Addressing Securities Investments in Certain Chinese Companies

Jun 7, 2021

Summary

Stops Americans from buying or selling stocks in specific Chinese companies that help China's military or use surveillance to harm human rights.

What problem does this solve?

American money was helping to fund Chinese companies involved in military activities and surveillance that could harm U.S. national security and human rights. This order stops Americans from investing in these companies, cutting off a source of their funding and protecting U.S. interests.

What does this order do?

Prohibits investment in certain Chinese companies

Forbids U.S. persons from buying or selling publicly traded securities of Chinese companies involved in the defense and related materiel sector or the surveillance technology sector.

Expands national emergency to include surveillance tech

Broadens the national emergency declared in Executive Order 13959 to include threats from Chinese surveillance technology used for repression or serious human rights abuses.

Establishes a deadline for selling existing investments

Allows U.S. persons who already own securities in the listed companies to sell them until June 3, 2022, providing a one-year period to divest.

Replaces and revokes previous executive orders

Replaces sections of Executive Order 13959 and completely revokes Executive Order 13974 to create a new, updated framework for these investment prohibitions.

Authorizes adding more companies to the list

Gives the Secretary of the Treasury, in consultation with other departments, the power to add more companies to the list of prohibited investments.

Who does this affect?

U.S. investors and financial institutions
Chinese companies in the defense and surveillance sectors

What is the real world impact?

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Protects U.S. national security

Prevents American investment dollars from supporting the growth of China's military and its surveillance technology sector, which are seen as direct threats to the United States.

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Applies economic pressure on China

Uses financial restrictions as a tool to pressure the Chinese government, aiming to limit the global expansion of its military and technology companies without direct military conflict.

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Could harm U.S. investors and markets

Forces American investors to sell their holdings in listed Chinese companies, which could lead to financial losses. It also risks creating instability in global markets and could lead to China taking similar actions against U.S. companies.

When does this start?

This order sets several different deadlines for stopping investments and selling existing ones.

Ban on new investments begins

Starting August 2, 2021, U.S. persons are prohibited from purchasing or selling securities of the companies listed in the Annex.

Deadline to sell existing investments

U.S. persons have until June 3, 2022, to sell any securities they own in the companies originally listed in the Annex.

Timeline for newly listed companies

For any new companies added to the list, the investment ban begins 60 days after their listing, and the deadline to sell existing holdings is 365 days after.