OFAC FAQ (Current) # 863 - Chinese Military Companies Sanctions

Date issued: Jun. 03 2021

TURBOFAC Commentary (254 words)

Notes:

1) This is one of the eight EO 13959-related FAQs that remains on OFAC’s website after the release of EO 14032 of June 3, 2021, which substantially altered the sanctions regime pertaining to Chinese military company-related securities. The plain text view of the FAQ included the text of the FAQ as it appeared prior to June 3, 2021.

2) See section II(ii) Consolidated Comment on the Chinese Military Companies Sanctions Under the EO Issued June 3, 2021 for discussion of the relationship between the EO and the "facilitation" prohibition that is implicit in all OFAC-administered regulations.

3) The substance of this FAQ is identical as it was in the original version, with only technical changes made on June 3, 2021.

4) Note that this FAQ constitutes a significant, presumably one-off interpretation of the "facilitation" prohibition that is implicit in all OFAC-administered sanctions programs. OFAC says that, in the context of a prohibition that applies to purchases of certain securities by U.S. persons, it would be "considered permissible" for U.S. persons to engage in certain transactions that facilitate purchases of covered securities by non-U.S. persons, even if those purchases could not be made by U.S. persons directly. Compare 586.409 Approval or other facilitation of other persons' investment in the territory of the Republic of Serbia. This constitutes a significant derogation from the way in which OFAC ordinarily interprets prohibitions that apply on their faces to activities by U.S. persons only.