice on how to prepare for and reduce risks associated with exit bans.
Safeguard Defenders' latest report revealed that China increased the use of exit bans against human rights defenders and their families. At least 15 laws and legal instruments now cover them. The Supreme People's Court database holds information on millions of potentially affected individuals; however, it can take up to two years for data to be uploaded.
The report also highlighted the case of Irish executive Richard O'Halloran who was prevented from leaving China for nearly three years between 2019 and 2022 due to a civil business dispute. In conclusion, it stated that at least 41 foreign businesspeople had been subjected to exit bans in China as a result of civil disputes.
Peter Dahlin, director at Safeguard Defenders said: "The use of these measures poses significant challenges not only for those directly affected but also raises questions about fair trials."
Many international companies are becoming increasingly concerned about this issue as it affects their ability to conduct business effectively within Chinese borders without fear that employees may face restrictions when attempting to leave the country.
Caroline Berube, managing partner of HJM Asia Law & Co, shared her concerns: "Exit bans have a chilling effect on foreign businesspeople in China. There should be more transparency and due process to ensure that businesses can operate without fear."
As the trend of exit bans continues to rise, it remains crucial for foreign businesses and individuals to remain vigilant and take necessary precautions when involved in financial disputes or any other legal matters within China's jurisdiction.