Over the past few weeks, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has issued further guidance in the form of Frequently Asked Questions (FAQs) and General Licenses that clarify the terms of the Order and its Chinese Military Sanctions Program. To a large degree, OFAC’s guidance confirms that the agency will interpret the Order broadly to prohibit not only direct investments, but also derivatives and any investment that causes “investment exposure” to such securities, such as an investment in a fund that includes CCMCs in its investment portfolio. As OFAC’s guidance continues to evolve, financial services firms must address immediate compliance challenges.

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