Current Status of Restrictions on Securities of Chinese Military Companies

As noted in our previous blog post, Executive Order (EO) 13959 introduced novel sanctions prohibiting U.S. persons from purchasing publicly traded securities (debt or equity) issued by companies designated by the U.S. Government as “Communist Chinese military companies” (CMCs), as well as an ill-defined group of securities “designed to provide economic exposure” to the targeted Chinese securities.

These restrictions go into effect on Monday, January 11. While over the last two weeks, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has begun to issue guidance regarding the implementation of EO 13959, significant uncertainties and market confusion remain. This memorandum summarizes the current status.