U.S. Treasury proposes expanding technology investment restrictions, sets Dec. 7 comment deadline
Key Facts
On October 22, 2026, the U.S. Treasury Department issued a notice of proposed rules to implement Title VIII of the COINS Act, expanding the U.S. outbound investment monitoring program for sensitive technologies. The proposal covers investments in China, Russia, North Korea and other countries designated as countries of concern, according to an Associated Press report. The new sectors cover hypersonic systems capable of reaching five times the speed of sound, supercomputing, biotechnology and artificial intelligence. Treasury said the goal is to prevent U.S. investment from being used to develop critical technologies that threaten U.S. national security. The department is inviting public comment on the updated program before final rules are adopted.
The rules do not impose a blanket ban on all investment in the covered countries; they require U.S. companies and individuals to notify Treasury of some proposed investments and directly prohibit other transactions. The notification requirement covers potential investments in six sectors and five specified countries, according to Reuters, while covered artificial intelligence investments fall into the prohibited category. Treasury added biotechnology to the proposed sectors under authority granted by the COINS Act. The proposed text also describes investment in covered AI systems as prohibited, rather than merely subject to reporting. This distinction means that the sector, the nature of the activity and the country involved will determine whether a transaction requires notification or is barred.
The rules include exemptions for some investments in publicly traded companies, as well as transactions valued at less than $50,000, according to Reuters. The $50,000 figure therefore is not a general threshold prohibiting every investment above that amount; the threshold appears among the stated exemptions, while other obligations depend on the type of transaction, sector and country. An earlier draft had attributed to the rules a ban on investments exceeding this amount, but the published details distinguish among notification, prohibition and exemption. This detail places the burden on U.S. companies and investors to verify transactions involving covered technologies and countries. Jason Chipman, a former Justice Department lawyer specializing in cybersecurity, investment rules and export controls, said the rule "will require more comprehensive compliance programs to manage risk."
The update is based on the COINS Act, which Congress passed on December 18, 2025, as part of the National Defense Authorization Act for fiscal year 2026, and which was incorporated into Title VIII of the Defense Production Act, according to Treasury. The previous program began with an executive order in 2023 and covered restrictions on U.S. investments in semiconductors, quantum computing and artificial intelligence destined for China, according to the Associated Press. The previous rules took effect on January 2, 2025, and remain in force until Treasury issues regulations implementing the COINS Act. Assistant Treasury Secretary Chris Pilkerton said the program aims to ensure the government can monitor types of investments that may threaten national security and prohibit them when appropriate. The department says the proposal strengthens the existing program and gives investors an opportunity to comment before a start date for the final rules is set.
The rules come as Treasury is already enforcing reporting requirements for outbound investments; in July, the department fined a U.S. company $200,000 for failing to report a $92,500 investment in a Chinese AI and robotics company, according to the Associated Press. The earlier action indicates that the program’s rules extend beyond setting out a new regulatory scope and include enforcement of existing reporting obligations. Craig Singleton of the Foundation for Defense of Democracies said the proposal sends markets a signal that Washington is tracking where U.S. capital goes and the capabilities it helps build. Former U.S. trade official Ryan Majerus described the proposal as "the first step on a relatively long path" before changes that could focus more heavily on enforcement. The coming period will reveal the final form of the obligations and exemptions investors will face.
Beijing rejected the proposal, with China’s Foreign Ministry saying that "expanding the concept of national security, taking discriminatory measures against specific countries, and imposing artificial restrictions on commercial, economic and investment activities serve no one’s interests." China’s Ministry of Commerce also said it opposed the plan and reserved the right to take unspecified countermeasures. Beijing added that the proposal could harm bilateral economic relations and conflict with the understanding reached by the two countries’ presidents, who met twice in the previous six months, according to a Reuters report. Treasury is accepting public comments on the updated program through December 7, 2026. After the deadline, the department will issue final rules at a later date, setting the program’s effective date.