Treasury Proposes Sweeping Expansion of Outbound Investment Bans

Treasury's 22 October 2026 NPRM (91 Fed. Reg. 67396) would implement the COINS Act, replacing 31 C.F.R. Part 850 with a new Part 851 and extending the outbound investment program to Cuba, Iran, North Korea and Russia. Most consequentially, it would drop the notification-only tier for AI, relabelled "super intelligence" under Executive Order 14434, so covered transactions in any SI developer would be prohibited regardless of computing thresholds — a choice Treasury made although the statute left the parameters open, and one likely to draw heavy comment. Biotechnology, including small molecules, vaccines, cell and gene therapies and monoclonal antibodies, would also become prohibited technology with no notification tier, potentially reaching much of China's pharma and life-sciences tools sector; licensing and procurement contracts generally stay outside, while co-development and joint ventures need structure-specific analysis. For asset managers, public securities exceptions survive, the BDC exception is dropped, LP commitments above $2 million need binding assurances covering both notifiable and prohibited transactions, "knowingly directing" extends to notifiable transactions, and a $50,000 de minimis applies only to notifiable deals. Comments are due 7 December 2026; final regulations are due by 13 March 2027.