On January 27, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License 1A, “Authorizing Transactions Involving Securities of Certain Communist Chinese Military Companies,” (“GL 1A”) which amends and replaces General License 1 that had been initially issued on January 8, 2021.  OFAC has also published related frequently asked questions (878879), which are copied below, but which were intended to clarify the interaction between OFAC’s “closely matches” guidance, OFAC’s listing of four specific entities on January 8, and GL 1A.

OFAC has also published related frequently asked questions (878879).

  1. What does General License 1A (GL 1A) authorize?

During the period that GL 1A is in effect, U.S. persons may, subject to the conditions in the general license, engage in transactions otherwise prohibited by E.O. 13959 involving covered securities of entities whose names closely match, but do not exactly match, the name of a Communist Chinese military company (CCMC) as defined by section 4(a) of E.O. 13959.

GL 1A does not authorize transactions in covered securities of entities identified on OFAC’s Non-SDN Communist Chinese Military Companies List (NS-CCMC) List or otherwise identified by the Department of Defense pursuant to E.O. 13959.

  1. Does GL 1A authorize transactions with entities identified as subsidiaries of a Communist Chinese military company (CCMC)?

Answer

No.  GL 1A does not authorize any transactions involving covered securities of entities listed on OFAC’s Non-SDN Communist Chinese Military Companies List (NS-CCMC List) pursuant to section 4(a)(iii) of E.O. 13959 as a subsidiary of a person already determined to be a CCMC, including entities added to the NS-CCMC List on January 8, 2021 (i.e., CNOOC Limited, China Mobile Limited, China Telecom Corporation Limited, China Unicom (Hong Kong) Limited).  Pursuant to section 1(a)(ii) of E.O. 13959, prohibitions relevant to entities listed on the NS-CCMC List pursuant to section 4(a)(iii) take effect beginning 9:30 a.m. eastern time on the date that is 60 days after such listing.  Accordingly, the relevant prohibitions with respect to such entities added to the NS-CCMC List on January 8, 2021 (i.e., CNOOC Limited, China Mobile Limited, China Telecom Corporation Limited, China Unicom (Hong Kong) Limited) begin on March 9, 2021.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Dj Wolff Dj Wolff

David (Dj) Wolff is a partner and attorney at law in the firm’s Washington, D.C. and London offices and a director with C&M International, the firm’s trade policy affiliate.

At Crowell & Moring, he practices in the International Trade Group, where his practice…

David (Dj) Wolff is a partner and attorney at law in the firm’s Washington, D.C. and London offices and a director with C&M International, the firm’s trade policy affiliate.

At Crowell & Moring, he practices in the International Trade Group, where his practice covers compliance with U.S. economic sanctions, export controls and antiboycott regimes, and anti-money laundering (AML) laws and regulations. He is experienced in providing day-to-day compliance guidance, developing compliance programs including through on-site compliance trainings, responding to government inquiries, conducting internal investigations, representing them during civil and criminal enforcement proceedings, and, in collaboration with colleagues, managing the potential conflict of laws that can arise from the interaction between extraterritorial impacts of U.S. regulations and third country “blocking” laws or data privacy regulations. Dj splits his time between Washington and London, working regularly with European clients and colleagues to provide coordinated guidance on U.S., U.K., and EU sanctions compliance and enforcement. Dj also has extensive experience in international mergers and acquisitions, advising both buyers and sellers regarding the international trade implications of a potential deal.

Photo of Edward Goetz Edward Goetz

Edward Goetz is the manager for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control…

Edward Goetz is the manager for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control, economic sanctions, anti-money laundering (AML), anti-corruption/anti-bribery, and antiboycott. He has extensive government experience providing information and interpretive guidance on the International Traffic in Arms Regulations (ITAR) concerning the export of defense articles, defense services, and related technical data. He also assists attorneys with matters involving the Export Administration Regulations (EAR), economic sanctions, AML, anti-corruption/anti-bribery, and trade remedies.