United States: Executive Order 13959 as amended - Finance of Communist Chinese Military Companies - Update VIII
Note: This announcement, originally published on 7 January 2021 and updated on 8 January, 28 January, 24 February, 8 March, 15 March, 7 May 2021 and 28 May 2021 has been further updated following the amendment of E.O. 13959. The changes have been highlighted.
Clearstream Banking1 informs customers that by means of a new United States Executive Order (E.O.)entitled “Addressing the Threat from Securities Investments that Finance Certain Companies of the People’s Republic of China” issued on 3 June 2021, Executive Order 13959 ( "E.O. 13959") has been further amended.
This new E.O. of 3 June 2021 amends and replaces the operative provisions of the previous E.O. 13959, and the restrictions that were imposed under the previous version of E.O. 13959 are no longer in effect. The restrictions contained in the new E.O. of 3 June 2021 will be effective as from 2 August 2021 12:01 a.m. US eastern daylight time.
The new E.O. of 3 June 2021 amends E.O. 13959 by:
- Replacing the previous list of Communist Chinese Military Companies (“CMC Companies”) with a new list of Chinese Military-Industrial Complex Companies (“CMIC Companies”) whose publicly-traded securities, as well as derivatives of, and securities which provide an economic exposure to, such OFAC-listed securities, will be subject to a prohibition on purchases by United States persons as from 2 August 2021 12:01 a.m. US eastern daylight time.
Consequently, Clearstream will no longer place any specific operational requirements on transactions involving securities of CMC Companies that were previously subject to these requirements. Customers are no longer required to provide a specific representation of sanctions compliance with E.O. 13959 as was previously the case for instructions relating to securities of CMC Companies. Notwithstanding the above changes to requirements, customers are reminded that according to the Clearstream Banking General Terms and Conditions, they are responsible for ensuring that all instructions settled by them through Clearstream Banking comply with applicable laws, including sanctions.
Clearstream Banking is continuing to assess the new requirements under E.O. 13959 as amended by the new E.O. of 3 June 2021 and the updated guidance in the relevant OFAC FAQs, and will provide further updates on operational requirements relating to the new CMIC list in due time.
For further information, please contact Clearstream Banking Customer Service or your Relationship Officer.
In addition, new and amended FAQs issued by the US Treasury Department’s Office of Foreign Assets Control (“OFAC”), as well as the CMIC Companies list, are available on the OFAC website here.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.