The United States, primarily through Presidential action under the statutory authority of the International Emergency Economic Powers Act (“IEEPA”), has empowered the U.S. Department of.
Friday, April 9, 2021
SEC Announces 2021 Examination Priorities
The SEC’s Division of Examinations (Division), formerly known as the Office of Compliance Inspections and Examinations (OCIE), released its 2021 examination priorities. In its release, the Division noted that it completed over 2,952 examinations in 2020 and issued more than 2,000 deficiency letters. Approximately 15% of all registered investment advisers were examined during 2020 and the Division completed more than 100 examinations of investment companies. The Division also conducted hundreds of outreach calls to investment companies and advisers to assess market impacts of the COVID-19 pandemic. The 2021 priorities are grouped into the following categories, each of which is described below in more detail:
Judicial Checks on Abuse of the National Security Rationale: The Case of Xiaomi SHARE
During the Trump administration, national security rose in prominence as a reason for restricting trade, investment and other economic activity. Among other examples, purported national security concerns led to the imposition of steel and aluminum tariffs under Section 232 of the Trade Expansion Act of 1962 (as our colleagues Scott Lincicome and Inu Manak describe here); there were bans on Chinese social media apps WeChat and TikTok; and most recently, the shares of certain Chinese companies, including electronics maker Xiaomi, were prohibited from being traded by Americans.
There are, of course, some legitimate security concerns relating to China specifically and to the world more broadly. However, when U.S. courts have been asked to review the actions of the Trump administration that were supposedly based on national security considerations, they have often rejected the justifications be
[co-authors: Nick Russell, and Alasdair Kan]
Key Points
The U.S. government has recently imposed controls pertaining to “Communist Chinese Military Companies” (CCMCs or “1237 entities”); Chinese “Military End Users” (MEUs); and Chinese “Military-Intelligence End Users” (MIEUs). The U.S. government has also been adding Chinese companies to the Entity List based on concerns regarding the companies’ relationships to the Chinese military industrial complex.
Although the names and underlying policy concerns are similar, the scope and source of the prohibitions regarding each set of Chinese entities are quite different. Companies on one of the lists are not automatically on others, but overlap is possible as the lists evolve. These lists are in addition to the Chinese entities that are on the Unverified List (UVLs), the Denied Persons List (DPLs), and the Specially Designated Nationals and Blocked Persons List (SDNs).
Text of a Letter to the Speaker of the House of Representatives and the President of the Senate, Executive Order on Amending Executive Order 13959–Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies