US Treasury Proposes COINS Act Draft to Scrutinize Biotech/AI Outbound Investments
The proposed rule would expand the U.S. outbound‑investment screening regime, targeting U.S. biotech and AI ventures seeking capital in China.
The Treasury’s draft COINS Act proposal, announced on Oct. 22, would widen the existing OFAC‑based screening to include any U.S. firm—particularly biotech and AI companies—looking to raise funds abroad, especially in China. The rule would require a new category of "national‑security‑material" permits, reclassifying investments that could facilitate dual‑use or critical‑infrastructure technology transfers. Firms advising clients on cross‑border funding or equity offerings will need to evaluate whether their clients’ upcoming deals fall within the broadened scope, potentially triggering new national‑security reviews. Counsel should prep clients to complete detailed due‑diligence packages and to work with the Treasury’s Office of Foreign Assets Control well ahead of any capital‑raising activity. The rule is still under public comment and could be finalized within the next few months, so monitoring Treasury releases and anticipating changes to the screening timeline is crucial.