Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies, 73185-73188 [X20-11117]

Agencies

• Executive Office of the President

[Federal Register Volume 85, Number 222 (Tuesday, November 17, 2020)]
[Presidential Documents]
[Pages 73185-73188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X20-11117]




                        Presidential Documents 



Federal Register / Vol. 85 , No. 222 / Tuesday, November 17, 2020 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 73185]]

                Executive Order 13959 of November 12, 2020

                
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.

[[Page 73186]]

                    (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

[[Page 73187]]

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.

[[Page 73188]]

                    (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.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    November 12, 2020.

Billing code 3295-F1-P