Partner New York
"The DoD List is not a "blacklist," "sanctions list" or "export control list," and being added to the list has no legal ramifications. "
Overview
On January 7, 2025, the outgoing administration of US President Joe Biden added several prominent Chinese companies to a list of “Chinese military companies” maintained by the Department of Defense (“DoD List”). The DoD List is not a “blacklist,” “sanctions list” or “export control list,” and being added to the list has no legal ramifications.
Department of Defense List
The DoD List is mandated by Section 1260H of the National Defense Authorization Act for 2021 (Pub. L. 116-283), which requires the Secretary of Defense to identify and publish an annual list of “Chinese military companies,” broadly defined as certain companies owned by the Chinese military or receiving assistance from, or otherwise affiliated with, the Chinese military. The DoD List was first published in 2021 and has undergone several updates over the years.
The 2025 update to the DoD List adds several Chinese companies, notably including major Chinese shipping conglomerate COSCO Shipping and certain of its subsidiaries. Another notable addition to the list is China International Marine Containers (“CIMC”). Additional companies listed in previous years remain on the DoD List. The full list of companies on the DoD List is available here.
There is no legal consequence to a company being added to the DoD List; the list is purely informational. Accordingly, there is no legal requirement for any parties to avoid or limit their business with the companies listed on the DoD List.
Possible future listings?
While the DoD List is not a sanctions list, it bears some similarity to the Non-SDN Chinese Military-Industrial Complex Companies List (“NS-CMIC List”), published by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”). The NS-CMIC List targets companies operating in the defense and related materiel sector or the surveillance technology sector of the Chinese economy. In contrast to the DoD List, the NS-CMIC List is a “sanctions list,” and companies listed on it are the target of US sanctions. However, unlike parties listed on OFAC’s list of Specially Designated Nationals and Blocked Persons (“SDN List”), companies on the NS-CMIC List are not subject to “blocking sanctions” prohibiting most transactions with US persons. Rather, companies on the NS-CMIC List are subject to limited sanctions targeting publicly traded securities issued by such companies, as well as publicly traded derivatives that reference such securities.
As of now, COSCO Shipping and CIMC have not been added to the NS-CMIC List and are listed only on the DoD List. It remains to be seen whether COSCO Shipping and CIMC (as well as the other newly listed companies) will or will not be added to the NS-CMIC List. However, even if they were to be added, the only related legal consequence would be restrictions involving publicly traded securities and derivatives. Ordinary course transactions involving sales, charters or leases, and financings generally should not be implicated.
Conclusion
For now, companies dealing with COSCO Shipping, CIMC and the other companies newly listed on the DoD List have no legal requirement to alter their business arrangements due to such listings. However, there may be significant changes in sanctions law once Donald Trump succeeds Joe Biden to serve a second term as US president. Certain actions taken by the Trump administration in 2019 had a significant impact on shipping. Therefore, interested parties should continue to monitor these developments going forward.
