Divesting from Communist China’s Military Act of 2026

This legislation requires the Secretary of the Treasury to add any entity identified as a Chinese military company by the Secretary of Defense to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List). This action must occur within 90 days of the Secretary of Defense's identification under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021. The bill aims to prevent United States capital from financing companies linked to the Chinese military-industrial complex. Upon an entity's inclusion on the NS-CMIC List, the prohibitions set forth in Executive Order 13959 will apply to that entity within 60 days. These prohibitions generally restrict United States persons from engaging in transactions involving publicly traded securities of such companies. However, the bill provides a one-year divestment period , allowing United States persons to purchase or sell these securities solely for the purpose of divesting their holdings. This measure seeks to harmonize enforcement across U.S. government sanctions regimes and enhance the effectiveness of investment restrictions against entities posing national security risks.