US Treasury moves to regulate outbound investments

US Treasury
Image: Adobe Stock/eurobanks

The US Department of the Treasury has finalised a new rule regulating outbound investments, which will take effect in January 2025.

The rule targets US citizens, permanent residents and US-based entities investing in certain critical sectors that could advance the strategic capabilities of countries of concern, particularly China.

The sectors affected include semiconductors, micro-electronics, quantum information technologies and artificial intelligence. Under the rule, any investment that meets specific criteria – such as direct equity acquisitions, loans, or joint ventures – will require prior notification or may even be prohibited.

The rule aims to curb the flow of US capital into technologies that could enhance national security threats. This policy is aligned with a broader US strategy to prevent sensitive technologies from fuelling adversaries’ military and technological advancements.

US policy for screening inbound foreign investment has moved towards tighter oversight in recent years, especially with regard to China, and this trend is likely to continue or even accelerate with the
re-election of Donald Trump as president.