§4581. Prohibition on investments

(a) In general

The Secretary may prohibit, in accordance with regulations issued under subsection (e), a United States person, including its controlled foreign entities, from knowingly engaging in a covered national security transaction in any prohibited technology.

(b) Evasion

Any action that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in subsection (a) is prohibited.

(c) Exemptions

(1) National interest exemption

Subject to subsection (d), the Secretary is authorized to exempt from the prohibition set forth in subsection (a) any activity determined by the President, in consultation with the Secretary, or delegated to the Secretary, in coordination with the Secretary of Commerce, the Secretary of State, and, as appropriate, the heads of other relevant Federal departments and agencies, to be in the national interest of the United States.

(2) Intelligence exemption

Regulations issued under subsection (e) shall not apply to any authorized intelligence activities of the United States.

(d) Congressional notification

The Secretary shall-

(1) notify the appropriate congressional committees not later than five business days after issuing an exemption under subsection (c); and

(2) include in such notification an identification of the national interest justifying the use of the exemption, subject to appropriate confidentiality and classification requirements.

(e) Regulations

(1) In general

The Secretary, in consultation with the Secretary of Commerce, the Secretary of State and, as appropriate, the heads of other relevant Federal departments and agencies, may issue or update existing regulations to carry out this section subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, and not subject to the requirements of section 4559 of this title. The regulations issued pursuant to this paragraph shall, as necessary, amend, terminate, supersede, revoke, or streamline existing requirements in part 850 of title 31, Code of Federal Regulations (the Outbound Investment Rule) and shall provide a reasonable timeframe for compliance.

(2) Non-binding feedback

(A) In general

The regulations issued under paragraph (1) shall include a process under which a person can request to receive non-binding feedback on a confidential basis, or as anonymized guidance to the public, as to whether a transaction would constitute a covered national security transaction in a prohibited technology.

(B) Authority to limit frivolous feedback requests

In establishing the process required by subparagraph (A), the Secretary may prescribe limitations on requests for feedback identified as frivolous for purposes of this subsection.

(3) Notice; opportunity to cure

(A) In general

The regulations issued under paragraph (1) shall account for whether a United States person has self-identified and self-disclosed a violation of the prohibition set forth in subsection (a) in determining the legal consequences of that violation.

(B) Self-disclosure letters

The regulations issued under paragraph (1) shall dictate the form and content of a letter of self-disclosure, which shall include relevant facts about the violation, why the United States person believes its activity to have violated the prohibition set forth in subsection (a), and a proposal for mitigation of the harm of such action.

(4) Low-burden regulations

In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable-

(A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulations;

(B) adopting the least burdensome alternative that achieves regulatory objectives; and

(C) prioritizing transparency and stakeholder involvement in the process of issuing the rules.

(5) Burden of proof

In accordance with section 556(d) of title 5, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary.

(Sept. 8, 1950, ch. 932, title VIII, §801, as added Pub. L. 119–60, div. H, title LXXXV, §8521, Dec. 18, 2025, 139 Stat. 1924 .)

Statutory Notes and Related Subsidiaries

Comprehensive Outbound Investment National Security

Pub. L. 119–60, div. H, title LXXXV, Dec. 18, 2025, 139 Stat. 1920 , provided that:

"Subtitle A-General Matters

"SEC. 8501. SECRETARY DEFINED.

"Except as otherwise provided, in this title [enacting this subchapter and this note], the term 'Secretary' means the Secretary of the Treasury.

"SEC. 8502. SEVERABILITY.

"If any provision of this title or any amendment made by this title, or the application thereof, is held invalid, the validity of the remainder of this title or any amendment made by this title and the application of such provision to other persons and circumstances shall not be affected thereby.

"SEC. 8503. AUTHORIZATION OF APPROPRIATIONS.

"(a) In General.-There is authorized to be appropriated $150,000,000 to the Department of the Treasury, out of which amounts may be transferred to the Department of Commerce to jointly conduct outreach to industry and persons affected by this title or any amendment made by this title, and to administer the provisions of this title or any amendment made by this title, for each of the first two fiscal years beginning on or after the date of the enactment of this title [Dec. 18, 2025], to carry out this title or any amendment made by this title.

"(b) Hiring Authority.-

"(1) By the president.-The President may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, United States Code, not more than 15 individuals directly to positions in the competitive service (as defined in section 2102 of that title) to carry out this title or any amendment made by this title.

"(2) By agencies.-The Secretary and the Secretary of Commerce may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, United States Code, individuals directly to positions in the competitive service (as defined in section 2102 of that title) of the Department of the Treasury and the Department of Commerce, respectively, to carry out this title or any amendment made by this title.

"SEC. 8504. SENSE OF CONGRESS.

"It is the sense of Congress that-

"(1) due to the fact that there are countless known and unknown entities in countries of concern, to include the People's Republic of China (PRC), developing dual-use strategic technologies that benefit a foreign adversary's military modernization efforts, surveillance states, and human rights abuses, restricting certain United States outbound investments into these technologies in countries of concern is necessary to prevent harm to United States national security and foreign policy interests; and

"(2) the President should therefore exercise the authorities granted in this title or any amendment made by this title to prevent countries of concern from exploiting United States capital to undermine United States national security and foreign policy interests.

