OFAC Issues 2 FAQs on Banned Investment Transactions With Chinese Companies
The Office of Foreign Assets Control Jan. 6 issued two new frequently asked questions related to President Donald Trump’s November executive order to ban U.S. investment in Chinese military companies (see 2011130026). In FAQ 863, OFAC said U.S. people can “custody, offer for sale, serve as a transfer agent and trade” in securities covered by the order “to the extent that such support services are not provided to U.S. persons in connection” with certain “prohibited transactions.” Those transactions include “clearing, execution, settlement, custody, transfer agency, back-end services, as well as other such support services,” OFAC said.
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In FAQ 864, OFAC said the restrictions outlined in the order apply to transactions in securities of a Chinese military company’s subsidiary with a “name that exactly or closely matches the name of an entity” identified in the order. The agency said it will continue to update its list of Chinese military companies (see 2012290017) with subsidiaries or companies that “closely” match the names of the entities. OFAC also clarified that compliance with the order’s restrictions, which take effect Jan. 11, “is measured by trade date, rather than settlement date.”