How urgent is it to determine if I'm compliance with an EO?
December 18, 2020 10:31 AM Subscribe
My company has advised that US persons potentially impacted by a recent Executive Order contact their financial advisors to determine applicability. Is that something I should prioritize?
Is there anything actionable for an average US citizen related to the Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies?
I am a US citizen residing abroad as a dual-citizen with the country I'm living in. Short version is that the parent company of my employer is on the list. This may not even be relevant, as I do not have shares in the company directly, and I set up a company pension to function similar to a retirement savings plan (self-directed) rather than a true pension.
I have very limited time to devote to this and would welcome advice on the urgency. Including the plan mentioned above I have two other (also extremely moderate) retirement plans set up through a total of three non-US financial institutions, all in balanced mutual funds.
Does the average person have to worry about compliance with EOs and keep track of them as they change? In this particular case, with an incoming administration is this more of a wait-and-see if it's revoked but if not it can be dealt with sometime in 2021? If urgent, do I just reach out to the three institutions? I have had to provide my SSN when setting up these accounts as a US citizen - any chance that they're accountable to reach out to me?
I'm not sure that this would apply to me any more than it would any other person since I can't imagine people are investigating every detail of the mutual funds they're invested in, but it was flagged for me and figured I'd ask.
Is there anything actionable for an average US citizen related to the Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies?
I am a US citizen residing abroad as a dual-citizen with the country I'm living in. Short version is that the parent company of my employer is on the list. This may not even be relevant, as I do not have shares in the company directly, and I set up a company pension to function similar to a retirement savings plan (self-directed) rather than a true pension.
I have very limited time to devote to this and would welcome advice on the urgency. Including the plan mentioned above I have two other (also extremely moderate) retirement plans set up through a total of three non-US financial institutions, all in balanced mutual funds.
Does the average person have to worry about compliance with EOs and keep track of them as they change? In this particular case, with an incoming administration is this more of a wait-and-see if it's revoked but if not it can be dealt with sometime in 2021? If urgent, do I just reach out to the three institutions? I have had to provide my SSN when setting up these accounts as a US citizen - any chance that they're accountable to reach out to me?
I'm not sure that this would apply to me any more than it would any other person since I can't imagine people are investigating every detail of the mutual funds they're invested in, but it was flagged for me and figured I'd ask.
This thread is closed to new comments.
In general terms, sanctions violations are typically strict liability offenses- if you violate the EO you can be held liable even if you didn't know you were breaking the law. Still, enforcement of these types of actions naturally focuses much more on financial institutions and businesses than individuals, though individuals have been prosecuted. The bigger risk to individuals who violate sanctions and related laws is that they might find themselves in trouble with private U.S. organizations that don't want to expose themselves to risk by being associated with you - no bank is going to want to touch somebody who might be violating one of these orders, private insurance companies operating in risky regions will sometimes institute clauses that any sanctions violation renders the policy void, things like that.
I have no idea how this particular EO affects somebody in your situation, but this Harvard Law School analysis says: "The Executive Order will require all U.S. investors (i.e., institutional and individual investors alike) to assess their holdings and determine whether they have a direct, indirect, or derivative ownership interest in any of the companies designated as Communist Chinese military companies. U.S. fund managers may be required to engage in divestment-related transactions that they otherwise would not have contemplated, and to notify limited partners of their legal obligation to do so. Along similar lines, U.S. persons who are limited partners in investment funds—who do not always have visibility into the companies in which they have indirect holdings—may be required to seek additional information from fund managers and general partners to determine whether they have any exposure under the Executive Order."
Also worth pointing out on the question of urgency: the order prohibits U.S. persons from buying any designated securities after January 11, 2021, but gives you until November 2021 to figure out if you already have any relevant securities and sell them. So it would seem that if you aren't currently contributing to any of the three funds you're worried about, then your timeline is significantly longer.
posted by exutima at 10:54 AM on December 19, 2020