Executive Order 13959

Last updated
Executive Order 13959
Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies
Seal of the President of the United States.svg
Type Executive order
Executive Order number13959
Signed by Donald Trump on November 12, 2020 (2020-11-12)
Federal Register details
Federal Register document number 2020-25459
Publication dateNovember 17, 2020 (2020-11-17)
Document citation85 FR 73185

Executive Order 13959 is a U.S. Presidential Executive Order signed on November 12, 2020, by President Donald Trump. Its title, and stated goal, is "Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies."

Contents

A related Executive Order 14032 ("Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China") was signed by President Joe Biden on June 3, 2021. The national emergency declared by E.O. 13959 remains in effect and has been expanded by E.O. 14032.

Prohibiting investment in "Communist Chinese military companies"

The executive order prohibits all U.S. investors (institutional and retail investors alike) from purchasing or investing in securities of companies identified by the U.S. government as "Communist Chinese military companies". [1] [2] A "Communist Chinese military company" is any company that the U.S. Department of Defense has identified pursuant to Section 1237 of the National Defense Authorization Act for Fiscal Year 1999. The prohibition came into effect on January 11, 2021. [3] On December 28, 2020, guidance on the executive order was published clarifying that the order included subsidiaries of the relevant companies. [4] [5] On January 13, 2021, President Trump strengthened the executive order's requirements by issuing Executive Order 13974 ("Amending Executive Order 13959—Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies"), which mandated divestment by November 11, 2021. [6]

List of affected companies

Initially, 31 companies were identified, including two companies whose shares were traded on U.S. exchanges. These include companies in aerospace, shipbuilding, construction, technology and communication industries.

On December 3, 2020, the Department of Defense designated four additional companies as owned or controlled by the Chinese military, taking the total number of affected companies to 35. [7]

On January 14, 2021, the Department of Defense designated nine additional companies as owned or controlled by the Chinese military, taking the total number of affected companies to 44. [8]

Delistings

As a consequence of the executive order, the New York Stock Exchange in January ended trading of shares in China Mobile, China Telecom and China Unicom, [9] and announced in late February that trading in CNOOC would also cease on March 9, 2021. [10]

See also

Related Research Articles

<span class="mw-page-title-main">Norinco</span> Chinese state-owned defense company

China North Industries Group Corporation Limited, doing business internationally as Norinco Group, and known within China as China Ordnance Industries Group Corporation Limited, is a Chinese state-owned defense corporation that manufactures commercial and military products. Norinco Group is one of the world's largest defense contractors.

The Committee on Foreign Investment in the United States is an inter-agency committee in the United States government that reviews the national security implications of foreign investments in U.S. companies or operations, using classified information from the United States Intelligence Community.

<span class="mw-page-title-main">Semiconductor Manufacturing International Corporation</span> Chinese semiconductor foundry

Semiconductor Manufacturing International Corporation (SMIC) is a partially state-owned publicly listed Chinese pure-play semiconductor foundry company. It is the largest contract chip maker in mainland China.

Inspur Group is an information technology conglomerate in mainland China focusing on cloud computing, big data, key application hosts, servers, storage, artificial intelligence and ERP. On April 18, 2006, Inspur changed its English name from Langchao to Inspur. It is listed on the SSE, SZSE, and SEHK.

The China Academy of Launch Vehicle Technology (CALT) is a major state-owned civilian and military space launch vehicle manufacturer in China and one of the major launch service providers in the world. CALT is a subsidiary of the larger China Aerospace Science and Technology Corporation (CASC). It was established in 1957 by Dr. Xue-Sen Qian and is headquartered in Fengtai District, Beijing.

<span class="mw-page-title-main">China Aerospace Science and Technology Corporation</span> Chinese state-owned defense and aerospace company

The China Aerospace Science and Technology Corporation (CASC) is a main contractor for the Chinese space program. It is state-owned and has subsidiaries which design, develop and manufacture a range of spacecraft, launch vehicles, and ground equipment. It also has a division for strategic and tactical missile systems.

<span class="mw-page-title-main">China National Nuclear Corporation</span> Chinese nuclear energy and weapon manufacturer

The China National Nuclear Corporation is a state-owned enterprise founded in 1955 in Beijing. CNNC's president and vice-president are appointed by the Premier of the People's Republic of China. CNNC oversees all aspects of China's civilian and military nuclear programs. According to its own mission statement, it "is a main part of the national nuclear technology industry and a leading element of national strategic nuclear forces and nuclear energy development."

<span class="mw-page-title-main">China State Shipbuilding Corporation</span> Largest shipbuilders in China

The China State Shipbuilding Corporation (CSSC) is a Chinese shipbuilding conglomerate.

<span class="mw-page-title-main">China Shipbuilding Industry Corporation</span> Chinese shipbuilding conglomerate

The China Shipbuilding Industry Corporation (CSIC) was one of the two largest shipbuilding conglomerates in China, the other was the China State Shipbuilding Corporation (CSSC). In 2019, CSIC was merged into CSSC.

The China Academy of Space Technology (CAST) is a Chinese space agency and subordinate of China Aerospace Science and Technology Corporation (CASC). The agency was founded on 20 February 1968, and is the main spacecraft development and production facility in China. On 24 April 1970, CAST successfully launched China's first artificial satellite Dong Fang Hong I.

<span class="mw-page-title-main">China Aerospace Science and Industry Corporation</span> Chinese state-owned defense company

The China Aerospace Science and Industry Corporation (CASIC) is a Chinese state-owned enterprise that designs, develops and manufactures a range of spacecraft, launch vehicles, strategic and tactical missile systems, and ground equipment. CASIC is the largest maker of missiles in China.

