White House EO Investment in China


On Jun. 3, White House issued EO on US investment in China firms.


  • 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  • Annex to EO 13959 is replaced and superseded in its entirety by Annex to new order.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.

Regulators CHI GVT; White House
Entity Types B/D; Bank; Corp; Exch; SIFI
Reference 88 FR 76987, 11/7/2023; Lt, Nt, 11/03/2023; 87 FR 68017, 11/10/2022; Lt, Nt, 11/8/2022; 86 FR 62711, 11/10/2021; Lt, Nt, 11/9/2021; 86 FR 30145, 6/7/2021; PR 6/4/2021; Lt, EO 14032, Info, 6/3/2021; EO 13959, 11/12/2020;
Functions AML; Compliance; Financial; Operations; Sanctions; Technology; Trading
Countries China; United States of America; Cross-Border
Category
State
Products Banking; Equity; Loan; Private Placements; Securities
Regions Am
Rule Type Final
Rule Date 6/3/2021
Effective Date 11/3/2024
Rule Id 107183
Linked to Rule :90714
Reg. Last Update 11/7/2023
Report Section AML & Enforcement

Last substantive update on 11/08/2023