OFAC Sanctions Eight Chinese Tech Firms

OFAC sanctioned eight Chinese technology firms for supporting the tracking and surveillance of minority groups in China, including members of the predominantly Muslim Uyghur and Kazakh communities. OFAC placed these companies on the Non-Specially Designated Nationals Chinese Military-Industrial Complex List (the "NS-CMIC List").

According to OFAC, starting in 2016, officials in Xinjiang began targeting the Uyghur community with increased surveillance by installing thousands of new police kiosks and surveillance cameras, and by collecting biometric information, in an effort to "repress members of ethnic and religious minority groups." OFAC cited estimates that, since 2017, authorities have arbitrarily detained between 1 million and 1.8 million members of China's ethnic and religious minority communities in Xinjiang and moved them to "reeducation" centers.

OFAC found that the eight technology companies provided surveillance systems and technology that, among other things:

  • used surveillance cameras to scan exclusively for Uyghurs;

  • alerted authorities when large numbers of people gathered in one area;

  • sent automated alerts to government authorities if it detected, through artificial intelligence, that an individual was ethnically Uyghur;

  • tracked Uyghurs using a combination of facial recognition and GPS technology; and

  • scanned and translated communications in the Uyghur language so that authorities could monitor their content.

As a result of these sanctions, U.S. persons will be prohibited from purchasing the publicly traded securities of these companies and other publicly traded securities that are derivative of, or designed to provide, investment exposure to such securities, beginning 60 days after the addition of the eight companies to the NS-CMIC List. The prohibition will extend to the sale of these securities by U.S. persons following a one-year divestment period.

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