OFAC Issues New Guidance on Sanctions Targeting Communist Chinese Military Companies: OFAC Clarifies the Scope of E.O. 13959 with New FAQs and Issues Communist Chinese Military Companies List

Sullivan & Cromwell LLP - December 31, 2020

In order to clarify the scope of Executive Order 13959, which prohibits U.S. persons from purchasing publicly traded securities of communist Chinese military companies, the Department of the Treasury’s Office of Foreign Assets Control has released new Frequently Asked Questions. OFAC has also issued a list containing the names of entities identified in or pursuant to E.O. 13959 as communist Chinese military companies, along with additional identifying information where possible. The new FAQs address some – but not all – of the significant ambiguities in the text of the Executive Order. These include the extent to which the prohibitions reach subsidiaries of communist Chinese military companies, challenges in identifying companies covered by the order, the definition of “publicly traded securities,” and the application of the Executive Order to investment funds holding covered securities.

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