On December 3, 2020, the Department of Defense (DOD) released the names of four additional “Communist Chinese military companies” operating directly or indirectly in the United States in accordance with the statutory requirement of Section 1237 of the National Defense Authorization Act (NDAA) for Fiscal Year 1999, as amended. The companies are:

  • China Construction Technology Co. Ltd. (CCTC)
  • China International Engineering Consulting Corp. (CIECC)
  • China National Offshore Oil Corp. (CNOOC)
  • Semiconductor Manufacturing International Corp. (SMIC)

This list follows two other listings since June 2020 of Chinese companies with “military-civil” functions and development strategies, which according to the State Department support the modernization goals of the People’s Liberation Army (PLA) “by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities.” See also Tranche 1 and Tranches 2-3.

These four companies will be affected by President Donald Trump’s November 12, 2020, Executive Order (E.O. 13959 that prohibits U.S. investment in “Communist Chinese Military Companies.” The investment ban directed under E.O. 13959 takes effect on January 11, 2021. See International Trade Update of November 24, 2020 for more details on this Executive Order.

Section 1237 of the NDAA also authorizes the president to impose sanctions under the International Emergency Economic Powers Act (IEEPA) in the case of any commercial activity in the United States by a person/entity who is on the list published by DOD. While formal sanctions other than the investment ban under E.O. 13959 have not yet been imposed on these listed companies, placement on the list should serve as a “red flag” for U.S. persons conducting business with these companies for potential future sanctions and export restrictions.