On June 3, 2021, US President Joseph Biden issued Executive Order 14032, “Addressing the Threat From Securities Investments that Finance Certain Companies of the People’s Republic of China” (EO 14032), substantially amending the prohibitions originally contained in Executive Order 13959 (EO 13959), issued by President Trump on November 12, 2020 (amended January 13, 2021).
Original EO 13959 prohibited US persons from trading in securities of entities designated by the Department of Defense (DOD) as a Communist Chinese Military Company (CCMC), pursuant to Section 1237 of the Fiscal Year 1999 National Defense Authorization Act (1999 NDAA).
EO 14032 continues to prohibit US persons from trading in securities of listed entities, but replaces the
CCMC list with a new “NS-CMIC” list of entities to be administered by the Department of the Treasury; creates a new substantive test for inclusion in the list, including additional rationale for the prohibition; and clarifies the extraterritorial application of the prohibition, as discussed below. The new substantive test for inclusion on the Treasury NS-CMIC List is of particular importance because it may provide a factual basis to challenge a designation on the NS-CMIC List.
Continue reading here for the rest of our analysis of the EO and assessment on the impact of being designated on a list.
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