Treasury proposes wider limits on U.S. investment in adversary tech firms, adding biotechnology

By Anselm Dorsey

WASHINGTON — The Treasury Department has proposed rules that would widen federal limits on American investment in advanced-technology companies tied to China and five other countries, adding biotechnology to the list of covered sectors. The chairman of the House Foreign Affairs Committee praised the move.

The proposal, announced Oct. 22, carries out the Comprehensive Outbound Investment National Security Act, or COINS Act, which Congress passed as part of the fiscal 2026 National Defense Authorization Act. It is scheduled to appear in the Federal Register on Monday, Oct. 26. Public comments are due Dec. 7.

“Under President Trump’s leadership, we are committed to putting America’s national security first,” Treasury Secretary Scott Bessent said in the department’s announcement. He said the rules would “prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security” while giving investors “clarity” and a chance to comment. Christopher Pilkerton, the assistant secretary for investment security, said the rules are “designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors.”

House Foreign Affairs Chairman Brian Mast (R-Fla.) said in a statement Oct. 23 that the rules “will help constrain the growth of China’s military-industrial base and strategic technologies and ensure that China’s military cannot threaten U.S. service members with technologies developed using U.S. capital and know-how.” He called it “a major step toward stopping the offshoring of our crown-jewel technologies to our greatest foreign adversary.”

What the proposal would do

The rules would update Treasury’s Outbound Investment Security Program, which began under Executive Order 14105 of Aug. 9, 2023, and regulations Treasury published on Nov. 15, 2024. Those regulations covered China, including Hong Kong and Macau, in three sectors: semiconductors and microelectronics, artificial intelligence and quantum information technologies.

The COINS Act adds high-performance computing and hypersonic systems. It also lets the Treasury secretary add other sectors after consulting the appropriate congressional committees and taking public comment. Using that authority, the proposal adds biotechnology to the definition of “prohibited technology.”

The proposal follows the law in widening the list of “countries of concern” beyond China to include Cuba, Iran, North Korea, Russia and “the Bolivarian Republic of Venezuela under the regime of Nicolás Maduro Moros.” Treasury notes in the proposal that “that regime no longer exists,” because the United States recognized Delcy Rodríguez as Venezuela’s head of state on March 5, 2026.

U.S. persons would have to notify Treasury of some transactions and would be barred from others. The proposal keeps exceptions for publicly traded securities, securities of registered investment companies and certain limited-partner investments. It also exempts transactions that total no more than $50,000 over 12 months from the notification requirement, though not from the prohibitions.

Penalties and scale

The current regulations allow civil and criminal penalties. The proposal would keep only civil penalties, up to the maximum allowed under the International Emergency Economic Powers Act. Treasury says the COINS Act provides for civil penalties but not criminal ones.

In its regulatory analysis, Treasury estimates that about 150 investors engage in about 200 potentially covered transactions a year. It says it reached that figure by doubling the averages it found in commercially available deal data, to allow for uncertainty. The department asked for comment on whether that method is reasonable.

What comes next

Treasury said final rules, which will set the program’s effective date, will come “at a later date.” The proposal says the new rules will not apply retroactively and that the 2024 regulations will continue to govern activity during the period they covered.

The Inquisitor has asked the Treasury Department, the White House, Chairman Mast and House Foreign Affairs ranking member Gregory Meeks (D-N.Y.) for comment, and will update this story with any response.