Proposed Regulations Would Bring Significant Expansion of the U.S. Outbound Investment Security Program

4 November 2026

On October 22, 2026, the U.S. Department of the Treasury ("Treasury") released a Notice of Proposed Rulemaking (the "Proposed Rule") setting forth proposed regulations to implement Subtitle C of the Comprehensive Outbound Investment National Security ("COINS") Act, enacted last December as part of the Fiscal Year 2026 National Defense Authorization Act.  The U.S. Outbound Investment Security Program ("OISP") has been in effect since January 2, 2025, implementing Executive Order 14105, "Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern."  The COINS Act codified the OISP into law and requires Treasury to issue implementing regulations by March 13, 2027.  The Proposed Rule would replace the existing OISP regulations and introduce amendments thereto, while retaining the core existing structure that prohibits certain investments by U.S. persons and requires notification to Treasury of others involving a company or other person tied to countries of concern and engaged in certain sensitive technology activities.  Notably, the Proposed Rule contemplates a number of key changes to the existing OISP, including most significantly newly prohibiting certain U.S. investments in the biotechnology space and much more broadly prohibiting AI-related investments.  The Proposed Rule also expands the application of "covered foreign entities" in a manner that would increase compliance obligations and program requirements as knowledge of the covered foreign entity would be included in what a U.S. person knows, or should know, in terms of whether it is engaging in OISP-subject activities.

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