Treasury Levies First OISP Penalty Over Unreported China AI Investment
Treasury's first-ever Outbound Investment Security Program penalty, announced October 7, 2026, hits Amidi LLC for a missing notification on a $92,478 investment by its Chinese subsidiary in a robotics and AI company.
On October 7, 2026, Treasury announced its first civil penalty under the Outbound Investment Security Program (OISP, 31 C.F.R. Part 850): $200,000 against Amidi LLC, the Plug and Play Tech Center parent, for failing to notify Treasury of a $92,478 April 2025 investment by its Chinese subsidiary in Shanghai Qiongche Intelligent Technology Co., a robotics, AI and embodied-intelligence company. Treasury said it identified the deal through routine compliance and market monitoring and chose a notification failure rather than a prohibited transaction or a large deal.
For major-firm clients the signal is procedural rather than monetary: obligations attach to controlled foreign entities, so a U.S. parent must file notifiable-entity notifications within 30 days of closing and take "all reasonable steps" to block prohibited activity abroad, using intercompany compliance agreements, governance rights, training, documented internal controls and periodic testing. A knowledge standard, including "warning signs" and purposeful avoidance of information, means diligence must be reasonable and diligent pre-closing. The next development to watch is the March 13, 2027 deadline for Treasury's COINS Act implementing regulations, which codify OISP under the Defense Production Act, add Russia, Iran, North Korea, Cuba and possibly Venezuela, add high-performance computing, supercomputing and hypersonics, extend the "knowingly directing" bar from prohibited to notifiable transactions, and expand FinCEN whistleblower rewards.