The Senate has passed by a wide margin legislation taking an array of actions to counter the threat now seen to be posed by the People’s Republic of China. Among these are optional and mandatory sanctions against a far wider range of targets linked directly or indirectly to China engaging in or benefiting from “malign” activities. Far broader use of sanctions would create additional legal, reputational, and even charter risk for banks and other financial institutions doing business in the U.S. or with U.S. financial institutions. New law makes it possible to, when such sanctions are invoked, impose them extraterritorially by virtue of any correspondent relationship with a U.S. bank by the parent company even if that correspondent relationship is not otherwise within the scope of U.S. law.
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