On October 26, 2026, the Department of the Treasury (“Treasury”) issued a Notice of Proposed Rulemaking (“NPR”) that would implement Subtitle C of the Comprehensive Outbound Investment National Security Act (“COINS Act”) to expand the coverage of the existing Outbound Investment Security Program (“OISP”) (see Update of October 8, 2026).

The OISP came into effect on January 2, 2025. As currently enforced, the rules either (1) prohibit certain transactions without an exemption from Treasury (“prohibited transactions”); or (2) require U.S. persons to notify Treasury of certain other transactions (“notifiable transactions”). Both categories cover investments made directly or through covered foreign persons connected to a “country of concern” that are engaged in specified activities in the sensitive technology sectors of quantum computing, artificial intelligence, and semiconductors. The NPR seeks to expand the OISP through a number of key proposals.

Key Proposals

  1. New processes: Establish a procedure for requesting confidential, non-binding feedback on a potentially prohibited transaction, and a possible public, non-exhaustive database of covered foreign persons;
  2. Knowledge standard: In assessing whether a company undertook “reasonable and diligent inquiry” in connection with an alleged violation, Treasury will consider whether a U.S. person “appropriately considered information provided by the Treasury Department prior to undertaking the transaction (including Treasury feedback on a potentially prohibited transaction)”;
  3. New technology sectors: Create notification requirements for certain high-performance computing interconnects and hypersonic technologies, and impose prohibitions on the development or production of hypersonic systems and certain biotechnology activities;
  4. Countries of concern: Add Cuba, Iran, North Korea, and Russia to the list (Venezuela was initially included in the COINS Act, but the rules specify that the Maduro regime no longer exists);
  5. Super intelligence (SI) systems: Remove notification requirements and instead only impose prohibitions on certain investments in SI, which was previously referred to as artificial intelligence; and
  6. De minimis exception: Create an exception for transactions that would otherwise be notifiable transactions if they do not exceed $50,000 in the aggregate over the preceding 12 months across the covered national security transactions or provision of funds to the relevant covered foreign person or joint venture.

Treasury is accepting public comments on this NPR until December 7, 2026. Comments must be submitted via the Federal eRulemaking Portal at https://www.regulations.gov under Docket No. TREAS-DO-2026-0595.