Litigation

CHINA 1 The second quarter left little doubt that the Biden Administration will continue its predecessor's policy of taking a tough line against China. In a move designed to head off future legal challenges, President Biden revised Trump-era sanctions targeting Chinese companies with military ties, and even expanded the range of potential sanctions targets to include companies operating in the PRC's surveillance and defense sectors. The Administration also designated a prominent Chinese official implicated in alleged human rights abuses in Xinjiang province, but took no new actions in response to China's activities in Hong Kong. Following Preliminary Court Loss, US Lifts Sanctions against Chinese Electronics Company On May 25, sanctions on Beijing-based electronics company Xiaomi Corporation were lifted after a federal court signed a jointly proposed order to vacate Xiaomi's listing as a Chinese Communist Military Company ("CCMC"). As we previously reported, last November 12, 2020, former President Trump issued Executive Order 13959 (subsequently amended by E.O. 13974), imposing new economic sanctions on entities determined by the Department of Defense to be owned or controlled by the PRC military. The Trump-era order prohibited US persons from purchasing or holding a CCMC's publicly listed securities (or their derivatives, including index funds with exposure to such securities). In response, some sanctioned companies, including Xiaomi, filed suit in US courts, challenging the factual basis for their listing as a CCMC. On March 12, 2021, a federal court issued an order preliminarily enjoining the implementation and enforcement of the prohibitions against Xiaomi, following the judge's finding that the US government lacked evidence to support its assertion that Xiaomi was closely linked with the Chinese military. In May, lawyers for Xiaomi and the US informed the court that, rather than appeal the decision, the US had agreed to remove Xiaomi from the

• Cover