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Financial Services Law Insights and Observations

OFAC issues FAQs related to securities investments in Chinese military companies

Financial Crimes China Of Interest to Non-US Persons Department of Treasury OFAC OFAC Sanctions OFAC Designations

Financial Crimes

On June 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published three new frequently asked questions related to the Chinese military-industrial complex sanctions. As previously covered by InfoBytes, Executive Order 13959, as amended, addressed threats from securities investments that finance Communist Chinese military companies. The FAQs address questions pertaining to (i) whether U.S. financial institutions are required to block the attempted purchase or sale of covered securities after the relevant 365-day divestment period; (ii) whether U.S. financial institutions are permitted to process transactions for holders of covered securities related to stock splits, cash dividends, or dividend reinvestments; and (iii) whether U.S. persons are required to divest their holdings of covered securities before the end of the relevant 365-day divestment period.