Outbound Investment Security Program Regulations
Key claim: U.S. persons would have to notify the Treasury Department about some investments in foreign companies working on specified technologies and would be banned from other investments in foreign companies working on prohibited technologies.
Abstract
(Proposed Rule · Treasury Department, Investment Security Office) This proposed rule sets forth regulations that would implement Subtitle C of the Comprehensive Outbound Investment National Security Act, which is codified at Title VIII of the Defense Production Act. The proposed rule would require United States persons to provide notification to the U.S. Department of the Treasury regarding certain transactions involving foreign persons that are engaged in notifiable technologies; and prohibit United States persons from engaging in certain other transactions involving foreign persons that are engaged in prohibited technologies. Where consistent with Title VIII, the proposed rule incorporates certain definitions and concepts from the current regulations governing the Outbound Investment Security Program. The proposed rule also would add applicability dates to the regulations, such that those regulations would continue to apply to activities that occurred within the relevant timeframe.
Why this matters
Outbound investment controls are a relatively new front in U.S. trade and national-security policy, extending restrictions beyond exports and inbound CFIUS review to cover where U.S. capital flows abroad. Codifying the program via Treasury rulemaking signals durability of the regime and sets compliance expectations for U.S. investors in sensitive foreign technology sectors.