US proposes wider outbound investment restrictions

The US Treasury has proposed expanding restrictions on certain American investments overseas, adding biotechnology to a framework covering sensitive technologies and introducing a route for transaction-specific feedback. The proposal appeared in the Federal Register on 26 October, following Treasury's announcement on 22 October. Written comments are due by 7 December 2026.

The draft would implement provisions of the Comprehensive Outbound Investment National Security Act, known as the COINS Act. It would require notification of some transactions involving covered foreign businesses and prohibit others. Treasury says final regulations will follow later and set the effective date. Publication of this proposal does not itself activate the expanded requirements.

More technologies and countries in scope

The existing Outbound Investment Security Program took effect on 2 January 2025. Its coverage includes specified semiconductor, artificial intelligence and quantum-technology activities connected to China, including Hong Kong and Macau. The new statute adds high-performance computing and supercomputing, as well as hypersonic systems, to the technology areas that the regulations must address.

Treasury has also proposed including specified biotechnology activities under its authority to identify additional technologies. The draft describes certain biomanufacturing processes, brain-computer interfaces and laboratory equipment, among other activities. Its restrictions depend on defined activities and technical parameters, rather than simply whether a business describes itself as a technology company.

The statutory list of countries of concern is wider too. Alongside China, Hong Kong and Macau, it includes Cuba, Iran, North Korea and Russia. The text also includes Venezuela under the regime of Nicolás Maduro Moros, using that specific qualification. Treasury presents the proposed restrictions as a response to national-security risks from investment in sensitive technologies.

Coverage would reach certain equity acquisitions, joint ventures and investments in new businesses or facilities. Some debt-financing arrangements and limited-partner investments in funds could also fall within the framework. A US person would be responsible for assessing whether a particular transaction was prohibited, subject to notification, excepted or outside the programme's jurisdiction.

Notifications and limited exceptions

For a transaction classified as notifiable, the proposed text generally requires a filing within 30 calendar days after completion. It separately addresses cases where a US person learns afterwards of facts that would have made a transaction notifiable or prohibited. In those circumstances, notification would be required promptly and no later than 30 calendar days after acquiring that knowledge.

The proposal retains exceptions rather than imposing a ban on every investment connected to a covered business. These include specified investments in publicly traded securities and investment funds, subject to the conditions in the text. Treasury also sets out exceptions for certain supporting financial services and intracompany transfers. It seeks comments on ordinary administrative transactions without proposing a separate definition for them.

One proposed small-transaction exception has a narrower reach than its dollar figure might suggest. Transactions totalling no more than $50,000 over the preceding 12 months with the relevant covered foreign person or joint venture could be excepted from notification. That threshold would not create an exception for a transaction otherwise prohibited under the rules.

Treasury's proposed knowledge standard would continue to examine whether a US person carried out a reasonable and diligent inquiry. It would expressly include consideration of information Treasury had supplied to that person. The department says it is seeking to preserve familiar elements of the existing system while implementing the statute's wider requirements.

Feedback would not amount to clearance

A new process would allow a person with a direct financial interest in an actual prospective transaction to request non-binding feedback. The request would need to concern a real transaction, not a hypothetical scenario, with its material terms identified in a binding written agreement or another binding document. Treasury could ask for further information before treating a request as complete.

Even a complete request would not oblige Treasury to respond. The proposed options include confidential written feedback or anonymised public guidance, and the department could decline to provide feedback. Any response would not constitute a licence, exemption or authorisation, would not bind a court or government agency, and would not prevent subsequent enforcement action.

The transition provisions distinguish earlier transactions from the expanded framework. Treasury says the new provisions would not operate retrospectively. Existing Part 850 regulations would continue to govern activities occurring from 2 January 2025 until the effective date of the final implementing regulations, including potential enforcement relating to that period.

The Federal Register notice invites comments on the draft and warns that submissions, including attachments and any personal or confidential business information they contain, will be made public. The immediate next step is that consultation, not the start of a new investment ban. Treasury says it will consider the responses before issuing final regulations.