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President Trump Issues Executive Order Prohibiting Transactions Involving Publicly Traded Securities of “Communist Chinese Military Companies"

November 16, 2020, Covington Alert

On Thursday, November 12, 2020, President Trump signed an Executive Order (the “Order”) that, beginning on January 11, 2021, will prohibit U.S. persons from transacting in the publicly traded securities of 31 companies that the Department of Defense has identified as “Communist Chinese military companies.” The requirement for the Department of Defense to create a list of companies was directed by Congress pursuant to Section 1237 of the National Defense Authorization Act (“NDAA”) for Fiscal Year 1999. The Order, entitled “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies,” follows months of U.S. government scrutiny and regulatory action with respect to the activity of Chinese companies. It may also represent one in a series of last-minute actions taken on China by the Trump Administration as it nears the end of its term.

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