United States of America

United States of America

Extension of an existing investment ban for U.S. citizens in certain Chinese companies

02 Aug 2021

On June 3, 2021, the Government issued an executive order enacting a prohibition on investment by U.S. nationals in several Chinese companies operating in the surveillance technology sector.

The Executive Order expands the scope of a previous ban, enacted on November 2020, which targeted companies owned or controlled by the Chinese military.

The new regulation redefines the scope of the investment ban to cover companies related to China's defense and surveillance technology sector. It prohibits U.S. persons from purchasing or selling publicly traded securities of the targeted entities, or any derivative instruments that could provide investment exposure to the aforementioned securities.

As a result, 59 companies covered by the measure are listed in the annex to the order. Chinese telecom companies unrelated to Chinese military, which were covered by the previous order, have been removed from the list.

The executive order provides a one-year deadline for divestment by U.S. persons who hold investments in the covered companies. The executive order will go into effect on August 2, 2021.