S. 1359: Sanction Transactions Originating from Pernicious Chinese Companies and Policies Act of 2025

This bill, known as the "Sanction Transactions Originating from Pernicious Chinese Companies and Policies Act of 2025," aims to regulate financial transactions involving certain Chinese companies that operate in specific sectors. Below are the key components of the bill:

Definitions

• Chinese Entity: Defined as an entity organized under the laws of the People's Republic of China or subject to its jurisdiction.
• Publicly Traded Securities: Includes any security that trades on an exchange or over-the-counter, and any derivative securities related to it.
• United States Person: Refers to individuals or entities who are U.S. citizens, lawful permanent residents, or organized under U.S. laws.

Provisions of the Bill

Prohibition on Securities Investments

The bill prohibits U.S. persons from engaging in certain financial activities with specified Chinese companies. Specifically, it forbids:

• The purchase or sale of publicly traded securities issued by companies connected to the Chinese defense sector or surveillance technology.
• Execution, support, or servicing of transactions related to these securities.
• Any attempts to evade these prohibitions or conspire to violate them.

Expansion of the NS–CMIC List

Within 180 days of the bill's enactment, the Secretary of the Treasury must expand the Non-Specially Designated Nationals Chinese Military-Industrial Complex Companies List. This expansion will include:

• Entities that support the Chinese military-industrial complex.
• Entities owned or controlled by those supporting the military-industrial complex.
• Successors of entities involved in such activities due to mergers, acquisitions, or spin-offs.
• Entities providing financial services to the designated companies.

Closing Sanctions Loopholes

To strengthen the implementation of sanctions, the bill requires:

• Immediate application of sanctions against any Chinese entity under relevant U.S. laws unless waived by the President.
• Notification to Congress if the President waives any sanctions, outlining the rationale for the waiver.
• A report to Congress if sanctions are lifted, describing the reasons for the termination.

Relevant Companies

• BA (Boeing Co.) - Could be impacted as it engages in defense contracting which might be affected by the prohibition against financing Chinese entities in the defense sector.
• LOCK (Lockheed Martin Corp.) - As a defense contractor, it may need to adjust investment strategies due to restrictions on transactions with companies in the military sector.
• NOC (Northrop Grumman Corp.) - Similar to others, it may face implications related to financing transactions affected by this legislation.