<span class="mw-page-title-main">Aviation Industry Corporation of China</span> Chinese aerospace and defense manufacturer

The Aviation Industry Corporation of China (AVIC) is a Chinese state-owned aerospace and defense conglomerate headquartered in Beijing. AVIC is overseen by the State-owned Assets Supervision and Administration Commission of the State Council. It is ranked 140th in the Fortune Global 500 list as of 2021, and has over 100 subsidiaries, 27 listed companies and 500,000 employees across the globe. AVIC is also the sixth largest defense contractor globally as of 2022 and second largest Chinese defense contractor with total revenue of $79 billion

The China Ordnance Equipment Group Corporation, also known as China South Industries Group Corporation, is a Chinese state-owned manufacturer of automobiles, motorcycles, firearms, vehicle components, and optical-electronic products and other special products domestically and internationally. The company was founded in 1999 and is based in Haidian District, Beijing. CSGC is the parent company of Changan Automobile.

<span class="mw-page-title-main">China National Offshore Oil Corporation</span> Chinese national oil company

China National Offshore Oil Corporation, or CNOOC Group, is the third-largest national oil company in China, after CNPC and China Petrochemical Corporation. The CNOOC Group focuses on the exploitation, exploration and development of crude oil and natural gas in offshore China, along with its subsidiary COOEC.

The China Three Gorges Corporation is a Chinese state-owned power company, established on 27 September 1993. The company was responsible for the construction of the Three Gorges Dam-project, the world's largest hydroelectric power plant, that went into operation in 2008. In September 2002, CTG established the subsidiary company China Yangtze Power, which took over operations and management of Gezhouba and Three Gorges dams. CTG is one of the world's largest energy companies with total assets of RMB 475.5 billion in 2014. Other than hydroelectric dams, the company also operates onshore and offshore wind farms.

<span class="mw-page-title-main">China Electronics Technology Group Corporation</span> Chinese state-owned electronics company

China Electronics Technology Group Corporation is a Chinese state-owned company established in 2002. Its fields include communications equipment, computers, electronic equipment, IT infrastructure, networks, software development, research services, investment and asset management for civilian and military applications. It was founded with the stated goal of leveraging civilian electronics for the benefit of the People's Liberation Army.

Aero Engine Corporation of China (AECC) is a Chinese state-owned aerospace manufacturer focused on the design and development of aeroengine and related technology, comprising 46 affiliated companies including engine manufacturers, institutions and aero-engine factories. The company was established on August 28, 2016. At launch, AECC was to be capitalized with US$7.5 billion by Aviation Industry Corporation of China (AVIC) and Commercial Aircraft Corporation of China, Ltd. (COMAC), China's two main state aerospace companies.

FTSE Russell is a subsidiary of London Stock Exchange Group (LSEG) that produces, maintains, licenses, and markets stock market indices. The division is notable for the FTSE 100 Index and Russell 2000 Index, among others.

The United States government applies economic sanctions against certain institutions and key members of the Chinese government and its ruling Chinese Communist Party (CCP), certain companies linked to the People's Liberation Army (PLA), and other affiliates that the US government has accused of aiding in human rights abuses. The US maintained embargoes against China from the inception of the People's Republic of China in 1949 until 1972. An embargo was reimposed by the US following the 1989 Tiananmen Square protests and massacre. From 2020 onward, the US imposed sanctions and visa restrictions against several Chinese government officials and companies, in response to the persecution of Uyghurs in China, human rights abuses in Hong Kong and Tibet, military-civil fusion, support for the Russian invasion of Ukraine, and fentanyl production.

<span class="mw-page-title-main">Executive Order 14032</span> 2021 United States executive order

Executive Order 14032, titled Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China, was an executive order signed by United States president Joe Biden on June 3, 2021. The order came into effect on August 2, 2021.

References

  1. Pamuk, Humeyra , Alexandra Alper, Idrees; Alper, Alexandra; Ali, Idrees (2020-11-13). "Trump bans U.S. investments in companies linked to Chinese military". Reuters . Archived from the original on 2020-12-11. Retrieved 2020-12-15.{{cite news}}: CS1 maint: multiple names: authors list (link)
  2. "Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies". Whitehouse.gov . Archived from the original on 2021-01-20. Retrieved 2020-12-15 via National Archives.
  3. "Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies". Federal Register. 17 November 2020. Archived from the original on December 13, 2020. Retrieved December 14, 2020.
  4. "Trump administration bolsters order barring U.S. investment in Chinese firms". Reuters . 2020-12-28. Archived from the original on 2020-12-29. Retrieved 2020-12-29.
  5. "Publication of Communist Chinese Military Companies Frequently Asked Questions and Related List". U.S. Department of the Treasury. December 28, 2020. Archived from the original on 2020-12-29. Retrieved 2020-12-29.
  6. "Trump bolsters ban on U.S. investments in China". Reuters . 2021-01-14. Archived from the original on 2021-04-29. Retrieved 2021-01-14.
  7. Alper, Alexandra; Pamuk, Humeyra (December 3, 2020). "United States adds China's SMIC and CNOOC to Defense blacklist". Reuters . Archived from the original on December 9, 2020. Retrieved December 15, 2020.
  8. "DOD Releases List of Additional Companies, In Accordance with Section 1237 of FY99 NDAA". January 14, 2021. Archived from the original on August 27, 2021. Retrieved January 15, 2021.
  9. Davies, Megan; Alper, Alexandra; John, Alun (December 31, 2020). Coghill, Kim (ed.). "NYSE starts process of delisting three Chinese telco companies". Reuters. Archived from the original on August 27, 2021. Retrieved March 1, 2021.
  10. He, Laura (March 1, 2021). "Wall Street is kicking out yet another big Chinese company". CNN. Archived from the original on 2021-03-02. Retrieved 2021-03-02.