Senator Seeks to Block Chinese Firms on Pentagon Blacklist From Trading in US

Sen. Rick Scott (R-Fla.) is introducing two bills that would block certain companies—flagged by the Pentagon as helping China’s military—from accessing U.S. capital markets.

The bills, shared with The Epoch Times ahead of their release, would add a visible warning to these companies’ stock tickers or even cut them off from trading on U.S. markets, the senator said. 

Scott said the measures were designed to protect Americans from “funding an adversary which wishes to destroy” the United States. 

“Communist China has chosen to be our enemy,” he told The Epoch Times in a statement. 

“Communist China’s military companies want to use U.S. markets and exchanges to fund the CCP’s efforts to attack our way of life using dollars from American investors,” he said.

“We can’t let that happen.”

The first legislative proposal, the Know Your Sanctioned Securities Act, would establish a ticker-symbol identification system to help investors identify companies on the Pentagon’s blacklist.

The bill would publicize these companies by adding a label to the ticker symbols of securities issued by companies the Pentagon believes support the Chinese military. 

Mandated by U.S. law and formally known as 1260H, the list has expanded rapidly in recent years.

The latest version, released in June, spans sectors ranging from artificial intelligence (AI) and robotics to solar energy and electric vehicles (EV).

Among the new designees are some of the country’s biggest brands, such as e-commerce giant Alibaba Group Holding, search engine operator Baidu, and BYD, the world’s biggest EV maker. 

If enacted, the Securities and Exchange Commission (SEC) would have 180 days to create rules to implement the requirements.  

The second bill, dubbed the Protecting U.S. Investors from Chinese Military Companies Act, would require the SEC to suspend trading in the securities issued by companies that remained on the Pentagon’s blacklist through two consecutive revisions.

The SEC would have 10 days to act after the Pentagon released the latest annual updates. 

If a Chinese company was also on the Treasury Department’s blacklist, known as the Non-SDN Chinese Military Industrial Complex Companies List, the SEC would be required to notify Congress that the Commission would not suspend trading in that company’s securities due to its presence on the Treasury’s list.

The Pentagon and Treasury Department maintain separate lists of Chinese companies within the military-industrial complex, each for different purposes.

The Treasury’s list bars securities transactions with the sanctioned companies, while inclusions in the Pentagon’s 1260H list do not carry such formal sanctions.  

Jon Toomey, president of the non-profit Coalition for a Prosperous America, called the move a critical step to ensure investors know what they own and keep their savings “out of the People’s Liberation Army’s hands.”

“American retirees should never be funding Communist China’s military,” he said in a statement endorsing the bills.