President Donald Trump signed into law a measure that will kick publicly traded Chinese companies off U.S.-based exchanges if they refuse to allow U.S. regulators to examine their finances.

Called the “Holding Foreign Companies Accountable Act,” the new law (S.945) will delist a foreign-owned company that refuses to comply with the U.S. Public Company Accounting Oversight Board’s (PCAOB) audit requirements for three consecutive years.

Congress passed the bill with strong bipartisan support earlier this month. Trump signed the bill into law Friday.

“Taking this action is crucial to hold Chinese companies accountable and to safeguard the millions of American families who rely on modest investments to retire, send their kids to college, and weather financial emergencies,” Sen. Chris Van Hollen (D-Md.), who co-authored the legislation in the Senate, said in a statement.

The bill was seen by U.S. legislators and regulators as pushing back against allegations of financial fraud within Chinese companies listed on U.S. exchanges, most recently with Luckin Coffee and video streaming service iQIYI. The law also pushes back against alleged Chinese government control of such companies.

China’s Foreign Ministry spokesman, Wang Wenbin, called the new law ”an unjustified political crackdown on Chinese enterprises” in remarks to reporters Monday.

The law “will seriously hinder the listing of Chinese enterprises in the United States and distort the basic norms of the market economy that the United States has always touted. This will also deprive U.S. investors and the public of the opportunity to share in the development dividends of Chinese enterprises and weaken the confidence of global investors in the U.S. capital market. At the end of the day, it will damage the international standing and reputation of the U.S. capital market,” Wenbin said.

The Securities and Exchange Commission and the PCAOB have taken steps to oversee implementation and oversight of the bill’s provisions, SEC Chairman Jay Clayton said Friday.

“The staff have been actively working on proposals relating to other recommendations, most notably enhanced exchange listing standards and access to audit work papers by the Public Company Accounting Oversight Board,” he said in a statement.

Clayton, who supported Congress’ efforts to open the finances of Chinese companies to audit inspection by U.S. regulators, also indicated he expects the SEC and the PCAOB to offer a rule proposal on the new law in 2021. As he is leaving his post at the end of 2020, Clayton said he is “disappointed that I will not have an opportunity to consider the staff’s recommendation.”

According to the PCAOB, audit firms in China and Hong Kong issued audit reports for 188 public companies in 2019, with a combined global market capitalization (U.S. and non-U.S. exchanges) of approximately $1.9 trillion. Some of the companies potentially affected include Alibaba Group and Baidu, and future listing plans of major private Chinese corporations could also be prevented.

Bill also aims to ensure companies aren’t government-controlled

One of the bill’s provisions will require foreign-owned companies to certify they are not owned or controlled by a foreign government. The bill orders companies to “report the percentage of shares owned by governmental entities where the issuer is incorporated, whether these governmental entities have a controlling financial interest, information related to any board members who are officials of the Chinese Communist Party, and whether the articles of incorporation of the issuer contain any charter of the Chinese Communist Party,” according to the bill’s summary.

These requirements will create additional hurdles for publicly traded Chinese companies to overcome if they want to remain on U.S.-based exchanges. It has been suspected by the U.S. government that the Chinese Communist Party can access, manipulate, and control Chinese companies as they see fit.

This issue was highlighted in a Wall Street Journal story published Sunday detailing how Jack Ma, owner of the financial technology giant Ant Group, recently offered to hand over whichever parts of his company the country needs.

“You can take any of the platforms Ant has, as long as the country needs it,” Ma said to a group of Chinese regulators in November, the newspaper reported.

The meeting took place before Ma was to take Ant Group public. Those plans were scuttled by Chinese regulators as China’s president, Xi Jinping, ordered the country’s regulators to rein in Ant Group and several other of the countries’ biggest financial technology companies, the WSJ reported.