While the U.S. is a powerful venue for obtaining judgments, enforcing them abroad remains uneven. Many jurisdictions still require parties to fully relitigate, and political tensions can impede cross-border cooperation.
For U.S. creditors with assets located overseas, this creates significant exposure. Practical concerns include:
- Lack of reciprocity treaties with key markets
- Foreign public-policy exceptions that block enforcement
- Reduced cooperation in high-stakes commercial and insolvency cases
- Divergent approaches to punitive damages and discovery
The Chambers Global Practice Guide 2025 reported that foreign judgments (including those from the U.S.) frequently face refusal in Chinese courts due to lack of reciprocity or perceived public-policy conflicts, underscoring the uncertainty creditors face when pursuing cross-border enforcement in non-treaty jurisdictions. China has begun to recognize more foreign judgments but the requirements for doing so are still very stringent.
China will recognize and enforce judgments for three general categories of judgment: de jure reciprocity, consensus-based reciprocity, and diplomatically promised reciprocity. De jure reciprocity applies when the foreign country’s laws permit the recognition and enforcement, while this does not apply between the United States and China, it is the most likely way for US creditors to have their judgments enforced in China. The United States lacks a consensus-based reciprocity with China, as it requires an explicit agreement of reciprocity. Similarly, diplomatic reciprocity does not exist, as it relies on a less tenuous relationship between countries than the US and China currently have.
According to DLA Piper’s Enforcing US Monetary judgments in China: Rules and Cases, while Chinese courts are hesitant to enforce US judgments, they did so for the first time in 2017 and have continued to enforce more judgments in the past few years. The United States in recent years likewise has been enforcing more Chinese judgments to encourage reciprocity, particularly for bankruptcy as more American and Chinese debtors attempt to hide assets overseas.
Transnational Litigation Blog cites two distinct reasons why creditors in China often do not pursue enforcement in foreign countries like the United States. The first being the legal challenges faced by Chinese creditors and US enforcement courts. US enforcement courts often have differing laws when it comes to bankruptcy and insolvency. The other large challenge creditors with Chinese judgments run into is the uncertainty in enforcement. Creditors are often simply unaware that they have recourse once debtor’s transfer assets overseas. Additionally, many are hesitant to invest an unknown amount of time and money into enforcing a judgment they have already litigated. Due to the typical hourly and contingent fee arrangements of the US legal system, fees are unknown to foreign creditors, and they must evaluate enforcement feasibility before commencing litigation in the U.S.
Similarly, US creditors face challenges in Chinese enforcement courts. Among the most impactful of these challenges is when the enforcement court finds that the debtor lacks enforceable assets or the available assets cannot be disposed at that time, the court may simply terminate the enforcement proceedings. Additionally, China has much stricter service-of-process requirements. Articles 299 and 300 of the People’s Republic of China Civil Procedure dictates the service of process requirements for foreign civil cases and mandate the defendant was duly summoned or given a fair chance to be heard.
THCA assists creditors in coordinating multi-jurisdictional litigation and insolvency strategies, ensuring U.S. judgments are positioned for maximum enforceability abroad.
For more information, please contact us at +1 (617) 207-8670 or visit https://thcalaw.com/contact/