The State Board of Administration is smoothly implementing legislation to divest from China-owned companies and expand sanctions on Iran-linked firms, as it examines 13 companies for potential links to Iran and about 500 for Chinese divestment, according to incoming executive director Chris Spencer.

State moves to divest stock in China-owned companies and to expand sanctions involving companies working with Iran are going “very smoothly,” the incoming head of Florida’s investments agency said this week.

Chris Spencer said about 13 companies are being put on a “continued examination list” that could result in them landing on a list of “scrutinized” companies with links to Iran. Spencer added that about 500 other companies are facing the China divestment list.

Lawmakers passed a measure in 2023 dealing with Iran-linked companies and a bill this year about China-related divestment.

“The implementation of both of those bills have gone very smoothly,” Spencer told the state Investment Advisory Council on Monday.

Spencer has served as Gov. Ron DeSantis’ budget chief but will become executive director of the State Board of Administration, which oversees investments for the state pension system and other funds. The transition will take place after DeSantis signs a budget for the 2024-2025 fiscal year, which starts July 1, and issues vetoes.

“I’m anticipating being here full-time in this position very, very soon,” Spencer said.

The expansion of the list of “scrutinized” companies involved with Iran was part of a November 2023 special legislative session in which lawmakers passed measures to show support for Israel in its fight against Hamas, which is backed by Iran.

The list was created in 2007 and aimed at companies with links to Iran’s petroleum industry. That was expanded during the 2023 special session to companies with links to such things as the financial, construction, textile and manufacturing sectors of the economy.

“As we continue to move forward … and get more annual financial information on investment activities of various companies that may be in that scope, we’ll continue to update that list,” Spencer said. “But that’s, I think, a good start for us as we are implementing that legislation.”

The Legislature this year unanimously passed the bill about China (HB 7071). Signed by DeSantis on May 15, the bill requires the State Board of Administration to develop a plan by Sept. 1 for selling holdings tied to companies that are majority-owned by the Chinese government, the Chinese communist party or the Chinese military. Divestment would then have to occur within one year.

The agency has been targeting companies with 50.1 percent or more ownership by the Chinese government.

When the law was crafted, the exposure of the state’s investments to such companies was estimated at under $300 million.

A House analysis released in February put investments in more than 200 Chinese state-owned entities at $277 million, or 0.16 percent, of the retirement system. Of that, $53.6 million was linked to China Construction Bank Corp. and $46.4 million was in Kweichow Moutai, which specializes in a particular Chinese liquor. The majority of the investments were each less than $5 million.

Similar bans have been imposed involving Cuba since 1993, Sudan and Iran since 2007 and Venezuela since 2018.

In December 2021, DeSantis, Attorney General Ashley Moody and Chief Financial Officer Jimmy Patronis, in their role as trustees of the State Board of Administration, directed a review of Florida Retirement System investments to find links to the Chinese communist party.

The state paused new investments in China in March 2022.