WASHINGTON — The Coalition for a Prosperous America (CPA) today, in two separate letters, urged President Joe Biden to place capital markets sanctions on additional Chinese companies present in U.S. capital markets. In the first letter, CPA requested the Biden administration update their list of sanctioned Chinese companies to include companies that were originally on the Pentagon’s Chinese Communist Military Companies List, which was first established by Executive Order 13959 signed by President Trump. In the second letter, CPA requested the Biden administration apply capital markets sanctions to the five newest Chinese companies added to the Entity List on June 24, three of which are currently traded in U.S. capital markets.
On June 3, Biden signed Executive Order (EO) 14032 that expanded capital markets sanctions on Chinese companies to include defense and related materiel sector companies, as well as Chinese companies that develop or use Chinese surveillance technology to facilitate repression or serious human rights abuses. This EO also established the Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) List at the Department of the Treasury’s Office of Foreign Assets Control (OFAC). In the letter, CPA urged the Biden administration to add companies on the Department of Defense’s Chinese Military Companies List, which was transmitted to Capitol Hill pursuant to the National Defense Authorization Act for FY21 section 1260H.
“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,” the letter states. “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.”
On June 24, the Biden administration announced actions aimed at Chinese solar companies’ use of forced labor in Xinjiang. As part of the announcement, the Department of Commerce’s Bureau of Industry and Security (BIS) added five Chinese companies to the Entity List in connection with participating in the practice of, accepting, or utilizing forced labor involving Uyghurs and other Muslim minority groups in Xinjiang. In the letter, CPA urged the Biden administration to place these five Chinese entities on the NS-CMIC List. Currently, three of these five Chinese “forced labor” companies are traded in the U.S. capital markets and are included in major U.S. indices and Exchange-Traded Funds benchmarked against them.
“We believe the most effective way to deter or cut off the malign activities of the CCP and their ‘bad actor’ corporate front companies is to deny them access to the investment capital of U.S. persons worldwide,” the letter states. “Accordingly, it would be an outrage if these three publicly traded companies are not immediately placed on the OFAC NS-CMIC List. We are confident that we can achieve veto-proof legislation for this purpose, should the Administration — notably the Wall Street-friendly Treasury Department — hesitate to do so. We sincerely hope it does not come to this.”
In May, CPA CEO Michael Stumo wrote in The Washington Times that the “Biden administration should move swiftly to ensure that China’s ruling Communist Party can no longer fund its predatory agenda with Wall Street’s help.”