Treasury proposes new rules for US investment in sensitive technology

Treasury issued a notice of proposed rulemaking to implement Subtitle C of the Comprehensive Outbound Investment National Security Act, known as the COINS Act.[1] Under the proposal, US persons would have to notify Treasury about certain transactions involving covered foreign persons engaged in notifiable technologies, while certain transactions involving prohibited technologies would be barred.[1] The proposed obligations would also extend to US persons’ controlled foreign entities.[1] Treasury says the COINS Act builds on its existing Outbound Investment Security Program, which took effect on January 2, 2025.[1][2]

The proposed covered transactions include equity and contingent-equity acquisitions, certain convertible or rights-bearing debt financing, and joint ventures.[1] The proposed countries of concern include China, Hong Kong and Macau, as well as Cuba, Iran, North Korea, Russia and Venezuela under Nicolás Maduro Moros.[1] A US person’s relevant knowledge could include actual knowledge, awareness of a high probability, or information obtainable through reasonable and diligent inquiry.[1] In practice, teams assessing a potential transaction would need to consider both its structure and what information was available about the foreign person and activity.

A notification would generally be due within 30 days after a transaction is completed, or within 30 days after a person later learns that the transaction was covered.[1] The proposal would except an investment if committed capital does not exceed $2 million or if it has a specific binding contractual assurance.[1] A separate exemption would apply to transactions totaling no more than $50,000 over the preceding 12 months, but only from the notification requirement.[1] Securities issued by investment companies such as index funds, mutual funds and exchange-traded funds would also be excepted.[1] These thresholds and exceptions have distinct scopes, so they should not be treated as interchangeable.

The proposal covers semiconductor technology and microelectronics, SI systems, quantum information technologies, high-performance computing and supercomputing, hypersonic systems, and biotechnology.[1] It would expand semiconductor prohibitions to include radiation-hardened and photonic integrated circuits, high-bandwidth memory and additional advanced-chip categories.[1] It would broadly prohibit US investment in country-of-concern entities developing any SI system, replacing the existing notification requirement for those transactions with a prohibition.[1] The proposal also adds certain biotechnology and hypersonic activities to the prohibited categories.[1] Written comments are due December 7, 2026, and Treasury says the proposal is for public consideration rather than an implementation of Subtitle C.[1]