The Fiscal Year 2026 National Defense Authorization Act now formally directs the U.S. Department of the Treasury to regulate outbound investments in five specific technology sectors: semiconductor technologies and microelectronics, artificial intelligence systems, quantum information technologies, high-performance computing and supercomputing, and hypersonic systems. Under the Comprehensive Outbound Investment Security (COINS) Act, U.S. persons will be required to provide notification to Treasury regarding certain transactions involving covered foreign persons that are engaged in notifiable technologies.
Secretary Scott Bessent stated, “Under President Trump’s leadership, we are committed to putting America’s national security first,” as the Treasury issued proposed rules to implement the new regulations and prevent adversaries from using U.S. investment in critical technologies.
COINS Act Directs Treasury Review of Outbound Tech Investments
The proposed regulations from the U.S. Department of the Treasury now extend beyond the initially specified five technology sectors to include biotechnology, broadening the scope of outbound investment scrutiny. Assistant Secretary of the Treasury for Investment Security Christopher Pilkerton stated, “It will enhance the Outbound Investment Security Program and our efforts to protect U.S. national security.” The regulations outline categories of covered national security transactions and the scope of covered foreign persons.
They also specify a process for requesting non-binding feedback and submitting confidential information to Treasury, balancing national security concerns with the need for clarity in investment practices. The proposed rule details the knowledge standard expected of U.S. persons, requiring a reasonable and diligent inquiry before undertaking a transaction to develop critical technologies that threaten U.S.
Treasury is actively soliciting comments from stakeholders on all aspects of the proposed rule, including the scope of covered transactions, definitions of key terms, notification requirements and potential penalties for violations. The department will carefully consider this feedback before finalizing the implementing regulations, which will ultimately establish an effective date for the program.
Written comments can be submitted through regulations.gov, and the complete proposed rule, along with a fact sheet and additional information, is available on the Treasury’s website. Secretary Bessent said, “This important step also helps promote our commitment to an open investment environment by providing clarity to U.S. and foreign investors as well as an opportunity for them to provide feedback on the proposed regulations.” The goal is to create a program that not only safeguards national security but also encourages an open investment environment.
The proposed regulations are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors.
Christopher Pilkerton, Assistant Secretary of the Treasury for Investment Security
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