Treasury Proposes Expanded Outbound Investment Restrictions

Steptoe's international compliance team reports that the U.S. Treasury has issued a proposal to expand outbound investment restrictions under the COINS Act. The evidence available here is a single firm alert headline, so the proposal's specifics — covered jurisdictions, the technology or infrastructure sectors involved, the transaction forms caught (equity, debt, joint ventures), the mix of prohibitions versus notification requirements, and the comment deadline and any effective date — are not established and should be verified against the Federal Register notice and Treasury's own materials.

Why sophisticated counsel should care: the U.S. outbound investment program, administered by Treasury under national security authority, already reaches certain transactions by U.S. persons involving covered persons in adversary-linked jurisdictions, and it operates as a screening obligation on deal teams, funds, limited partners and lenders, not merely on the parties named in a transaction. An expansion therefore lands directly on private equity, venture and corporate development pipelines, and on diligence and disclosure questions asked by foreign counterparties.

Practical next steps: map current U.S.-person exposure, including covered funds, LP commitments and pending deals, against the proposal's proposed scope; test whether deal structures, signing calendars and disclosure covenants need adjusting ahead of a comment filing; and track Treasury's docket for the revised proposal and any final rule.