A new congressional investigation has accused major American banks of helping a Chinese battery giant raise billions of dollars despite US national security concerns and the company's alleged links to China's military establishment.
The report, released by the House Select Committee on the Chinese Communist Party, alleged that JPMorgan Chase and Bank of America underwrote the Hong Kong stock market debut of Contemporary Amperex Technology Co. Limited (CATL) in May 2025, months after the Pentagon classified the company as a "Chinese military company".
The committee said the banks proceeded with the deal despite bipartisan concerns over CATL's alleged connections to China's military-civil fusion programme and accusations linked to forced labour supply chains in Xinjiang.
"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," committee chairman John Moolenaar said in a statement.
CATL, the world's largest electric vehicle battery maker, was added to the Pentagon's Section 1260H list in January 2025 over allegations tied to China's military-civil fusion strategy.
According to the report, both banks relied heavily on CATL's assurances that the Pentagon designation was "erroneous" and accepted the company's denial of links to the Chinese military.
Congressional investigators alleged that CATL failed to fully answer due diligence questions related to the People's Liberation Army, dual-use technologies and other military-linked entities.
The report claimed Bank of America relied on third-party due diligence sourced from unnamed experts, including "a China-based 'new energy academic'" and "a Chinese EV data provider", while JPMorgan Chase concluded CATL had no involvement with "military items or 'dual use' goods or technology".
The committee further alleged that CATL maintained commercial relationships with several Chinese firms already facing US restrictions, including Huawei, China Mobile, China State Shipbuilding Corporation and NORINCO.
Investigators also claimed CATL held a stake in Wuhu Shipyard, described in the report as a defence-linked shipbuilder connected to China's naval sector.
The investigation additionally accused the banks of overlooking concerns tied to forced labour in Xinjiang. According to the report, CATL declined to provide complete supply chain audits, but the banks still accepted 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 unit of Zijin Mining Group, whose parent company had been added to the Uyghur Forced Labor Prevention Act entity list.
The report said Morgan Stanley internally acknowledged the UFLPA designation but proceeded after senior executives approved the transaction because "it was legal".
Congressional investigators estimated Morgan Stanley's fees from the deal at between USD 15.5 million and USD 23.1 million.
The committee has recommended legislation that would bar American financial institutions from underwriting or sponsoring fundraising deals involving 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.