Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China
The order expands a 2020 national emergency and prohibits U.S. persons from buying or selling publicly traded securities of Chinese companies operating in the defense or surveillance technology sectors, covering dozens of firms named in an attached annex.
It replaces prior rules from Executive Order 13959, fully revokes Executive Order 13974, and adds Chinese surveillance technology — including its use to facilitate repression or human rights abuses outside China — as an explicit basis for the emergency, cutting off a broader set of capital flows to China's military-civil fusion apparatus.
What this order does
What it orders
The order prohibits U.S. persons from purchasing or selling publicly traded securities — including derivatives and investment-exposure instruments — of any company listed in its annex or later designated by the Secretary of the Treasury if that company operates in China's defense and related materiel sector or its surveillance technology sector. The prohibition on annex-listed companies takes effect August 2, 2021; companies later designated by Treasury become subject to the ban 60 days after designation. U.S. persons who already hold such securities may sell them for divestment purposes only — until June 3, 2022 for annex-listed firms, or within 365 days of designation for others.
The order replaces and supersedes sections 1–5 of EO 13959 (as amended) and revokes EO 13974 entirely, requiring the Treasury and all agencies to rescind any prior orders implementing those provisions. The Secretary of the Treasury is authorized to promulgate rules, designate additional companies in consultation with the Secretaries of State and Defense, remove companies from the list, and submit recurring reports to Congress on the national emergency.
Who it affects
U.S. citizens, lawful permanent residents, U.S.-organized entities (including foreign branches), and any person physically in the United States who holds or trades securities in the designated Chinese defense or surveillance technology companies — including retail investors, mutual funds, index funds, and pension plans.
Why it matters
American investors holding shares in any of the dozens of annex-listed Chinese companies must divest by June 3, 2022 and cannot make new purchases starting August 2, 2021. Funds that hold these securities as index components face particular pressure to restructure their portfolios. Violations carry civil and criminal penalties under IEEPA.
What must happen and when
How the order is supposed to work
The Treasury Secretary administers and enforces the order, with authority to designate additional companies, issue rules and licenses, and remove companies from the prohibited list — all in consultation with the Secretaries of State and Defense. Investment prohibitions activate automatically on August 2, 2021 for annex companies; for newly designated firms, the 60-day clock starts on the designation date. A separate divestment window (one year) gives existing holders time to exit. All executive agencies must assist in implementation, and Treasury must report to Congress on the emergency under IEEPA and the National Emergencies Act.
Actions and deadlines
- Activate investment prohibitions on all companies listed in the order's Annex
- Rescind prior orders implementing EO 13974 and superseded portions of EO 13959
- Activate investment prohibitions on companies newly designated by the Treasury Secretary
- Allow divestment-only sales of Annex-listed companies' securities to conclude
- Allow divestment-only sales of newly designated companies' securities to conclude
Agencies directed to act
Authority and reach
What this order changes
Revokes Executive Order 13959
Revokes Executive Order 13974