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 (878, 879), 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.
- 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.
- Does GL 1A authorize transactions with entities identified as subsidiaries of a Communist Chinese military company (CCMC)?
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.