[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.

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