Biden Sanctions and Export Control Developments in First 50 Days natlawreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from natlawreview.com Daily Mail and Mail on Sunday newspapers.
To embed, copy and paste the code into your website or blog:
There’s been a non-stop bombardment of recent export amendments involving China and other “countries of concern” within the last six months. The main driver behind these has been the U.S. Government’s concern about the Chinese national strategy of “military-civil fusion” – using civilian companies to help support Chinese military and intelligence activities. It is believed that U.S. companies that have historically sold products to China’s commercial sector may be drawn unwittingly into supporting the Chinese military. While these amendments are principally targeted at China, many also apply to Russia, Venezuela, Hong Kong (now part of China under U.S. export laws), Burma and other countries for similar reasons.
Wednesday, February 17, 2021
This alert addresses recent developments relating to former President Trump s executive orders on Chinese Military Companies that affect both investors in covered securities and exporters.
OFAC s Frequent Asked Questions
On November 12, 2020, former President Trump issued an executive order ( EO ), pursuant to the National Defense Authorization Act for Fiscal Year 1999, as amended ( NDAA ), prohibiting U.S. persons from investing in publicly traded securities of any person designated by the Secretary of Defense or the Secretary of the Treasury as a Communist Chinese military company ( Chinese Military Company ). See our analysis of the Nov. 12 EO
here. Since then, the 2021 National Defense Authorization Act ( 2021 NDAA ) was enacted into law, the EO was amended, the list of Chinese Military Companies expanded, and frequently asked questions promulgated.
GL 1A does
not authorize any transactions involving covered securities of entities listed on OFAC s Non-SDN Communist Chinese Military Companies List (NS-CCMC List) as a subsidiary of a business entity already determined to be a Chinese Military Company.
Expansion of the Definition of the Chinese Military Company
On January 1, 2021, the 2021 NDAA was enacted into law (available
here, the revisions discussed in this alert are in Sec. 1260 H. [pp. 578-79]). The 2021 NDAA significantly expands the definition of Chinese Military Company to include Chinese entities that are identified as military-civil fusion contributors. As revised, the definition of Chinese Military Company includes any entity (natural persons are specifically excluded) that is:
I. Overview
With just one week remaining in his term, President Trump amended Executive Order (“
EO”) 13959, which prohibits U.S. persons from investing in the securities of Chinese Military Companies (“
CMCs”), to continue his aggressive stance toward such CMCs. The amended EO now generally prohibits all transactions (rather than just investments) in CMC securities and requires U.S. persons to divest themselves of all such securities by November 11, 2021, and within 365 days for future listed CMCs. We discussed the earlier version of EO 13959 at length in a previous client alert, and OFAC’s interpretations of key terms (which generally remain valid) in another client alert.