The US Treasury unveiled a revised framework for monitoring and restricting American investment abroad, broadening the scope of its existing security programme to encompass biotechnology alongside semiconductors and advanced computing. The new proposal targets China, Russia, North Korea and other designated adversarial states, with a comment period closing on 7 December.
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
Treasury Secretary Scott Bessent
Released on Thursday, the draft implements provisions from the COINS Act, which Congress included in its 2026 defence bill. The framework would require American investors to notify the Treasury of certain transactions while prohibiting others entirely. The initiative builds on an executive order signed by then-President Joe Biden in 2023, which had already limited US capital flows into Chinese semiconductor, quantum computing and artificial intelligence ventures, according to reporting from the Associated Press.
Expanded scope and geographic reach
The legislation identifies five core technology sectors: semiconductors, artificial intelligence, quantum technology, supercomputing and hypersonic systems. Treasury has exercised discretionary authority under the act to add biotechnology to this list.
The geographic scope has also expanded significantly. Beyond China—including Hong Kong and Macau—the framework now encompasses Cuba, Iran, North Korea and Russia. Venezuela under Nicolás Maduro appears on the list, though Treasury's accompanying documentation notes that Venezuela does not currently satisfy the draft's definitional criteria.
Terminology shift and enforcement mechanisms
A notable change involves regulatory language: the draft replaces references to "AI systems" with "super intelligence systems," reflecting President Trump's 29 September executive order that rebranded artificial intelligence terminology. Under the revised framework, Treasury would expand its prohibition on investments in these systems, eliminating the current allowance for investors to simply report such transactions.
Violations could trigger civil penalties reaching the maximum permitted under the International Emergency Economic Powers Act, with Treasury also possessing authority to compel divestment of non-compliant holdings.
The proposed regulations are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors
Christopher Pilkerton, Treasury's assistant secretary for investment security
Timeline and international context
The Federal Register will publish the draft proposal on 26 October, with the public comment window extending until 7 December. Final regulations will subsequently be issued, establishing an implementation date.
The announcement arrives just days after China introduced its own export restrictions targeting advanced artificial intelligence models and semiconductor designs. Meanwhile, Pentagon technology chief Emil Michael recently cautioned that export control measures could constrain the operations of AI research facilities.
Source: The Next Web
