Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies | |
Type | Executive order |
---|---|
Executive Order number | 13959 |
Signed by | Donald Trump on November 12, 2020 |
Federal Register details | |
Federal Register document number | 2020-25459 |
Publication date | November 17, 2020 |
Document citation | 85 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."
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.
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]
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]
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]
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.
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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.
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