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EO 14032Executive OrderBiden · D Quiet signal

Executive Order 14032

Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China

This executive order expands and replaces the Trump-era investment ban on Chinese military companies (EO 13959) by adding Chinese surveillance technology companies to the prohibited list. It bars U.S. persons from buying or selling publicly traded securities of designated companies in China's defense, military-industrial, and surveillance technology sectors, with phased effective dates and divestment deadlines.

Federal Register Open PDF 86 FR 30145

Impact dates

  1. Divestment deadline for Annex-listed persons

  2. Divestment deadline for subsequently designated persons (365 days post-determination)

  3. Prohibitions take effect for Annex-listed persons

  4. 60-day trigger for prohibitions on subsequently designated persons

Key directives

  • Replace and supersede Sections 1-5 of EO 13959 with expanded prohibitions covering surveillance technology sector
  • Prohibit purchase/sale of publicly traded securities of designated PRC defense and surveillance technology companies
  • Authorize Secretary of Treasury, with State and Defense, to designate additional companies under criteria in Section 1(a)(i)-(ii)
  • Permit divestment transactions only until June 3, 2022 for Annex-listed persons; 365 days post-determination for subsequently designated persons
  • Revoke EO 13974 and rescind all prior implementing orders

Who is ordered

Timeline

Immediate

  • Revocation of EO 13974; rescission of prior implementing orders
  • Expanded national emergency declaration effective

Near term (90d)

  • Prohibitions take effect August 2, 2021 for Annex-listed companies
  • Treasury/State consultation process for new designations begins

Long term

  • Divestment deadline of June 3, 2022 for Annex-listed companies
  • Ongoing designation and potential removal process for surveillance/defense companies

Risks & tensions

  • Vague scope of 'surveillance technology sector' creates uncertainty for compliance and potential overreach
  • Divergence from prior EO 13959 framework may disrupt compliance programs already established
  • Divestment window may be insufficient for large institutional holders of Annex-listed securities
  • Potential market disruption from forced divestment of widely held securities
  • Unclear whether 'Military-Civil Fusion' definition overlaps with prior list, risking inconsistent application
Executive Order 14032: Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China · Executive Orders