Ropes Memo Discusses Investment Sanctions, Guidance, Open Questions

In a recent client alert, lawyers from Ropes & Gray discussed President Biden’s Executive Order titled “Addressing the Threat from Securities Investments that Finance Certain Companies of the People’s Republic of China,” which superseded similar executive orders issued in the final months of the Trump Administration. According to the law firm memo, the Biden executive order largely retains the structure of the investment-based sanctions introduced in late 2020 in the previous administration and the latest prohibitions will take effect on August 2, 2021. In the interim, the prohibitions introduced under the related Trump-era executive orders are rescinded temporarily. The memo also discusses certain open questions and interpretive guidance from OFAC. The most recent executive order does not mark a material change from the previous approach, the lawyers write. “U.S. and non-U.S. investors and managers will need to familiarize themselves with the Executive Order—including its new designations and deadlines—to ensure compliance with U.S. sanctions and side letter commitments.”