By Aaron Nicodemus2020-12-21T17:29:00+00:00
President Donald Trump signed into law a measure that will kick publicly traded Chinese companies off U.S.-based exchanges if they refuse to allow U.S. regulators to examine their finances.
Called the “Holding Foreign Companies Accountable Act,” the new law (S.945) will delist a foreign-owned company that refuses to comply with the U.S. Public Company Accounting Oversight Board’s (PCAOB) audit requirements for three consecutive years.
Congress passed the bill with strong bipartisan support earlier this month. Trump signed the bill into law Friday.
“Taking this action is crucial to hold Chinese companies accountable and to safeguard the millions of American families who rely on modest investments to retire, send their kids to college, and weather financial emergencies,” Sen. Chris Van Hollen (D-Md.), who co-authored the legislation in the Senate, said in a statement.
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Chinese companies have refused to provide audit reports in the past, claiming their audits are conducted by non-U.S. public accounting firms and cannot be shared with American regulators.
Administration officials familiar with the legislation said several senior officials opposed the new law and urged Mr. Trump to veto the bill, arguing that keeping Chinese companies inside U.S. markets could prevent them from investing in other foreign markets.
One of those who opposed enacting the legislation was Treasury Secretary Steven T. Mnuchin, a former Goldman Sachs investment banker.
Two officials said Mr. Mnuchin has been a frequent critic of Mr. Trump’s hardline policies toward China and in the past has sought to soften new policies toward Beijing over concerns they would upset trade and financial relations.