White House issued executive order to address US securities investments into PRC firms, in order to address surveillance technology threat, military-industrial complex.
EO allows the US to prohibit – in a targeted and scoped manner – US investments in Chinese companies that undermine the security or democratic values of US, allies.
Follows Trump administration EO 13959 focusing on PRC military firms, see #90714.
Annex to EO 13959 is replaced and superseded in its entirety by Annex to new order.
In addition to EO, White House released fact sheet outlining aims, identified PRC firms.
Combatting PRC Military-Civil Fusion Strategy
EO imposes restrictions on investments in Chinese defense and surveillance tech firms.
Prohibits US persons from purchase/sale of securities to identified firms, and those the US federal government deems to operate in PRC surveillance, defense, materiel sector.
Goal to address PRC military-civil fusion strategy to use tech sector to advance economic/military agenda; EO also seeks to ensure US firms do not indirectly/directly abet surveillance threat, through capital flow to firms tied to PRC military/intelligence.
Prohibited Companies
The executive order lists fifty-nine entities as being subject to the EO’s prohibitions.
Order also indicated that OFAC will separately list these 59 entities on its new Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List).
Effectiveness
Per fact sheet, the prohibitions against the entities listed in the Annex to this EO shall take effect beginning at 12:01 a.m. eastern daylight time on August 2, 2021.
Jun. 2021 OFAC List and FAQ
On Jun. 3, 2021, OFAC issued release on new executive order addressing the threat from securities investments that finance certain companies of China (aka PRC).
OFAC also added companies to its NS-CMIC List list and published FAQs, see #107212.
Jun. 4, 2021 China Response
On Jun. 4, 2021, CHI GVT said it firmly opposes Biden's blacklisting of Chinese firms.
Ministry of foreign affairs spokesperson Wang Wenbin said the action undermines rules and order of the market, and harms interests of Chinese firms and global investors.
Urged the US to respect market principles, withdraw the blacklists, and provide a fair, just and non-discriminatory business and investment environment for Chinese firms.
China will take necessary measures to safeguard rights and interests of Chinese firms.
Jun. 7, 2021 EO Federal Register
On Jun. 7, 2021, White House published EO 14032, addressing threat from securities investments that finance certain companies of the People's Republic of China.
Nov. 7, 2021 White House Continuation
On Nov. 9, 2021, White House issued letter to House Speaker, Senate President, to provide notice of continuation of national emergency for 1 year beyond Nov. 12, 2021.
Continued national emergency declared in EO 13959, expanded in scope by EO 14032.
Nov. 10, 2021 Fed Reg
On Nov. 10, 2021, White House published notice of continuation in federal register.
Nov. 8, 2022 White House Continuation
On Nov. 8, 2022, White House issued continuation of national emergency with respect to securities investments that finance certain companies of PRC, until Nov. 12, 2023.
Nov. 10, 2022 Fed Reg Continuation
On Nov. 10, 2022, White House published notice of continuation in the federal register.
Nov. 3, 2023 White House Continuation
On Nov. 3, 2023, White House issued continuation of national emergency with respect to securities investments that finance certain companies of PRC, until Nov. 3, 2024.
Nov. 7, 2023 Fed Reg Continuation
On Nov. 7, 2023, White House published notice of continuation in the federal register.
