OFAC Updates Regulations on China Sanctions
The Office of Foreign Assets Control is adding regulations to implement a pair of executive orders from November 2020 and June 2021 related to securities investments that finance Communist Chinese military companies. The regulations prohibit the purchase or sale of securities with any of the listed people or entities. In addition, the secretary of the treasury can designate further entities that have operated in the defense, surveillance, or related sectors of the Chinese economy.
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The two orders note that the People’s Republic of China is increasingly exploiting U.S. capital to enable the development and modernization of its military and intelligence capabilities. The prohibitions against engaging commercially and financially with Chinese businesses and personnel in these sections is intended to slow down Chinese technological development.
These regulations are being published in abbreviated form for the purpose of "providing immediate guidance to the public." OFAC intends to supplement these regulations with a more comprehensive set which "may include additional interpretive guidance" in addition to definitions, general licenses, and related materials.
OFAC will also amend the Weapons of Mass Destruction Proliferators Sanctions Regulations effective Feb. 16 to revise an existing general license authorizing the provision of certain legal services on behalf of persons whose property and interests in property are blocked. The amendment will also add a general license authorizing payments for legal services from outside the U.S. As the regulations involve a foreign affairs function, no prior notice was required.