DoD updates and expands list of Chinese military companies operating in US under Section 1260H

Key points

• On June 10, 2026, the United States Department of Defense (DoD) published updated lists of entities designated as Chinese military companies under Section 1260H of the Fiscal Year (FY) 2021 National Defense Authorization Act (NDAA), continuing and significantly expanding a process that began in 1999 under prior statutory authority.[1]
  
  
• The designations capture a broad range of People's Republic of China (PRC) state-owned and private enterprises – including in semiconductors, artificial intelligence (AI), telecommunications, genomics, unmanned systems, logistics, shipping, aviation, construction, and clean energy – that are determined to be affiliated with Chinese military, security, or industrial policy organizations and to operate directly or indirectly in the US.
  
  
• The June 2026 notice added new entities and confirmed or expanded coverage of subsidiaries while also removing a subset of entities from the most recent prior list, published on January 7, 2025.
  
  
• Although Section 1260H itself is principally a disclosure mandate, it may be a precursor to action by other agencies.
  
  
• Listed entities may request reconsideration and potential removal by submitting specified information and evidentiary support to DoD.

Background and legal framework

Section 1260H of the FY 2021 NDAA directs the Secretary of Defense to identify and annually publish a list of “Chinese military companies” until at least December 31, 2030.

Additionally, in recent years, Congress has enhanced and broadened the scope of the Section 1260H list. Under the publication requirement, the Secretary must:

• Identify persons that qualify as “Chinese military companies”;
  
  
• Confirm that they are engaged in providing commercial services, manufacturing, producing, or exporting; and
  
  
• Determine that they operate directly or indirectly in the US.

The unclassified portion of the list must be published in the Federal Register at least annually, with additions and deletions no less frequently than annually.

These authorities build on an earlier framework established in Section 1237 of the FY 1999 NDAA. While 1260H simply requires publication, Section 1237 authorized the President to use emergency economic powers against “Communist Chinese military companies” operating in the US.

The latter provided a foundation for the US Department of the Treasury’s Non-Specially Designated National Chinese Military-Industrial Complex (NS-CMIC) sanctions regulations.

Section 1260H update and expansion

On February 13, 2026, DoD announced an updated list of Section 1260H entities; that announcement was rescinded and removed from the Federal Register thereafter.

After several months, the June 10, 2026 announcement included almost identical information to the February announcement, with the sole notable difference being the continued inclusion of Yangtze Memory Technologies Co., Ltd. and ChangXin Memory Technologies.

Affiliations and military-civil fusion

Notably, the June 10, 2026 notice includes a brief explanation or justification for the inclusion of each entity on the 1260H list. This information was not included in prior versions, except in the temporarily released February 2026 version.

Each explanation:

• Identifies direct and indirect ownership or affiliation relationships with one or two of the following entities: the State-owned Assets Supervision and Administration Commission of the State Council; the Ministry of Industry and Information Technology; the State Administration of Science, Technology and Industry for National Defense; the People’s Liberation Army (PLA); the People’s Armed Police; Chinese security and law enforcement bodies; or other state actors
  
  
• Characterizes many entities as “military-civil fusion contributors to the Chinese defense industrial base” on fact patterns such as the following:

• Receiving PRC government support through science, technology, research, or industrial programs linked to Chinese military planning
  
  
• Holding designations as “Little Giant” or “Single Champion” enterprises
  
  
• Locating in, or having affiliations with, designated “military-civil fusion enterprise zones”
  
  
• Holding military production licenses or formally acting on behalf of the PLA

The June 10, 2026 announcement also removes ten entities that were previously included – leaving 188 current entities – but does not provide the bases for the removals.

Impact on US and multinational businesses

While the published 1260H list could yield reputation impacts for companies, it does not create prohibitions or market exclusions. Regardless, companies are encouraged to consider other potential impacts, particularly as the 1260H list continues to expand.

First, like many of the “list-based” regulatory restrictions on commerce, businesses listed on the 1260H list may be disqualified from consideration for federal agency contract awards, grants, and other assistance. This has been formalized within the DoD acquisition environment, as well as in broader opportunities such as the Small Business Innovation Research program. The agencies with larger granting roles for research and development (e.g., the DoD, the US National Science Foundation, and the National Institutes of Health) have restricted those entities at the policy level through mandated research security measures; those exclusions are expected to be formalized in future years.

Second, the 1260H list is used to inform other regulatory and risk-based regimes (including procurement decisions, investment screening, supply chain security reviews, and broader national security assessments). It is a lynchpin in the BIOSECURE Act and in proposed measures originating with the US House of Representatives’ Select Committee on Strategic Competition Between the US and the Chinese Communist Party. The list is also frequently cited as a factor in the Federal Communications Commission’s evaluation of applications for equipment authorization and broadcast licenses.

Entities and investors with exposure to the PRC industrial base, including those active in technology, infrastructure, energy, logistics, and life sciences sectors, may consider the following steps:

• Monitor the Federal Register for Section 1260H updates and cross-check counterparties, portfolio companies, joint ventures, and suppliers against the current 1260H list
  
  
• Assess whether corporate structures, joint ventures, or subsidiaries based overseas could be captured as operating “directly or indirectly” in the US
  
  
• Evaluate the impact, if any, on contractual, financing, and governance structures
  
  
• Consider the availability and strategic use of the reconsideration process where factual circumstances or affiliations have materially changed
  
  
• Track any subsequent executive or regulatory actions that could invoke the International Emergency Economic Powers Act or other authorities using the Section 1260H and Section 1237 lists as a basis

DLA Piper’s National Security and Global Trade and Government Affairs and Public Policy teams are available to discuss options for exposure to these regulatory risks. For more information, please contact the authors.

 

[1] https://www.federalregister.gov/documents/2026/06/10/2026-11571/notice-of-availability-of-designation-of-chinese-military-companies.