President Biden Amends Chinese Military Companies Sanctions
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- On June 3, 2021, President Biden issued a new executive order revising Trump Administration restrictions on Communist Chinese Military Companies under E.O. 13959 and incorporating additional designation authorities. OFAC concurrently removed or replaced all of its related FAQs and issued new FAQs.
- Fifty-nine companies, which are now termed Chinese Military-Industrial Complex Companies, or CMICs, are subject to the new order’s prohibitions, which become effective August 2, 2021. Trading restrictions on securities issued by previously designated companies are eliminated until August 2, when restrictions on the newly listed CMICs will become effective.
- The new order and OFAC’s accompanying guidance address some key issues that existed under the previous E.O. 13959, including by providing that prohibitions apply only to entities with names exactly matching the name of a designated entity (and not to subsidiaries, unless separately designated) and eliminating the requirement that U.S. persons divest their holdings of covered securities.