[House Document 116-170]
[From the U.S. Government Publishing Office]
116th Congress, 2d Session - - - - - - - - - - - - House Document 116-170
AN EXECUTIVE ORDER ADDRESSING THE THREAT FROM SECURITIES INVESTMENTS
THAT FINANCE COMMUNIST CHINESE MILITARY COMPANIES
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
AN EXECUTIVE ORDER ADDRESSING THE THREAT FROM SECURITIES INVESTMENTS
THAT FINANCE COMMUNIST CHINESE MILITARY COMPANIES, PURSUANT TO 50
U.S.C. 1703(b); PUBLIC LAW 95-223, SEC. 204(b); (91 STAT. 1627) AND 50
U.S.C. 1621(a); PUBLIC LAW 94-412, SEC. 201(a); (90 STAT. 1255)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
November 16, 2020.--Referred jointly to the Committees on Foreign
Affairs and Financial Services, and ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
19-011 WASHINGTON : 2020
The White House,
Washington, November 12, 2020.
Hon. Nancy Pelosi,
Speaker of the House of Representatives,
Washington, DC.
Dear Madam Speaker: Pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.), and section
301 of title 3, United States Code, I hereby report that I have
issued an Executive Order declaring a national emergency to
deal with the threat posed by the People's Republic of China's
(PRC) increasing exploitation of United States capital to
resource and to enable the development and modernization of its
military, intelligence, and other security apparatuses which
continues to allow the PRC to directly threaten the United
States homeland and United States forces overseas, including by
developing and deploying weapons of mass destruction, advanced
conventional weapons, and malicious cyber-enabled actions
against the United States and its people.
Through the national strategy of Military-Civil Fusion, the
PRC increases the size of the country's military-industrial
complex by compelling civilian Chinese companies to support its
military and intelligence activities. Those companies, though
remaining ostensibly private and civilian, directly support the
PRC's military, intelligence, and security apparatuses and aid
in their development and modernization. At the same time, they
raise capital by selling securities to United States investors
that trade on public exchanges both here and abroad, lobbying
United States index providers and funds to include these
securities in market offerings, and engaging in other acts to
ensure access to United States capital. In that way, the PRC
exploits United States investors to finance the development and
modernization of its military.
The Executive Order prohibits certain purchases involving
publicly traded securities, or any securities that are
derivative of, or are designed to provide investment exposure
to such securities, of any Communist Chinese military company.
Those companies are ones the Department of Defense has listed,
or will list, pursuant to section 1237 of Public Law 105-261,
as amended, or are identified as Communist Chinese military
companies or their subsidiaries by the Secretary of the
Treasury using similar criteria. The Executive Order also
prohibits transactions that evade or avoid, or have the purpose
of evading or avoiding, its prohibitions.
I have delegated to the Secretary of the Treasury the
authority to, in consultation with the Secretary of State, the
Secretary of Defense, the Director of National Intelligence,
and the heads of other executive departments and agencies as
appropriate, take such actions, including promulgating
appropriate rules and regulations, and employing all other
powers granted to the President by IEEPA, as may be necessary
to implement the Executive Order. All agencies of the United
States Government are directed to take all appropriate measures
within their authority to carry out the provisions of the
Executive Order.
I am enclosing a copy of the Executive Order I have issued.
Sincerely,
Donald J. Trump.
Executive Order
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Addressing the Threat From Securities Investments That Finance
Communist Chinese Military Companies
By the authority vested in me as President by the
Constitution and the laws of the United States of America,
including the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50
U.S.C. 1601 et seq.), and section 301 of title 3, United States
Code,
I, DONALD J. TRUMP, President of the United States of
America, find that the People's Republic of China (PRC) is
increasingly exploiting United States capital to resource and
to enable the development and modernization of its military,
intelligence, and other security apparatuses, which continues
to allow the PRC to directly threaten the United States
homeland and United States forces overseas, including by
developing and deploying weapons of mass destruction, advanced
conventional weapons, and malicious cyber-enabled actions
against the United States and its people.
