Executive Order 13959 (2020)

Executive Order 13959 created United States restrictions on securities investment in designated Chinese military-linked companies; the operative framework is the order as amended by Executive Order 14032. It restricts specified purchases and sales by United States persons. It is not a general asset freeze, and continued holding is not itself prohibited. EO 14032, section 1; OFAC FAQ 1046; FAQ 1048.

Current legal structure

On 3 June 2021, EO 14032 replaced sections 1 to 5 and the annex of EO 13959, introduced revised criteria covering the defence and related materiel and surveillance-technology sectors of China, and revoked EO 13974. The current restrictions therefore cannot be read from the original 2020 text alone. Part 586 implements the amended order, including Treasury's delegated administration through OFAC. EO 14032, sections 1 to 4; 31 CFR 586.106 and 586.201.

The prohibition covers purchases or sales of publicly traded securities of covered entities and publicly traded securities derivative of, or designed to provide investment exposure to, those securities. The definition includes securities traded over the counter in any jurisdiction and currency. United States persons include citizens, lawful permanent residents, entities organised under United States law including foreign branches, and persons in the United States. EO 13959 as amended, sections 1(a) and 3(c) to 3(d); 31 CFR 586.305 and 586.307.

OFAC uses the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List). FAQ 899 requires an exact match to a listed entity's name. A subsidiary is covered only if itself identified under the amended order; OFAC's 50 Percent Rule does not apply to entities listed solely under this programme. Other authorities may impose separate restrictions. 31 CFR 586.404; OFAC FAQs 857 and 899.

Operative dates and investment exposure

For entities in the 2021 annex, the purchase-and-sale prohibition began at 12:01 a.m. eastern daylight time on 2 August 2021. Purchases or sales solely to effect divestment were permitted only before 12:01 a.m. eastern daylight time on 3 June 2022. For later determinations, the corresponding periods are 60 days before the prohibition begins and 365 days before the divestment permission ends, measured from the determination. A licence or other applicable authorisation may alter the result. EO 13959 as amended, section 1(b) to 1(d).

The 365-day provision is a limited permission to transact for divestment, not a requirement to sell. OFAC FAQ 1046 expressly permits continued holding after that period, while purchases or sales to divest then require authorisation. FAQ 1048 distinguishes rejection of a prohibited transaction from blocking property. OFAC FAQ 1046; FAQ 1048.

There is no small-holding exception for covered funds. FAQ 861 states that the prohibition applies to the covered securities in an index fund, exchange-traded fund or derivative regardless of their share of the underlying product. A small listed-company position therefore does not, by itself, permit a United States person to purchase or sell the relevant investment product. OFAC FAQ 861.

Market channels and related regimes

The framework connects to Delisting and capital-market exclusion and Index and benchmark exclusion, but a listing decision, exchange delisting, index removal and investor transaction should be analysed separately. The order defines legal restrictions; it does not establish how much of an observed market response results from private compliance decisions.

The Xiaomi challenge to United States military-company designation (2021) concerned the earlier section 1237 designation framework. The court's 12 March 2021 preliminary-injunction opinion addressed Xiaomi's designation and preceded EO 14032. It did not adjudicate the later amended framework. *Xiaomi Corporation v Department of Defense*, No. 21-280, memorandum opinion, pages 1 to 6 and 26.

Outbound investment screening is distinct. Under Part 850, specified transactions involving covered foreign persons and activities can require notification or be prohibited. An NS-CMIC name match does not replace that separate analysis. 31 CFR 850.101 and 850.102.

Current status and limits

The presidential notice signed on 3 November 2026 and published on 5 November continued the underlying national emergency for one year beyond 12 November 2026. That continuation does not itself establish a new listing or a new transaction date for an entity. Continuation notice, Federal Register 91, pages 69953 and 69954.

This review checked the amended order, Part 586, OFAC guidance and the list made available on 10 November 2026. The eCFR text was labelled current through 6 November 2026. The entry does not certify any particular issuer or security as tradable and does not state a current entity count. Screening needs the exact name, identifying information, determination date, security and any later removal or authorisation. The original order reproduced in an appendix to Part 586 must be read with its amendatory order. 31 CFR Part 586; OFAC NS-CMIC List.

Strategic assessment requires evidence beyond legal coverage. Holdings, liquidity, trading access and financing are possible measures, but changes require a counterfactual before being attributed to the restriction. A price fall does not by itself establish degradation of military capability.

Sources

1. President of the United States, Executive Order 13959, *Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies*, 12 November 2020, Federal Register 85, pages 73185 to 73189, published 17 November 2020. Historical text, amended by source 2.
2. President of the United States, Executive Order 14032, *Addressing the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China*, 3 June 2021, Federal Register 86(107), pages 30145 to 30149, published 7 June 2021. Sections 1 to 4; amended EO 13959 sections 1 and 3.
3. Office of the Federal Register and Government Publishing Office, 31 CFR Part 586, *Chinese Military-Industrial Complex Sanctions Regulations*, eCFR text current through 6 November 2026, accessed 10 November 2026. Sections 586.101, 586.106, 586.201, 586.305, 586.307, 586.404 and 586.501. The eCFR is authoritative but unofficial.
4. Office of Foreign Assets Control, Chinese Military Companies Sanctions programme, NS-CMIC List, and FAQs 857, 861, 899, 1046 and 1048, accessed 10 November 2026. FAQs 857, 861 and 899 are dated 3 June 2021; FAQs 1046 and 1048 are dated 1 June 2022.
5. United States District Court for the District of Columbia, *Xiaomi Corporation v Department of Defense*, No. 21-280 (RC), memorandum opinion, document 21, 12 March 2021, pages 1 to 6 and 26.
6. Office of the Federal Register and Government Publishing Office, 31 CFR Part 850, *Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern*, sections 850.101 and 850.102, text current through 6 November 2026, accessed 10 November 2026.
7. President of the United States, *Continuation of the National Emergency With Respect to the Threat From Securities Investments That Finance Certain Companies of the People's Republic of China*, notice of 3 November 2026, Federal Register 91(213), pages 69953 to 69954, published 5 November 2026.