Treasury's New Outbound Investment Security Program Rule Targeting Investments In China's Tech Industry And Recent Guidance

On Jan. 2, 2025, the US Department of the Treasury's ("Treasury") final rule implementing the Outbound Investment Security Program ("OIP") went into effect, under which US persons are prohibited from engaging in, or are required to provide notification to Treasury of, certain investments involving persons of so-called "Countries of Concern" (currently, the People's Republic of China, including the Special Administrative Regions of Hong Kong and Macau) that operate in certain technology sectors ("Covered Foreign Persons," and such transactions involving Covered Foreign Persons, "Covered Transactions").¹ Specifically, the OIP seeks to minimize the "intangible benefits" from US investment that certain foreign adversaries may exploit to "accelerate and increase the success of the development of sensitive technologies" against US interests.² Addressing these concerns, the new restrictions and reporting requirements are focused on investments relating to specified