Treasury proposes to extend outbound investment curbs to Russia and Iran

The US Treasury on 22 October proposed rules that would extend its outbound investment programme from China to Cuba, Iran, North Korea and Russia, and set 7 December as the last day for public comments, its press release and fact sheet say.

The notice of proposed rulemaking implements the COINS Act on outbound investment security, which Congress passed in the fiscal 2026 National Defense Authorization Act. The act tells Treasury to require notice of some deals in "notifiable technologies" and to prohibit others in "prohibited technologies", the press release says. Treasury will set an effective date only in the final rule, which it says will follow "at a later date".

Six countries and six technology areas

The fact sheet lists the countries of concern as China, including Hong Kong and Macau, Cuba, Iran, North Korea, Russia and "the Bolivarian Republic of Venezuela under the regime of Nicolás Maduro Moros". The rules now in force, 31 CFR Part 850, cover China alone, according to the law firm King & Spalding, and they stay in force until the final rule takes effect, the fact sheet says.

The fact sheet covers six technology areas: semiconductors and microelectronics, quantum information technologies, high-performance computing, hypersonic systems, biotechnology and a category the fact sheet calls "super intelligence" systems and the press release calls artificial intelligence systems. The statute lists five areas, and the press release says the Secretary chose to add biotechnology. Treasury Secretary Scott Bessent said the aim is to "prevent our adversaries from using U.S. investment to develop critical technologies".

Venezuela is named, but the regime is gone

The proposal defines a country of concern to include Venezuela under the regime of Nicolás Maduro Moros. The fact sheet says "That regime no longer exists" and that, as a result, "Venezuela does not meet the NPRM's definition of a country of concern". Reuters reported that Treasury added that the rule could still cover certain investments in Venezuelan entities.

Reach is set by the definition of a "covered foreign person". The fact sheet's definition includes a foreign person that is a citizen or permanent resident of a country of concern. King & Spalding adds that the proposal broadens the control test and that a principal place of business can be more than one location, including where the main business activities take place.

The press release says the rules would apply to US persons, including controlled foreign entities. The fact sheet says a notification must be filed "no later than 30 days after a transaction is completed", and, where a US person learns after completion that the transaction would have been covered, "no later than 30 days after the U.S. person's acquisition of such knowledge". Transactions that, in the aggregate across the preceding 12 months, do not exceed $50,000 are excepted from the notification requirement only, so the prohibition still applies to them.

The fact sheet also excepts a limited partner's, or an equivalent's, investment in a non-US pooled investment fund, such as a venture capital, private equity or fund-of-funds vehicle, where the US person's committed capital does not exceed $2 million or the investment is subject to a specific binding contractual assurance.

A US person may be treated as having knowledge in three ways, the fact sheet says: it has actual knowledge that the fact or circumstance exists or is substantially certain to occur, it has "an awareness of a high probability" that it exists or will occur, or it "could have possessed such information through a reasonable and diligent inquiry". It proposes civil penalties up to the maximum under the International Emergency Economic Powers Act, which King & Spalding puts at the greater of about $377,700 or twice the value of the transaction, and King & Spalding adds that Treasury could also compel divestment. The public has until 7 December to comment, through regulations.gov.

The knowledge test echoes the sanctions cases the site has followed. The Extreme Networks settlement concerned exports to a customer that OFAC said was owned by a blocked Russian group, and the Sanctions and Enforcement Ledger records the week's listings of emerging-market companies. Investors with US-person capital in emerging-market vehicles have until 7 December to tell Treasury how they would apply the tests above.