902. Under Executive Order (E.O.) 13959, as amended, are U.S. persons prohibited from providing investment advisory, investment management, or similar services to a non-U.S. person, including a foreign entity or foreign fund, in connection with the non-U.S. person’s purchase or sale of covered securities of Chinese Military-Industrial Complex Companies (CMICs)?
U.S. persons are not prohibited from providing investment advisory, investment management, or similar services to a non-U.S. person, including a foreign entity or foreign fund, in connection with the non-U.S. person’s purchase or sale of a covered security, provided that the underlying purchase or sale would not otherwise violate E.O. 13959, as amended. For example, a U.S. individual acting as the fund manager for a non-U.S. investment fund, or a U.S. entity that is the investment adviser or investment manager for a non-U.S. investment fund, is not prohibited from advising on, authorizing, directing, or approving purchases...
1) 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. As is the case with FAQ # 863, this FAQ appears to constitute a significant, one-off interpretation of the "facilitation" prohibition that is implicit in all OFAC-administered sanctions programs. FAQ # 863, where OFAC says that certain activities would be “considered permissible,” here OFAC prefaces the FAQ with “[f]or purposes of E.O. 13959” (suggesting that the logic cannot be extended to other sanctions programs). The activities described here would fall squarely within the standard “facilitation” prohibition in the context of an ordinary sanctions prohibition.