Effective in January 2025, the U.S. Department of the Treasury issued a final rule (colloquially known as “Reverse CFIUS”) implementing the Outbound Investment Program, which prohibits U.S. persons from making certain investments involving a defined set of technologies (currently certain semiconductors/microelectronics, quantum computing, and artificial intelligence systems) with persons from countries of concern (currently only China) that pose a national security threat to the United States. Additionally, the Outbound Investment Program requires U.S. persons to notify the Treasury Department of certain other transactions involving persons from countries of concern that may contribute to a threat to U.S. national security. Despite some referring to the Outbound Investment Program as “Reverse CFIUS,” the program differs significantly in that there is no pre-approval process by the U.S. Government as is the case with mandatory filings that must be submitted and reviewed by the Committee on Foreign Investment in the United States (“CFIUS”) prior to closing for certain inbound investments by foreign persons in U.S. businesses. Both U.S. and non-U.S. investors alike should familiarize themselves with the requirements of the Outbound Investment Program.
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