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Financial Services Law Insights and Observations

OFAC issues FAQs on E.O. prohibiting investments supporting Chinese military companies

Financial Crimes OFAC China Of Interest to Non-US Persons Sanctions

Financial Crimes

On December 28, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published FAQs covering Executive Order (E.O.) 13959, “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies.” As previously covered by InfoBytes, the E.O. generally prohibits “any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Chinese military company. . .by any US person.” The E.O. establishes the deadlines for divestment of investments in companies currently listed as Chinese military companies as well as companies that later may be added to the list of Chinese military companies pursuant to Section 1237, or those that the Secretary of the Treasury publicly lists as meeting the criteria set forth in Section 1237(b). In addition to the FAQs, OFAC published a list of the entities identified pursuant to the E.O. as Communist Chinese military companies, along with additional identifying information.

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