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Financial Services Law Insights and Observations

OFAC adds regulations on Chinese military companies and WMDs

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

Financial Crimes

On February 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it is adding regulations to implement a November 2020 Executive Order (E.O.), which is related to securities investments that finance Communist Chinese military companies, as amended by a June 2021 E.O. related to the Chinese military-industrial complex and Chinese surveillance technology. As previously covered by InfoBytes, President Biden issued E.O. 14032, “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies.” The E.O. took additional steps pursuant to the national emergency declared pursuant to E.O. 13959 (covered by Infobytes here), including the threat posed by the military-industrial complex of the People’s Republic of China (PRC) and “its involvement in military, intelligence, and security research and development programs, and weapons and related equipment production under the PRC’s Military-Civil Fusion strategy.” According to OFAC, with respect to the recent regulations, the agency “intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive guidance and definitions, general licenses, and other regulatory provisions.” The regulations took effect February 16.

Additionally, OFAC announced that it is publishing an amendment to the Weapons of Mass Destruction Proliferators Sanctions Regulations “to revise an existing general license authorizing the provision of certain legal services and add a general license authorizing payments for legal services from funds originating outside the United States.” (Covered by InfoBytes here.) The amendment also took effect February 16.