The U.S. Department of the Treasury has issued a notice seeking public comment on the implementation of an Executive Order aimed at protecting national security technologies. The order, issued by President Biden, identifies China, Hong Kong, and Macau as countries of concern. It proposes a new program to protect technologies critical to military innovation, including semiconductors, quantum information technologies, and artificial intelligence. The Treasury is inviting public input to help shape the program, which will not change the U.S.’s open investment climate but will target investments in highly sensitive technologies.
“The Biden Administration is committed to keeping America safe and defending America’s national security through appropriately protecting technologies that are critical to the next generation of military innovation.”
U.S. Department of the Treasury
The Executive Order directs the Treasury to issue regulations prohibiting U.S. persons from engaging in certain transactions involving technologies and products that pose a significant national security threat. It also requires U.S. persons to notify the Treasury of transactions involving technologies and products that could threaten national security. The technologies and products of concern fall into three categories: semiconductors and microelectronics, quantum information technologies, and artificial intelligence.
“Treasury welcomes comments and views from a wide range of stakeholders on all aspects of how the Secretary should implement this new program.”
U.S. Department of the Treasury
Public Participation in Rulemaking Process
In implementing the Executive Order, the Treasury is seeking early stakeholder participation in the rulemaking process by issuing an ANPRM. The public is invited to offer comments, provide data, and share other information that may be useful in developing the program. The ANPRM does not implement the Executive Order, but it provides additional clarity and transparency, and gives the public an opportunity to contribute to the formulation of the new program.
The ANPRM provides initial details on key terms and aspects of the program’s implementation. The Treasury is particularly interested in input on the sub-sets of national security technologies and products related to semiconductors, quantum information technology, and artificial intelligence systems.
Maintaining Open Investment Climate
Despite the new program, the U.S. will continue to benefit from an open investment climate. The program is narrowly targeted at investments in highly sensitive technologies and products to protect U.S. national security. The Treasury anticipates excepting certain transactions, including potentially those in publicly-traded instruments and intracompany transfers from U.S. parents to subsidiaries.
The Treasury is welcoming comments and views from a wide range of stakeholders on all aspects of how the new program should be implemented. This input will be taken into account as the Treasury develops draft regulations, refines the definitions of key terms, sets forth the notification requirements, and establishes the penalty and enforcement processes for violations.
Written comments on the ANPRM can be submitted within 45 days. The ANPRM will be followed by draft regulations at a later date.
“The United States benefits from an open investment climate and this new program will not change that. It is narrowly targeted at investments in highly sensitive technologies and products for the purposes of protecting U.S. national security.”
U.S. Department of the Treasury
Executive Summary
The U.S. Department of the Treasury has issued a notice seeking public comment on implementing an Executive Order aimed at protecting national security technologies, including semiconductors, quantum information technologies, and artificial intelligence, from investments that may pose a threat. The new program, which will be implemented by the Treasury, is designed to complement existing export control and inbound investment screening tools, while maintaining an open investment climate.
- The U.S. Department of the Treasury issued an Advance Notice of Proposed Rulemaking (ANPRM) to seek public comment on implementing an Executive Order (E.O.) issued on August 9.
- The E.O. addresses U.S. investments in certain national security technologies and products in countries of concern, including the People’s Republic of China, Hong Kong, and Macau.
- The Biden Administration aims to protect technologies critical to military innovation, including semiconductors, microelectronics, quantum information technologies, and artificial intelligence.
- The E.O. will establish a new national security program, administered by the Treasury, to prohibit certain transactions involving these technologies and require notification of other transactions that may pose a threat to U.S. national security.
- The Treasury seeks early stakeholder participation in the rulemaking process and welcomes comments and views on all aspects of the program’s implementation.
- The new program is narrowly targeted at investments in highly sensitive technologies and products to protect U.S. national security, and will not change the U.S.’s open investment climate.
- The Treasury anticipates excepting certain transactions, including those in publicly-traded instruments and intracompany transfers from U.S. parents to subsidiaries.
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