S. 2048: PRC Military and Human Rights Capital Markets Sanctions Act of 2025

This bill, known as the "PRC Military and Human Rights Capital Markets Sanctions Act of 2025," seeks to impose restrictions on certain financial transactions involving specific entities associated with the People's Republic of China (PRC). The primary components of the bill include:

Prohibition on Securities Purchases

The bill prohibits U.S. persons from purchasing, selling, or holding securities issued by "covered entities." Covered entities include:

• Entities on the Specially Designated Nationals and Blocked Persons list maintained by the U.S. Treasury.
• Entities on the Non-SDN Chinese Military-Industrial Complex Companies List.
• Chinese military companies listed by the Department of Defense.
• Entities subjected to sanctions under the Global Magnitsky Human Rights Accountability Act.
• Entities producing goods subject to trade restrictions based on forced labor in Xinjiang.
• Entities on the Entity List maintained by the Bureau of Industry and Security.
• Entities listed under regulations designed to prevent forced labor from entering the U.S. market.
• Entities on the Military End-User List maintained by the Bureau of Industry and Security.

List of Covered Entities

Within 90 days of the bill's enactment, the President must create and maintain a public list of covered entities. This list should include unique identification numbers for each entity when possible.

Divestment Requirements

U.S. persons will be required to divest from securities connected to covered entities. The timeline for divestment includes:

• For securities identified within the first 90 days after the bill's enactment, divestment must happen within 180 days.
• For any subsequent securities identified, divestment is also required within 180 days from the date of identification.

Individuals or entities facilitating divestment transactions are exempt from certain prohibitions related to the purchase or holding of these securities.

Penalties for Non-compliance

Violating the provisions of this bill can result in various penalties, which may include:

• Civil penalties of up to $250,000 or double the amount of the transaction that led to the violation.
• Criminal penalties for willful violations, including fines up to $1,000,000 and/or imprisonment for individuals for up to 20 years.

Additional Definitions

The bill defines "U.S. persons" as U.S. citizens, lawful permanent residents, and entities organized under U.S. laws.

Objective of the Bill

The main goal of this legislation is to restrict the financial activities that could support entities linked to military activities or human rights abuses in China, thereby aiming to influence U.S. market interactions with these entities.

Relevant Companies

None found