The Departments of the Treasury and Commerce recently provided reports to Congress describing plans under consideration to regulate outbound investment, as required by the 2023 Consolidated Appropriations Act. Key highlights of such plans based on these official reports, as well as other statements and reporting, include the following:

The Biden administration will likely prohibit some investments into China and other countries of concern while also collecting information on other investments through a notification process in order to inform future action. By contrast, the administration is not expected to establish a thorough review process (a “reverse CFIUS”) for specific investments.

The current focus is on investments into a subset of key advanced technologies that could enhance the capabilities of countries of concern in ways that threaten U.S. national security. Although Treasury and Commerce did not identify specific technology sectors in their written reports, other reporting indicates that the administration will almost certainly cover semiconductors and quantum computing, while some subset of artificial intelligence is also under consideration.

The administration appears to be still debating whether to cover any forms of passive investment or to cover only investment that includes some form of “know how” transfer or support. Remarks by Commerce Secretary Raimondo, however, suggest that the emphasis may be on the latter type of investment, such as non-passive private equity and venture capital investments.