Treasury Proposes Broad Expansion of US Outbound Investment Rules to China
The Treasury’s new NPRM under the COINS Act would tighten oversight of U.S. investments in China, potentially reshaping cross‑border capital flows.
The Department of the Treasury’s Notice of Proposed Rulemaking, released on Oct. 22, 2026, expands the scope of the Comprehensive Outbound Investment National Security Act (COINS Act) to more aggressively scrutinize U.S. entities investing in China. Under the proposal, additional investment categories—including technology, critical infrastructure, and certain joint ventures—would trigger enhanced disclosure, licensing, and post‑investment monitoring requirements. Practices that routinely engage in foreign investment or cross‑border M&A may need to reassess due‑diligence protocols, evaluate existing holdings, and determine whether any investments could trigger the new thresholds. The Treasury has opened a 60‑day comment period, giving firms an early window to shape final rules before potential enforcement dates in late 2027 or 2028. Counsel should review client portfolios for exposure, advise clients on possible compliance steps such as filing for special licenses, and consider divestment or restructuring strategies if investments cannot meet the expected security review criteria. The rule, if adopted, could impose significant red tape on U.S. philanthropic, private equity, and corporate investors, thereby reshaping capital‑flows into China.