The U.S. Treasury Department on Tuesday (May 18) issued an announcement delaying again the effective date of a ban on investments in certain Chinese companies and their subsidiaries with Communist Party military affiliations, Voice of America reported.
The Treasury Department’s Office of Foreign Assets Control (OFAC) in January extended the effective date of the ban on investments in certain Chinese companies and their subsidiaries with Communist Party military affiliations to May 27 and on Tuesday extended the effective date to June 11.
The Office issued General License 1B, which “authorizes transactions involving the securities of certain Communist Chinese military enterprises,” i.e., all transactions and activities prohibited by Executive Order 13959, as amended in January 2021 by Executive Order 13974, involving investments in listed securities with similar, but not identical, names. publicly traded securities of CCP military enterprises, or derivatives of such securities, or investments designed to provide exposure to such securities, are permitted until June 11, 2021.
However, this permission does not apply to the securities trading activities of Chinese military enterprises and their subsidiaries that are on the sanctions list, including CNOOC Limited, China Mobile, China Telecom, and China Unicom (Hong Kong) Limited, entities added to the sanctions list on January 8, 2021.
Former U.S. President Donald Trump issued an executive order on Nov. 12 of last year, announcing a ban on U.S. companies and individuals from investing in 31 companies that the U.S. Department of Defense has designated as “Communist Chinese military companies” beginning Jan. 11 of this year.
The U.S. believes that these companies, which have ties to the Communist Chinese military and intelligence agencies, are threatening U.S. security by going public in the U.S. stock market to raise funds for the modernization of the Communist Chinese military. The Trump administration reinforced the executive order on Dec. 28 last year, making the investment ban applicable to “any subsidiary of a Chinese Communist Party military company.
The Biden administration is still considering various Trump administration policies on China.
Xiaomi, a Chinese cell phone maker listed by the Department of Defense as a company involved in the Chinese Communist Party’s military, reached a settlement with the Pentagon last week in which the U.S. agreed to no longer list Xiaomi as a company involved in the Chinese Communist Party’s military.
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