Treasury proposes ban on biotech and certain Chinese AI investments
U.S. Treasury proposes new rules banning investments in biotech and specific Chinese AI sectors.
Why it matters: Companies must navigate stricter scrutiny on outbound investments in sensitive tech, impacting deal structures and compliance strategies.
- The Treasury issued the proposal on October 22, 2026, under the COINS Act of 2025.
- Proposed rules prohibit U.S. investments in biotechnology and 'superintelligence' AI technologies.
- Expanded 'countries of concern' include China, Russia, Iran, North Korea, Cuba, and Venezuela (Maduro regime).
- Public comments on the proposal are open until December 7, 2026, with a nonbinding investor feedback process introduced.
On October 22, 2026, the U.S. Department of the Treasury announced a Notice of Proposed Rulemaking to implement the Comprehensive Outbound Investment National Security Act of 2025 (COINS Act). This proposal aims to expand the existing Outbound Investment Security Program (OISP) by targeting critical technology sectors considered vital to national security.
The key focus areas include prohibitions on U.S. investments in the biotechnology sector and certain artificial intelligence (AI) systems. Notably, it addresses AI systems defined as 'superintelligence' developed by covered foreign persons, though specific definitions remain unclear. This step is part of efforts to prevent "adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security," according to Treasury Secretary Scott Bessent.
The proposed rule also broadens the list of 'countries of concern.' Originally targeting China, the restrictions now extend to Russia, Iran, North Korea, Cuba, and Venezuela under the Maduro regime, reflecting heightened geopolitical considerations.
To support investor compliance, the Treasury introduced a nonbinding feedback process enabling investors to seek guidance on potential transactions before proceeding. This measure aims to provide greater clarity to both U.S. and foreign investors navigating these regulations.
Stakeholders can submit public comments until December 7, 2026, before the rule is finalized. Legal and compliance teams advising on cross-border investment deals must closely monitor these developments and assess impacts on deal structures and regulatory commitments.
By the numbers:
- October 22, 2026 — date the Treasury issued the COINS Act proposed rule
- December 7, 2026 — deadline for public comments on the proposed rule
- 2025 — year the COINS Act was enacted
What's next: The public comment period closes December 7, 2026; a final rule will follow after review.