H.R. 7075 — Divesting from Communist China’s Military Act of 2026

This section states congressional findings concerning threats from U.S. securities investments financing Chinese military companies (as defined in section 1260H(g) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021), including references to Executive Orders 13959 and 14032; similarities between such companies and military-civil fusion contributors; Department of Defense procurement restrictions under section 805 of the National Defense Authorization Act for Fiscal Year 2024 (prohibiting new contracts after June 30, 2026, and indirect purchases after June 30, 2027); ongoing capital-raising risks; and the benefits of harmonized U.S. sanctions enforcement.

This section requires the Secretary of the Treasury, not later than 90 days after the Secretary of Defense identifies an entity as a Chinese military company operating in the United States under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note), to add the entity to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List) maintained by the Department of the Treasury's Office of Foreign Assets Control if it is not already listed. (As background, section 1260H requires the Secretary of Defense to identify and report on such companies annually.) Within 60 days of inclusion on the NS-CMIC List, the investment prohibitions of Executive Order 13959 (as amended)—which generally bar U.S. persons from transactions in securities of Communist Chinese Military Companies—apply to the entity, except that U.S. persons may during a one-year divestment period buy or sell its publicly traded securities solely to divest.