President Biden Extends National Emergency Banning Investments in PRC-Linked Military Firms – Corporate / Commercial Law
United States: President Biden extends investments banning national emergency in PRC-linked military enterprises
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President Joseph R. Biden extended the state of national emergency declared in Executive Order 13959 and extended in Executive Order 14032 for one year, involving investments related to the People’s Republic of China military. Both orders prohibit US nationals, including financial institutions, from trading in the securities of Chinese companies identified as supporting the PRC’s military, intelligence and security services.
The EO 13959 was signed by former President Donald J. Trump and came into effect on January 11, 2021. As previously stated, the EO prohibited not only âany transaction in publicly traded securitiesâ, but also âAny securities derived from, or are designed to provide investment exposure to, such securities. “
On June 3, 2021, President Biden signed EO 14032, replacing and expanding the scope of the prohibitions in EO 13959 and prohibiting U.S. nationals from engaging in securities transactions with Chinese companies that (i) are identified as operating in the defense of China and related materiel or surveillance technology sector, or (ii) own or control, or are owned or controlled by, such companies.
Extending the national emergency underlying these sanctions, President Biden said the threat of these securities investments which, among other things, fund certain Chinese surveillance technologies, remains “an unusual and extraordinary threat to national security. , foreign policy and the economy of the United States. . “
Comment James Treanor
Following the release of the 2021 Treasury Sanctions Review, covered here, the sanctions policy is under review for evidence that Treasury recommendations are being put into practice. By this extension, it appears that the Biden administration has concluded that sanctions are the “right tool” to deal with the threats identified. Bans on trading in the securities of certain Chinese companies are expected to continue for the foreseeable future.
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