29 December 2020
US strengthens ban on investment in Chinese ‘military' firms
by Jon Grevatt
The US government has firmed up a directive issued in November that bars US investors from acquiring stocks and securities issued by Chinese firms deemed to be linked to the Chinese military.
The US Treasury said in guidance published on 28 December that the ‘executive order 13959’ applies to the subsidiaries of identified Chinese firms and that investments in such companies covers a range of financial instruments including index and mutual funds.
The guidance also provides a new and consolidated list of “Communist Chinese Military Companies” in which US investment is banned.
The US government has strengthened a previously issued directive banning US investment in Chinese companies linked to the People’s Liberation Army. (Getty Images)
The notice, which some news agencies said was published following disagreement between US government agencies over some of the measures contained in the original directive, states that the investment ban applies to “any subsidiary of a Communist Chinese military company, after such subsidiary is publicly listed by [the] Treasury”.
It added that the Treasury “intends to publicly list as subsidiaries” any entity that issues publicly traded securities and is 50% or more owned by a Communist Chinese military company or is “determined to be controlled” by such a firm.
The notice also clarifies that the ban applies to any identified entity “with a name exactly or closely matching” the name listed by the US government as a Communist Chinese military company.
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The US government has firmed up a directive issued in November that bars US investors from acquiring...
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