U.S. Treasury proposes outbound investment rules, drops Venezuela from restricted country list

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Highlights

U.S. Treasury proposed COINS Act rules to screen outbound investments into China, Cuba, Iran, North Korea, and Russia, removing Venezuela from the restricted country list.
The draft rules require notification for investments in six sectors and ban artificial intelligence-related investments in the five designated countries, with biotechnology newly added to the covered sectors.
Exceptions allow transactions under $50,000 and investments in public companies, while U.S. pharmaceutical licensing with China is exempt, accommodating key industry concerns.

Proposed screening regime expands sector and country coverage

As reported by Reuters, the U.S. Treasury Department on Thursday announced proposed rules to screen outbound investment in China, Russia and other countries under the Comprehensive Outbound Investment National Security Act of 2025, or COINS Act. The department is accepting public comments through Dec. 7 on the proposal, which follows legislation passed by Congress in December after a bipartisan effort that began under former President Joe Biden in 2023.

The law significantly expands U.S. outbound investment controls by requiring firms and individuals to notify Treasury about some planned investments and barring others outright when they are deemed to threaten U.S. national security. The covered list now includes China, Cuba, Iran, North Korea and Russia, while Venezuela is removed because, Treasury says, the Maduro government no longer exists after the former president was captured by U.S. forces in January.

Treasury says the current Venezuelan government led by Delcy Rodriguez does not meet the law's definition, although certain investments involving Venezuelan entities could still fall under the proposed rule. The framework does not prohibit all investment in covered countries, but instead targets specific investments in entities involved in dual-use technologies that could support military programs, surveillance states or human-rights abuses.

The proposal requires notification for prospective investments in six sectors across five designated countries, while banning investments tied to artificial intelligence. Treasury also adds biotechnology to the five sectors identified in the legislation, joining advanced semiconductors and microelectronics, artificial intelligence systems, quantum information technologies, high-performance computing and supercomputing, and hypersonic systems.

National security and industry implications

Treasury Assistant Secretary Chris Pilkerton told Reuters the program is intended to give the government the ability to monitor and potentially prohibit investments that pose risks to U.S. national security. He says the concern extends beyond the capital itself to the networks, supply chains and related relationships that can develop from those investments.

The department says some advanced biotechnologies pose acute security risks, citing the proliferation of biological weapons, the development of brain-computer interfaces and threats to U.S. supply chain security. It also says rapid advances in artificial intelligence over the past two years contributed to the decision to impose an outright ban on AI-related investments in the target countries, reflecting doubts about whether the most advanced models can be effectively distinguished or regulated.

The draft rules include exceptions for investments in publicly traded companies and for transactions valued at less than $50,000. Investors would also be able to seek exemptions for transactions considered to be in the national interest of the U.S., while potential licensing agreements by U.S. pharmaceutical companies with China are not included, meeting a key demand from major drugmakers such as Pfizer.

The release of the proposal also offers a signal on Washington's policy direction toward Beijing. Although President Donald Trump has pursued a less restrictive approach to Chinese technologies in his second term and hosted Chinese President Xi Jinping for a state visit last month, the proposed rules indicate the administration is still seeking to maintain pressure on China's technology ambitions in selected sectors.

Our earlier report on the Bank of England’s push for “bare metal” recovery planning explained why regulators want major banks to build independent fallback systems that can keep critical services running after a severe cyber attack. It highlighted how advances in AI are increasing the scale and complexity of cyber threats, prompting supervisors to demand stronger end-to-end operational resilience and recovery options beyond traditional defences.

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