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On January 27, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License 1A, “Authorizing Transactions Involving Securities of Certain Communist Chinese Military Companies,” (“GL 1A”) in relation to OFAC’s Communist Chinese Military Companies (“CCMCs”) sanctions program as implemented pursuant to Executive Order 13959 (“EO 13959”) and amended by Executive Order 13974.  OFAC concurrently published frequently asked questions (FAQs) 878 and 879, which clarify OFAC’s previous guidance on subsidiary entities with names that “closely match” the name of a CCMC.  Our blog posts on EO 13959 and OFAC’s prior guidance on the CCMC sanctions program are available here and here.

As with the original GL 1, GL 1A authorizes US persons to engage in all transactions and activities otherwise prohibited by EO 13959 involving publicly traded securities (as well as publicly traded securities that are derivative of, or are designed to provide investment exposure to such securities) of any entity whose name “closely matchesbut does not exactly match,” the name of a company on OFAC’s Non-SDN Communist Chinese Military Companies List (“NS-CCMC List”).  This authorization has been extended until 9:30 a.m. eastern daylight time on May 27, 2021 (from the original January 28, 2021 cut-off.)

New to GL 1A is paragraph (b), which provides that GL 1A does not authorize transactions involving publicly traded securities of entities identified on the NS-CCMC List or otherwise identified pursuant to EO 13959, including subsidiary entities that were added to the NS-CCMC List on January 8, 2021, i.e., CNOOC Limited, China Mobile Limited, China Telecom Corporation Limited, China Unicom (Hong Kong) Limited (“Listed CCMC Subsidiaries”).  A note to GL 1A clarifies that the Listed CCMC Subsidiaries are considered to have been added to the NS-CCMC List on January 8, 2021, such that the prohibitions of EO 13959 on transactions involving these entities’ publicly traded securities would apply 60 days after the listing, i.e., March 9, 2021.

GL 1A and FAQs 878 and 879 appear to have been issued in part to clarify prior OFAC guidance suggesting that CCMC sanctions under EO 13959 would automatically apply to subsidiaries of listed CCMCs if a subsidiary’s name “closely matches” the name of its listed parent.  That earlier guidance appeared to conflict with FAQ 857, which indicates that non-listed subsidiaries are not automatically covered by EO 13959.  This contradiction had resulted in uncertainty as to whether the Listed CCMC Subs were considered to have been added to the NS-CCMC List on January 8, 2021 or on the earlier date their parent companies were added to the NS-CCMC List.  Given that the restrictions take effect 60 days after such listing, this is an important distinction.

Now, the addition of the Note to GL 1A along with FAQs 878 and 879 make clear that CCMC subsidiaries with names that “closely match” the names of their listed parent companies are not considered to be subject to the same sanctions until such time as they themselves are added to the NS-CCMC List or until GL 1A expires.


Alison Stafford Powell has considerable experience counseling US and non-US companies on cross-border outbound trade compliance in the areas of export controls, trade and financial sanctions, anti-terrorism controls, anti-corruption and anti-money laundering rules, US anti-boycott laws, and US foreign investment restrictions under the Exon-Florio Provision. With a background also in EU and UK trade restrictions, she routinely advises non-US companies on reconciling US and EU trade regulations and on the extra-territorial impact of US trade restrictions. She is a dual US/English qualified lawyer and has worked in the Firm’s London, Washington, DC and Palo Alto offices since 1996.


Meghan Hamilton is a member of the International Commercial Practice Group and the International Trade Compliance Sub-Practice Group in Baker McKenzie Chicago, where she has been an associate since 2015. Meg regularly assists multinational companies on sanctions, customs and export control compliance as well as other international trade matters, including commercial agreements and anti-boycott regulations. She is active in civic activities throughout Chicago, serving on the Young Professional Board of the Center for Disability and Elder Law as well as the Auxiliary Board of the Chicago Legal Clinic.


Ryan Poitras is a member of the Firm's International Trade Practice Group in our Washington, DC office. He joined the Firm as a summer associate in 2018 and became a full-time associate in 2019. Ryan’s experience also includes working as an intern with the Office of the US Trade Representative.