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In a new Executive Order ("EO"), President Trump amended and expanded the prohibitions in EO 13959 ("Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies"). The new EO explicitly prohibits U.S. persons from holding any covered securities after the end of the applicable wind-down period. In addition, the new EO broadened the definition of "transaction" to include the sale as well as purchase of any publicly traded security.
As previously covered, EO 13959 prohibits U.S. persons from investing in certain securities of Communist Chinese military companies beginning on January 11, 2021, but transactions to divest such securities are authorized during a wind-down period. For companies listed in the Appendix to EO 13959, dated November 12, 2020, the wind-down period ends on November 11, 2021. For subsequently identified companies, the wind-down period extends 365 days from the date of the company's listing. The new EO explicitly prohibits the ownership of covered securities after the applicable wind-down period.
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