Key to the development of the PRC's military, intelligence,
and other security apparatuses is the country's large,
ostensibly private economy. Through the national strategy of
Military-Civil Fusion, the PRC increases the size of the
country's military-industrial complex by compelling civilian
Chinese companies to support its military and intelligence
activities. Those companies, though remaining ostensibly
private and civilian, directly support the PRC's military,
intelligence, and security apparatuses and aid in their
development and modernization.
At the same time, those companies raise capital by selling
securities to United States investors that trade on public
exchanges both here and abroad, lobbying United States index
providers and funds to include these securities in market
offerings, and engaging in other acts to ensure access to
United States capital. In that way, the PRC exploits United
States investors to finance the development and modernization
of its military.
I therefore further find that the PRC's military-industrial
complex, by directly supporting the efforts of the PRC's
military, intelligence, and other security apparatuses,
constitutes an unusual and extraordinary threat, which has its
source in substantial part outside the United States, to the
national security, foreign policy, and economy of the United
States. To protect the United States homeland and the American
people, I hereby declare a national emergency with respect to
this threat.
Accordingly, I hereby order:
Section 1. (a) The following actions are prohibited:
(i) beginning 9:30 a.m. eastern standard time on
January 11, 2021, any transaction in publicly traded
securities, or any securities that are derivative of,
or are designed to provide investment exposure to such
securities, of any Communist Chinese military company
as defined in section 4(a)(i) of this order, by any
United States person; and
(ii) beginning 9:30 a.m. eastern standard time on the
date that is 60 days after a person is determined to be
a Communist Chinese military company pursuant to
section (4)(a)(ii) or (iii) of this order, any
transaction in publicly traded securities, or any
securities that are derivative of, or are designed to
provide investment exposure to such securities, of that
person, by any United States person.
(b) Notwithstanding subsection (a)(i) of this section,
purchases for value or sales made on or before 11:59 p.m.
eastern standard time on November 11, 2021, solely to divest,
in whole or in part, from securities that any United States
person held as of 9:30 a.m. eastern standard time on January
11, 2021, in a Communist Chinese military company as defined in
section 4(a)(i) of this order, are permitted.
(c) Notwithstanding subsection (a)(ii) of this section, for
a person determined to be a Communist Chinese military company
pursuant to section 4(a)(ii) or (iii) of this order, purchases
for value or sales made on or before 365 days from the date of
such determination, solely to divest, in whole or in part, from
securities that any United States person held in such person,
as of the date 60 days from the date of such determination, are
permitted.
(d) The prohibitions in subsection (a) of this section
apply except to the extent provided by statutes, or in
regulations, orders, directives, or licenses that may be issued
pursuant to this order, and notwithstanding any contract
entered into or any license or permit granted before the date
of this order.
Sec. 2. (a) Any transaction by a United States person or
within the United States that evades or avoids, has the purpose
of evading or avoiding, causes a violation of, or attempts to
violate the prohibitions set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the
prohibitions set forth in this order is prohibited.
Sec. 3. (a) The Secretary of the Treasury, after
consultation with the Secretary of State, the Secretary of
Defense, the Director of National Intelligence, and the heads
of other executive departments and agencies (agencies) as
deemed appropriate by the Secretary of the Treasury, is hereby
authorized to take such actions, including the promulgation of
rules and regulations, and to employ all powers granted to the
President by IEEPA, to carry out the purposes of this order.
The Secretary of the Treasury may, consistent with applicable
law, redelegate any of these functions within the Department of
the Treasury. All agencies shall take all appropriate measures
within their authority to carry out the provisions of this
order.
(b) Rules and regulations issued pursuant to this order
may, among other things, establish procedures to license
transactions otherwise prohibited pursuant to this order. But
prior to issuing any license under this order, the Secretary of
the Treasury shall consult with the Secretary of State, the
Secretary of Defense, and the Director of National
Intelligence.
