CPA Letter to President Biden on Capital Markets Sanctions for Chinese Military Companies

CPA sent the following letter to President Joe Biden requesting that the administration add Chinese companies on the Department of Defense’s Chinese Military Companies List to the Department of the Treasury’s Office of Foreign Assets Control (OFAC) Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) List. Executive Order 14032 established the NS-CMIC List as part of the administration’s efforts to expand capital market sanctions to Chinese companies that are a part of the People’s Republic of China’s (PRC) civil-military fusion strategy, as well as surveillance technology companies that are complicit in undermining human rights.

Dear President Biden:

We very much appreciate your Executive Order (EO) 14032, expanding capital market sanctions beyond defense companies to include those in related industry that are a part of the People’s Republic of China’s (PRC) civil-military fusion strategy, as well as surveillance technology companies that are complicit in undermining human rights. We hope these industries and those 59 companies initially listed are only the tip of the iceberg and that your administration will continue to add to the NS-CMIC List.

One notable list ripe for inclusion in the capital market sanctions list is the Department of Defense’s CMC List, which was updated most recently on June 23, 2021. As you are aware, this list was transmitted to Capitol Hill pursuant to the National Defense Authorization Act for FY21 section 1260H.

The Biden-Harris Administration has been supportive of section 1260H on the record, and we commend the robust additions to the list. However, we believe this list must be added to the OFAC list in order to maximize effectiveness. Why would such a list of 47 or so companies be reported in accordance with the law, but minimal action be taken to prohibit further business with, or investment in, such companies that are known military or a military-civil fusion supporters of our greatest near-peer competitor, the People’s Liberation Army? It would be a grave mistake to name these companies and take no executive action to curtail their fundraising from scores of millions of unwitting American retail investors?

We should also note that in her confirmation process, Secretary of Commerce Raimondo stated,

“I am aware of the substantial challenges China’s military-civil fusion policy poses to U.S. national security. If confirmed, I plan to leverage the full breadth of the authorities under the purview of the Department of Commerce in order to protect U.S. national and economic security interests. I also look forward to working with the Secretary of Defense and Director of National Intelligence to fully implement related provisions of the FY2021 NDAA (Section 1260H) and other relevant legislation.”

We are grateful for Secretary Raimondo’s support to utilize the law to its fullest extent to protect the financial interests of the American people. But she needs additional support to fully implement the latest provisions. That is why adding 1260H reports submitted to Congress to the NS-CMIC List is required. The support for 1260H is overwhelming – the Senate garnered 81 yea votes and there was a two-thirds majority in the House to override the President’s veto – demonstrating both houses of Congress overwhelming support of this language. We hope the Biden-Harris Administration will update the OFAC NS-CMIC List that protects Americans from unknowingly, or intentionally, investing in Chinese military companies.

To out-compete China and safeguard our national security we must protect our own people from unwittingly investing in China’s production of lethal technology and equipment and the technical means to pursue genocide in Xinjiang. We respectfully ask that you fully implement, and if necessary, amend EO 14032 to ensure that the Pentagon’s CMC List is included in the NS-CMIC List.


Zach Mottl, Chairman                                                Michael Stumo, CEO

Coalition for a Prosperous America                           Coalition for a Prosperous America


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