On February 15, 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) published an initial set of regulations to implement sanctions targeting investments in Chinese Military-Industrial Complex Companies (“CMICs”) set forth under Executive Order 13939 (as amended by Executive Order 14032). The initial (interim) regulations, which will be set forth in 31 C.F.R. Part 586, do not provide any additional guidance or information on the scope or implementation of the CMIC sanctions.

Instead, they are a placeholder and simply set forth definitions from the relevant Executive Orders as well as standard OFAC regulations related to recordkeeping requirements, penalties, and general and specific licensing procedures. Important OFAC guidance currently issued through Frequently Asked Questions, such as guidance on how to determine when publicly-traded securities “are designed to provide investment exposure to” CMIC publicly-traded securities and the ability of U.S. persons to take actions involving CMIC securities on behalf of non-U.S. persons, are not reflected in the initial regulations. OFAC expects to supplement the regulations with a more comprehensive set of regulations in the future.