The Trump administration implemented a security ban to prevent “PLA-linked” Chinese companies from entering the U.S. stock and securities markets, triggering a flurry of lawsuits.
However, the U.S. Department of Justice attorney Joseph Borson said on March 3 that the Biden administration is considering changing this policy and “we are thinking about how to respond to the issues raised by the court’s decision.
The Politico reported that two Chinese companies have filed a lawsuit against the sanctions, seeking to re-list their companies, and the case is being heard in a Washington, D.C., court. One of the companies argued that the Pentagon could not prove the company’s ties to the People’s Liberation Army, which has been used to obtain emergency exemptions, while the other is expected to win its case in the near future.
Judge Rudolph Contreras asked whether the Biden administration is addressing the legal issues raised by the Trump era, and Berson responded that authorities are weighing the need to revise the definition and criteria for “PLA-related enterprises” given that another Chinese company may also be granted immunity.
The Politico also noted that litigation over sanctions against Chinese companies has become a growing problem for the U.S. Justice Department, stemming from a decades-long disagreement between Congress and the executive branch over how to combat China. Roger Robinson, president and CEO of the Washington, D.C.-based RWR Advisory Group, which specializes in China’s involvement in U.S. capital markets, noted that “these cases may be seen by some as precedent,” but that Biden could limit the impact of the lawsuit through an executive order, and the situation could change dramatically if the rules for the ban were made clear.
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