The Treasury Department has issued a proposed rule implementing the COINS Act (Comprehensive Outbound Investment National Security Act), which restricts certain U.S. investments in dual-use strategic technologies to prevent foreign adversaries from using American capital for military modernization and surveillance capabilities.
The COINS Act directs the Treasury Secretary to require notification for certain transactions involving covered foreign persons engaged in notifiable technologies, and to prohibit other transactions involving covered foreign persons engaged in prohibited technologies. The proposed rule covers five technology sectors: semiconductor technologies and microelectronics, artificial intelligence systems, quantum information technologies, high-performance computing and supercomputing, and hypersonic systems. The Treasury Department also added biotechnology to the proposed regulations.
"The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security," said Secretary Scott Bessent.
The proposed rule specifies requirements for U.S. persons, categories of covered transactions, definitions, the scope of covered foreign persons, excepted transactions, technical specifications for technologies, required notification information, and penalties for violations. Treasury is inviting public comments by a deadline available at https://www.regulations.gov, and final implementing regulations will follow with an effective date to be determined.