The U.S. Department of the Treasury’s outbound investment regulations took effect on January 2, 2025, prohibiting U.S. persons from investing in specific Chinese companies in critical sectors like semiconductors and AI. President Trump’s January 20 memorandum mandates a review of these regulations to assess their effectiveness in addressing national security threats. The regulations define “covered foreign persons” and “covered transactions,” stipulating notification requirements for certain investments. Violations can incur severe civil and criminal penalties. Exceptions exist for publicly traded securities and specific transactions. For compliance guidance, stakeholders are encouraged to consult legal experts.
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