OFAC Issues New Guidance on Chinese Military Companies Sanctions
OFAC clarified in new FAQ 862 that Executive Order ("EO") 13959 does not require U.S. persons to divest their holdings in the publicly traded securities of identified Communist Chinese military companies by January 11, 2021.
The OFAC guidance also applies to holdings in securities that are derivative of, or designed to provide investment exposure to, such publicly traded securities. As previously covered, EO 13959 generally prohibits U.S. persons, including financial institutions, from engaging in transactions in these securities beginning on January 11, 2021, with a limited exception for transactions to divest holdings until November 11, 2021.
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OFAC issued five FAQs regarding Communist Chinese military companies sanctioned under Executive Order 13959, as well as a list of such identified entities.
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In a new Executive Order, President Donald J. Trump prohibited U.S. persons, including financial institutions, from engaging in transactions in the securities of Chinese companies that supply or otherwise support China's military, intelligence and security services.
