Chinese telecommunications corporation Xiaomi announced that the US Department of Defense had finally removed it from the sanctions list. Now, US investors are able to buy the company's stocks.
In this regard, the FTSE Russell provider is going to return Xiaomi shares to its indices. The corporation's shares will be included in the FTSE Global Equity Index Series in the following way: 50% will be included on the trade opening on June 7, and the rest - on June 21. Xiaomi shares rose by 5% at the time of publication of the news. One share of the company was trading at $28.15. In June, the company will be evaluated in order to include it in the FTSE China 50 index.
Notably, earlier this year, the US Department of Defense published on its website a list of Chinese companies which US citizens were not allowed to invest in. Those citizens of the United States who had previously purchased these assets were required to sell them by November 11, 2021. This sanctions list was made by the administration of Donald Trump in the last days of his presidency. The ban touched nine Chinese companies, including aircraft manufacturer Comac and China's Xiaomi corporation.
The sanctions were imposed according to the law, which came into force in 1999. It requires the Ministry of Defense to compile a list of companies that belong to or are controlled by the Chinese military-industrial complex.
On January 15, the news led to a slump of 11% in Xiaomi shares.
In response to such a decision, Xiaomi management said that it did not belong to the Chinese military intelligence and was not controlled by it, and would take all the appropriate measures to protect its interests. As a result, in March, the US Federal Court temporarily lifted the ban on investing and cooperating with Xiaomi. The judge concluded that Xiaomi did not threaten the national interests of the United States. Today, the court of the District of Columbia lifted all the restrictions for American individuals and American companies wishing to purchase stocks of the Chinese corporation.
In January 2021, the Trump administration also tightened control over the supply of goods and technology to the intelligence services from Russia, China, Iran, Cuba, Venezuela, Syria, and North Korea. The Trump administration expanded the previously existing restrictions on the export of American goods. Individuals and legal entities of the United States cannot participate in the supply of goods of non-American origin to the military intelligence services of Russia, China, Iran, etc. Moreover, it is prohibited to provide them with services such as repair or maintenance.
