US President Joe Biden delays Trump’s ban on investments in companies with similar names to blacklisted Chinese firms

28/1 2021 11:30

Deadline extended until May 27 for companies with similar names to companies deemed to have ties to China’s military
Biden administration is conducting ‘complex reviews’ of Trump policies on China

The Biden administration delayed a ban imposed by Donald Trump on American investors, pension funds and financial firms investing in companies that have similar names to a group of blacklisted Chinese firms with purported ties to China’s military.

On Thursday, the Office of Foreign Assets Control (OFAC), an arm of the US Treasury Department, issued a so-called 
general licence that extended the deadline for US persons to stop engaging in securities transactions in companies “whose name closely matches, but [do] not exactly match” those identified as Chinese military companies. The deadline for companies with similar names had originally been set for January 28 and is now extended to May 27.

In November last year, former US President Donald Trump issued an executive order that barred American investors from owning companies with military ties beginning this month.

The licence does not allow American investors to engage in securities transactions of subsidiaries of a group of companies already identified by the US as being owned or controlled by the Chinese military, OFAC said.

Investors have until November 11 to fully exit their holdings of designated companies.

The list of designated firms grew to 44 companies in the waning days of the Trump administration, including oil giant China National Offshore Oil Corporation (CNOOC), China’s top chip maker SMIC and smartphone maker Xiaomi.

The investment ban has sown confusion among investors and forced the delisting of China’s three biggest telecommunications companies: China Mobile, China Telecom and China Unicom. It has also led to a reshaping of global stock benchmarks.

The blacklisted telecoms asked the New York Stock Exchange (NYSE) hours after President Joe Biden’s inauguration this month to reconsider delisting their American Depositary Shares (ADS) and allow their stock to be traded in New York while the review was conducted.