SUMMARY

On Wednesday, August 9, 2023, the White House released an Executive Order (EO) on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern, laying the groundwork for the development of a U.S. Outbound Investment Program. This new Program is significant in that it is the latest in a string of U.S. government steps to move beyond just trade and law enforcement actions to address national security concerns related to transfer of technologies and knowledge. For investors and industry, this Program will require even more due diligence on partners and activities in China to ensure that U.S. persons are not investing in a way that could unduly empower Chinese military and intelligence efforts.

The release of the EO was accompanied by the Department of Treasury’s publication of the Advance Notice of Proposed Rulemaking (ANPRM), which launched a 45-day public comment period inviting feedback on implementation and development of the program. Specifically, the Treasury is developing a ruling that will, respective to certain technologies and products in a “country of concern”:

1. Prohibit U.S. persons from engaging in certain transactions; and
2. Require U.S. persons to notify the Treasury of certain other transactions.

Currently China (including Hong Kong and Macau) is the only country listed as a “country of concern.”