Global Trade & Foreign Policy Insights

On June 21, 2024, the U.S. Department of the Treasury’s (Treasury) Office of Investment Security released proposed language for the Outbound Investment Security Program (hereafter, the Proposed Rule).

It’s been another big year on the national security front. The Biden administration finally published its long-awaited Executive Order (E.O.) restricting U.S. investors from making investments in Chinese companies working on certain technologies and products. Evidence is mounting that the Committee on Foreign Investment in the United States (CFIUS or the Committee) is taking longer than ever to process transactions and, even when foreign investors can avoid CFIUS review, local communities are starting to fill the gaps in CFIUS’s authorities by making certain investments untenable. Finally, the Department of Energy (DOE) issued proposed guidance on its interpretation of “foreign entity of concern” (FEOC), a term that is becoming popular in national security-related statutes and regulatory frameworks.

Earlier this month, on August 9, 2023, the Biden administration issued its long-awaited Executive Order (the E.O.) announcing new restrictions on the ability of U.S. persons to invest in Chinese companies developing certain types of sensitive technologies and products. The new E.O., titled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern,” directs the U.S. Department of the Treasury (Treasury) to issue regulations that will either prohibit or require notification of outbound investments in Chinese companies undertaking identified activities relating to certain products and technologies in the following three industry sectors: (1) semiconductors and microelectronics, (2) quantum information technologies, and (3) artificial intelligence.