The "Divesting from Communist China's Military Act of 2026" mandates that the Secretary of the Treasury include any entity identified as a Chinese military company by the Secretary of Defense on the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List). This inclusion must occur within 90 days of the Defense Secretary's identification, provided the entity is not already listed. The bill aims to address concerns that the People's Republic of China's military-civil fusion strategy exploits U.S. capital to develop its military and security apparatuses, as highlighted in previous Executive Orders. Upon an entity's inclusion on the NS-CMIC List, the prohibitions set forth in Executive Order 13959 will apply within 60 days. These prohibitions generally restrict U.S. persons from engaging in securities investments that finance such companies. However, the bill provides a divestment period of one year, allowing U.S. persons to purchase or sell publicly traded securities issued by the listed entity solely for the purpose of divesting their holdings. This measure seeks to harmonize enforcement approaches and enhance the effectiveness of U.S. sanctions against entities posing national security risks.