In the News: SenseTime Blacklisted; Insurance Asset Management Opening-Up; and App Store Removals

December 14, 2021 | BY

Vincent Chow

OFAC prohibits U.S. investments in AI company SenseTime, Hong Kong listing postponed; CBIRC to remove foreign ownership cap for insurance asset management firms; MIIT orders removal of 106 apps over data violations

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Photo: Diego M. Radzinschi/ALM

 

SenseTime added to U.S. investment blacklist, IPO postponed

The Biden administration has added leading Chinese artificial intelligence company SenseTime to its investment blacklist. On December 10, the Treasury Department's Office of Foreign Assets Control (OFAC) designated the company as a "Non-SDN Chinese Military-Industrial Complex Company" (NS-CMIC), accusing it of developing facial recognition programs targeting China's Uyghur population.

The designation came on the eve of the company's $767 million Hong Kong initial public offering originally scheduled for December 17. The listing has been postponed now that U.S. investors would not be able to participate in the offering.

The Trump administration first imposed investment restrictions on Chinese companies accused of having ties with the Chinese military in November 2020, when President Trump issued Executive Order 13959 prohibiting U.S. investments in the securities of such companies. President Biden later expanded the ban with Executive Order 14032, which extended the restrictions to Chinese companies operating in China's surveillance or defense industries and gave U.S. investors until June 3, 2022, to divest fully from the companies. In a filing to the Hong Kong Stock Exchange on December 13, SenseTime said it remained committed to completing its offering and will release a supplemental prospectus and new listing timetable, without specifying when these will happen. 

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