JPMorgan Chase and Bank of America underwrote the Hong Kong Stock Exchange initial public offering of Contemporary Amperex Technology Co. Ltd. (CATL) in May 2025, months after the US Department of Defense designated the Chinese battery giant a 'Chinese military company' — a move a new congressional investigation says put Wall Street profits ahead of national security.

What the Congressional Report Found

The House Select Committee on the Chinese Communist Party released a report alleging that both banks proceeded with the CATL IPO despite warnings from the Department of Defense and bipartisan concerns over the company's alleged ties to China's military and forced labour networks in Xinjiang. CATL had been placed on the Pentagon's Section 1260H list in January 2025 over its alleged participation in China's military-civil fusion strategy.

According to the report, both banks relied heavily on CATL's own assurances that its Pentagon designation was 'erroneous' and accepted the firm's denials of any military links. Congressional investigators alleged CATL failed to fully answer due diligence questions regarding ties to the People's Liberation Army, dual-use technologies, and military-linked entities.

Due Diligence Concerns

The report raised pointed questions about the quality of each bank's independent verification. Bank of America's third-party due diligence reportedly relied on unnamed sources, including 'a China-based new energy academic' and 'a Chinese EV data provider.' JPMorgan, for its part, concluded that CATL had no transactions involving 'military items or dual-use goods or technology' — a finding investigators appear to dispute.

Investigators further alleged that CATL maintained corporate and commercial ties with several entities already under US restrictions, including Huawei, China State Shipbuilding Corporation, NORINCO, and China Mobile. CATL also reportedly held a stake in Wuhu Shipyard, described in the report as a defence-linked shipbuilder serving China's naval sector.

Forced Labour Allegations

The report accused both banks of overlooking evidence linking CATL's supply chain to forced labour concerns in Xinjiang. Investigators said CATL refused to provide full supply chain audits, yet the banks still accepted the company's assurances that there were 'no connections to forced labour.'

In a separate finding, the committee examined Morgan Stanley's role in sponsoring the Hong Kong IPO of Zijin Gold International, a subsidiary of Zijin Mining Group, whose parent company and subsidiaries had been added to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. The report said Morgan Stanley internally acknowledged the UFLPA designation but senior executives approved the transaction because 'it was legal.' The bank reportedly estimated fees from the deal at between $15.5 million and $23.1 million.

What the Committee Chair Said

Select Committee Chairman John Moolenaar said in a statement: 'My committee's investigation calls for serious policy changes to ensure what JPMorgan and Bank of America did never happens again. American banks must not help Chinese military companies raise money, because in doing so, they provide not only access to funding, but also legitimacy and credibility to companies that are helping our adversary build up its military.'

Recommendations and What Comes Next

The committee recommended legislation prohibiting US financial institutions from underwriting or sponsoring capital-raising for blacklisted entities linked to foreign adversaries. It also called for CATL and its subsidiaries to be added to the Treasury Department's Non-SDN Chinese Military-Industrial Complex list. Whether Congress acts on these recommendations — and how the banks respond — will determine the lasting impact of the probe on Wall Street's access to Chinese capital markets.