The Treasury Department on Thursday proposed regulations to carry out a law enacted in December that widens federal rules on American investment in sensitive technology abroad, and it used new authority under that law to add biotechnology to the fields where deals with companies tied to countries of concern could be prohibited or would have to be reported to the government.
The notice of proposed rulemaking is meant to put the Comprehensive Outbound Investment National Security Act, known as the COINS Act, into effect. Congress passed the measure as part of the Fiscal Year 2026 National Defense Authorization Act, and Treasury released the text of the proposal late on Oct. 22, Export Compliance Daily reported. The department said the law codifies the government's approach to regulating certain outbound investments by U.S. persons and builds on a program Treasury already runs.
"Under President Trump's leadership, we are committed to putting America's national security first," Treasury Secretary Scott Bessent said in a statement announcing the proposal. The regulations, he said, "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."
The law works on two tracks. It directs Treasury to require Americans to notify the department of certain transactions with covered foreign persons engaged in what it calls notifiable technologies, and to prohibit certain other transactions with covered foreign persons engaged in prohibited technologies. Congress named five fields in which Treasury may draw those technical lines: semiconductors and microelectronics, AI systems, quantum information technologies, high-performance computing and supercomputing, and hypersonic systems.
The statute also lets the secretary add technologies that enable the military, intelligence, surveillance or cyber-enabled capabilities of a country of concern, after consulting the relevant congressional committees and going through notice and comment. Bessent used that power to add biotechnology to the proposed regulations, and the proposal would bring both hypersonic systems and biotechnology into the program's scope, according to Export Compliance Daily.
That would widen the program considerably. The rules in force since Jan. 2, 2025, cover certain U.S. investments in entities in or connected to China, Hong Kong and Macau that work in quantum computing, AI and semiconductors, Treasury has said. Under the proposal, investment requirements would also apply to deals in countries including Cuba, Iran, North Korea and Russia, the trade publication reported.
The program dates to an August 2023 executive order that declared a national emergency over countries of concern seeking to develop sensitive technologies critical to military, intelligence, surveillance or cyber-enabled capabilities. It produced its first civil penalty in July, when Treasury fined Amidi, LLC $200,000 for failing to report a roughly $92,000 investment that the company's subsidiary, a Chinese fund, made in a Chinese embodied AI company. The department disclosed that penalty on Oct. 7.
The new proposal fills in the mechanics. It lays out how the requirements would apply to U.S. persons and the foreign entities they control, which transactions would be covered or excepted, what a notification must contain and how investors could seek nonbinding feedback from the department. It also sets a knowledge standard describing the reasonable and diligent inquiry an investor is expected to make before a deal, and it defines the conduct that would count as a violation and the penalties that would follow.
"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," said Christopher Pilkerton, Treasury's assistant secretary for investment security.
Treasury presented the rule as consistent with a strong, open investment environment, and Bessent said the proposal would give U.S. and foreign investors clarity "as well as an opportunity for them to provide feedback." The department is seeking comment on every part of the plan, including the scope of covered transactions, definitions of key terms, the notification requirements and the penalty and enforcement process, and said it would weigh that input before writing final rules.
Comments are due Dec. 7, Export Compliance Daily reported. Nothing in the proposal takes effect yet: Treasury said final implementing regulations will come at a later date and will set the effective date for the expanded program.