The Public Company Accounting Oversight Board has proposed a framework for implementing a new law that could result in the delisting of Chinese companies.

Under the Holding Foreign Companies Accountable Act (HFCAA), which was passed in December, companies that fail to comply with American auditing standards for three years in a row can be delisted from U.S. exchanges.

The law is not aimed exclusively at China but according to legal experts, its most consequential aspects will impact Chinese issuers with securities listed and traded in the U.S. China currently does not allow the PCAOB to examine the audits of firms whose shares trade in America, citing national security concerns.

The rule proposed by the board on Thursday would govern how it would determine whether it is “unable to inspect or investigate completely registered public accounting firms headquartered in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.”

“A rule will promote transparency into the board’s processes and will ensure consistency over time in how the board exercises its judgment in applying the statute,” PCAOB Chairman William Duhnke said in a news release.

According to the rule, the board will assess whether the overseas authority’s position impairs its ability to “select engagements, audit areas, and potential violations to be reviewed or investigated;” its access to any document or information in the issuer’s control that it considers relevant to an inspection or investigation; and its ability to conduct inspections in a manner consistent with the HFCAA and its rules.

When the PCAOB makes its determination, it will issue a report to the U.S. Securities and Exchange Commission.

The SEC proposed a rule in March that would apply the HFCAA to an issuer that files “an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction” and that the PCAOB “is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction.”

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