us treasury expands curbs on us investment in chinese and other tech
The United States Treasury Department has moved to significantly broaden restrictions on American investments in sensitive technology sectors within China and other adversarial nations. In a proposal issued on October 22, 2026, the department outlined tighter rules aimed at preventing U.S. capital from advancing the military capabilities of strategic rivals. This move by the US Treasury expands the scope of investment scrutiny.
This action, driven by the administration of President Donald Trump and announced by Treasury Secretary Scott Bessent, implements the Comprehensive Outbound Investment National Security (COINS) Act passed by Congress in late 2025. The new regulations expand the scope of a program designed to scrutinize and prohibit investments that could threaten U.S. national security.
US Treasury expands investment oversight
The proposed rules expand the list of restricted technologies and the number of countries under scrutiny. While the program initially focused on China, the new regulations now officially name Russia, North Korea, Cuba, and Iran as “countries of concern.” This marks a formal expansion of the outbound investment screening regime beyond its initial focus.
At the core of the proposal is the addition of new technology categories subject to restriction. U.S. investments in foreign companies involved with biotechnology and hypersonic systems will now face either outright bans or mandatory notification requirements. Hypersonic systems are particularly sensitive, involving vehicles capable of traveling at more than five times the speed of sound.
These new categories join an existing list of advanced technologies that have been a focal point of U.S. national security efforts. These include semiconductors and microelectronics, quantum information technologies, high-performance computing, and artificial intelligence systems. The government has expressed concern that advances in these areas by adversaries could erode America’s military and intelligence advantages.
The continued focus on these sectors reflects a consistent bipartisan view on the importance of maintaining a technological edge, a sentiment broadly shared across Washington.
The regulations are not a blanket ban on all investment. The rules would apply only to investments exceeding a $50,000 threshold, and many types of passive financial investments, such as public stock purchases, are explicitly excluded. The focus remains on private equity, venture capital, and other direct investments that often come with the transfer of expertise and operational knowledge.
Implementing congressionally mandated security measures
This new proposal is the next step in a multi-year effort to build a comprehensive outbound investment security program. The legal foundation for these expanded rules is the COINS Act, which was passed as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2026 on December 18, 2025.
The act gave the Treasury Secretary the authority to define the specific technical parameters for restricted technologies.
The Treasury has published a Notice of Proposed Rulemaking (NPRM) to solicit feedback from the public and industry stakeholders. The comment period is set to close on December 7, 2026, after which the department will move toward issuing a final rule. This process allows investors and companies to weigh in on the practical implications of the proposed changes before they become binding.
The goal is to create a clear and targeted system that denies adversaries access to U.S. funding for their military modernization without unduly chilling legitimate economic activity. However, the complexity of global supply chains and international finance presents a significant challenge. The rules apply to “U.S.
persons,” a broad category including citizens, residents, and U.S.-organized entities, and require them to prevent foreign entities they control from making prohibited investments.
Building on a bipartisan foundation of restrictions
The latest rules from the Trump administration build directly on a framework initiated by its predecessor. The push to control outbound investments began with Executive Order 14105, issued by President Joe Biden on August 9, 2023. That order declared a national emergency to address the threat of certain countries exploiting U.S. investments to develop military and surveillance technologies.
Initially, the program targeted only the People’s Republic of China, including its Special Administrative Regions of Hong Kong and Macau. The technology sectors were limited to semiconductors, quantum information tech, and artificial intelligence. After a period of public comment and rulemaking throughout 2024, the Treasury issued a final rule that became effective on January 2, 2025.
The evolution from a presidential executive order to a congressionally mandated statute, the COINS Act, demonstrates a solidifying bipartisan consensus in Washington. Both political parties increasingly view the flow of American capital and technology to China as a critical national security vulnerability.
This strategic shift has had broad effects on international business, with companies in various sectors experiencing a new era of regulatory scrutiny. These developments highlight broader changes across global market dynamics.
The continuity of this policy across administrations signals to the investment community that these restrictions are not a temporary political measure but a long-term strategic priority for the United States. This consistency is intended to create predictability for businesses as they navigate the increasingly complex geopolitical landscape.
Enforcement begins with first-ever civil penalty
The seriousness of these regulations was underscored just weeks before the new rules were proposed. On October 7, 2026, the Treasury announced its first-ever enforcement action under the Outbound Investment Security Program (OISP), imposing a $200,000 civil penalty on Amidi, LLC.
The penalty resulted from Amidi’s failure to notify the Treasury about an investment made by one of its controlled foreign subsidiaries. The subsidiary had invested approximately $92,478 in April 2025 into a private Chinese AI company, Shanghai Qiongche Intelligent Technology Company Limited, also known as “Noematrix.” The company develops artificial intelligence, robotics, and embodied intelligence technologies—all areas of concern.
Treasury officials noted that they discovered the violation independently, sending a clear message that the department is actively monitoring for compliance. The penalties for violations can be severe, including civil fines of up to $368,136 or double the value of the transaction, whichever is greater. The Treasury can also refer willful violations for criminal prosecution and has the authority to compel divestment from prohibited investments.
This enforcement action serves as a concrete warning to venture capital firms, private equity, and other U.S. investors. It demonstrates that the government is not only creating rules but is also building the capacity to enforce them. The case highlights the due diligence required to track investments, even those made through complex offshore corporate structures.
Investment trends continue to evolve rapidly, but regulatory oversight is becoming a more significant factor in decision-making. The evolving regulatory landscape also impacts new investment strategies in various sectors.
Outlook for US investors and the future of tech competition
As the Treasury moves to finalize these expanded regulations, U.S. investors face an increasingly challenging compliance environment. The broadening scope of technologies and countries covered by the Outbound Investment Security Program requires a more sophisticated approach to due diligence. Firms will need to carefully vet potential investments to ensure they do not fall afoul of the new prohibitions and notification requirements.
The explicit goal of the policy is to slow down China’s military-civil fusion strategy, whereby it leverages civilian technology companies to enhance its military power. By restricting access to U.S. capital and expertise, Washington hopes to create bottlenecks in China’s development of next-generation weaponry and surveillance systems.
This strategy does not come without costs. Some in the tech and finance industries argue that such restrictions could inadvertently isolate U.S. firms from global innovation hubs and put them at a competitive disadvantage. However, the prevailing view in the U.S. government is that the national security risks posed by unfettered investment in adversarial tech sectors are too great to ignore.
With the public comment period for the latest proposal underway, the final form of the rules will be closely watched. But the direction of travel is clear: the guardrails on U.S. outbound investment are becoming higher and more extensive, reshaping the flow of capital in the escalating global technology competition.