Sec. 4. Definitions. For purposes of this order:
(a) the term ``Communist Chinese military company'' means
(i) any person that the Secretary of Defense has
listed as a Communist Chinese military company
operating directly or indirectly in the United States
or in any of its territories or possessions pursuant to
section 1237 of Public Law 105-261, as amended by
section 1233 of Public Law 106-398 and section 1222 of
Public Law 108-375, as of the date of this order, and
as set forth in the Annex to this order, until such
time as the Secretary of Defense removes such person
from such list;
(ii) any person that the Secretary of Defense, in
consultation with the Secretary of the Treasury,
determines is a Communist Chinese military company
operating directly or indirectly in the United States
or in any of its territories or possessions and
therefore lists as such pursuant to section 1237 of
Public Law 105-261, as amended by section 1233 of
Public Law 106-398 and section 1222 of Public Law 108-
375, until such time as the Secretary of Defense
removes such person from such list; or
(iii) any person that the Secretary of the Treasury
publicly lists as meeting the criteria in section
1237(b)(4)(B) of Public Law 105-261, or publicly lists
as a subsidiary of a person already determined to be a
Communist Chinese military company, until the Secretary
of the Treasury determines that such person no longer
meets that criteria and removes such person from such
list.
(b) the term ``entity'' means a government or
instrumentality of such government, partnership, association,
trust, joint venture, corporation, group, subgroup, or other
organization;
(c) the term ``person'' means an individual or entity;
(d) the terms ``security'' and ``securities'' include the
definition of ``security'' in section 3(a)(10) of the
Securities Exchange Act of 1934, Public Law 73-291, as codified
as amended at 15 U.S.C. 78c(a)(10), except that currency or any
note, draft, bill of exchange, or banker's acceptance which has
a maturity at the time of issuance of not exceeding 9 months,
exclusive of days of grace, or any renewal thereof the maturity
of which is likewise limited, shall be a security for purposes
of this order.
(e) the term ``transaction'' means the purchase for value
of any publicly traded security; and
(f) the term ``United States person'' means any United
States citizen, permanent resident alien, entity organized
under the laws of the United States or any jurisdiction within
the United States (including foreign branches), or any person
in the United States.
Sec. 5. The Secretary of the Treasury, in consultation with
the Secretary of State and, as appropriate, the Secretary of
Defense, is hereby authorized to submit the recurring and final
reports to the Congress on the national emergency declared in
this order, consistent with section 401(c) of the NEA (50
U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C.
1703(c)).
Sec. 6. General Provisions. (a) Nothing in this order shall
be construed to impair or otherwise affect:
(i) the authority granted by law to an executive
department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of
Management and Budget relating to budgetary,
administrative, or legislative proposals.
(b) This order shall be implemented consistent with
applicable law and subject to the availability of
appropriations.
(c) This order is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law
or in equity by any party against the United States, its
departments, agencies, or entities, its officers, employees, or
agents, or any other person.
Donald J. Trump.
The White House, November 12, 2020.
Annex
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Aero Engine Corp of China; Aviation Industry Corporation of
China, Ltd. (AVIC); China Academy of Launch Vehicle Technology
(CALT); China Aerospace Science & Technology Corporation
(CASC); China Aerospace Science & Industry Corporation (CASIC);
China Communication Construction Group Company, Ltd.; China
Electronics Corporation (CEC); China Electronics Technology
Group Corporation (CETC); China Mobile Communications; China
National Chemical Corporation (ChemChina); China National
Chemical Engineering Group Co., Ltd. (CNCEC); China National
Nuclear; China Nuclear Engineering & Construction Corporation
(CNECC).
China General Nuclear Power; China Railway Construction
Corporation (CRCC); China Shipbuilding Industry Corporation
(CSIC); China South Industries Group Corporation (CSGC); China
Spacesat; China State Construction Group Co., Ltd.; China State
Shipbuilding Corporation (CSSC); China Telecommunications;
China Three Gorges Corporation Limited; China United Network
Communications Group Co Ltd; CRRC Corporation; Dawning
Information Industry Co. (Sugon); Hikvision; Huawei; Inspur
Group; Norinco; Panda Electronics; Sinochem Group Co Ltd.
[all]