Sam Kleiner and Keith Shomig are Partners and Quinn Dang is an Of Counsel at Paul Hastings LLP. This post is based on their Paul Hastings memorandum.
On October 22, 2026, the U.S. Department of the Treasury (Treasury) released a notice of proposed rulemaking (the Proposed Rule) to implement the Comprehensive Outbound Investment National Security Act of 2025 (the COINS Act), together with a Fact Sheet and FAQs.[1] The Proposed Rule effectively builds on the Outbound Investment Security Program (the Existing Rule), which prohibits U.S. persons from making certain technology related investments with respect to China. In particular, the Proposed Rule would expand the program’s technological and geographic scope. Secretary of the Treasury Scott Bessent stated that the Proposed Rule “would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security.”[2] Comments are due December 7, 2026, and the Existing Rule remains in effect until a final rule takes effect.[3]
The most notable aspects of the Proposed Rule are with respect to artificial intelligence (AI) and biotechnology. The Existing Rule treats certain investments in AI as prohibited and others as subject to notification. The Proposed Rule would eliminate the notification category, effectively prohibiting all covered investments (i.e., those involving covered foreign persons) in companies that develop AI systems. The Proposed Rule would also add biotechnology as a prohibited sector, even though the COINS Act does not name that sector.
In this client alert, we discuss the key provisions of the Proposed Rule and offer important takeaways for multinational companies and investors.