"SEC. 8505. TERMINATION.

"This title and any amendment made by this title shall cease to have any force or effect on the date that is seven years after the date of the enactment of this Act [Dec. 18, 2025].

"Subtitle B-Imposition of Sanctions

"SEC. 8511. IMPOSITION OF SANCTIONS.

"(a) In General.-The President may impose the sanctions described in subsection (b) with respect to any foreign person determined to be a covered foreign person.

"(b) Sanctions Described.-The President may exercise all of the powers granted to the President under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of a foreign person that is determined to be a covered foreign person pursuant to subsection (a).

"(c) Penalties.-The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) shall apply to any person who violates, attempts to violate, conspires to violate, or causes a violation of any prohibition of this section, or an order or regulation prescribed under this section, to the same extent that such penalties apply to a person that commits an unlawful act described in section 206(a) of such Act (50 U.S.C. 1705(a)).

"(d) Exception for Intelligence and Law Enforcement Activities.-Sanctions under this section shall not apply with respect to-

"(1) any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.); or

"(2) any authorized intelligence activities of the United States.

"(e) Exception for United States Government Activities.-Nothing in this section shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.

"(f) Report to Congress.-

"(1) In general.-Not later than one year after the date of the enactment of this Act [Dec. 18, 2025], and annually thereafter for seven years, the President shall submit to the appropriate congressional committees a report that states whether any foreign person on the Non-SDN Chinese Military-Industrial Complex Companies List is a covered foreign person.

"(2) Form.-The report required by paragraph (1) shall be submitted in unclassified form, but may include a classified annex.

"(g) Administrative Provisions.-The President may exercise all authorities provided under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this section.

"(h) Rule of Construction.-Nothing in this section may be construed to limit the authority of the President to designate foreign persons for the imposition of sanctions pursuant to any other provision of Federal law, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

"SEC. 8512. DEFINITIONS.

"In this subtitle:

"(1) Appropriate congressional committees.-The term 'appropriate congressional committees' means-

"(A) the Committee on Financial Services and the Committee on Foreign Affairs of the House of Representatives; and

"(B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate.

"(2) Country of concern.-The term 'country of concern' means the People's Republic of China, including the Hong Kong and Macau Special Administrative Regions.

"(3) Covered foreign person.-The term 'covered foreign person' means a foreign person-

"(A) that is incorporated in, has a principal place of business in, or is organized under the laws of a country of concern;

"(B) that is a member of the Central Committee of the Chinese Communist Party or member of the political leadership of a country of concern;

"(C) that is the state or the government of a country of concern, as well as any political subdivision, agency, or instrumentality thereof;

"(D) that is subject to the direction or control of any entity described in subparagraphs (A) through (C); or

"(E) that is owned in the aggregate, directly or indirectly, 50 percent or more by an entity or a group of entities described in subparagraphs (A) through (C); and

"(F) that knowingly engaged in significant operations in the defense and related materiel sector or the surveillance technology sector of the economy of a country of concern.

"(4) Foreign person.-The term 'foreign person' means a person that is not a United States person.

"(5) Knowingly.-The term 'knowingly', with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.

"(6) Non-SDN chinese military-industrial complex companies list.-The term 'Non-SDN Chinese Military-Industrial Complex Companies List' means the list maintained by the Office of Foreign Assets Control of the Department of the Treasury under Executive Order 13959, as amended by Executive Order 14032 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance certain companies of the People's Republic of China), or any successor order.

"(7) Person.-The term 'person' means an individual or entity.

"(8) United states person.-The term 'United States person' means-

"(A) any United States citizen or an alien lawfully admitted for permanent residence to the United States;

"(B) an entity organized under the laws of the United States or of any jurisdiction within the United States (including any foreign branch of such an entity); or

"(C) any person in the United States.

"SEC. 8513. EXCEPTION RELATING TO IMPORTATION OF GOODS.

"(a) In General.-The authorities and requirements to impose sanctions authorized under this title shall not include the authority or requirement to impose sanctions on the importation of goods.

"(b) Good Defined.-In this section, the term 'good' means any article, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data.

"Subtitle C-Prohibition and Notification on Investments Relating to Covered National Security Transactions

"SEC. 8521. PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO COVERED NATIONAL SECURITY TRANSACTIONS.

"[Enacted this subchapter.]

"Subtitle D-Securities and Related Matters

"SEC. 8531. REQUIREMENTS RELATING TO THE NON-SDN CHINESE MILITARY-INDUSTRIAL COMPLEX COMPANIES LIST.

"(a) Report.-

"(1) In general.-Not later than two years after the date of the enactment of this Act [Dec. 18, 2025], and biennially thereafter for six years, the President shall submit to the appropriate congressional committees a report that states whether any of the following foreign persons qualifies for inclusion on the Non-SDN Chinese Military-Industrial Complex Companies List:

"(A) Any PRC person listed on the Military End-User List (Supplement No. 7 to part 744 of the Export Administration Regulations).

"(B) Any PRC person listed pursuant to section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 [Pub. L. 116–283] (10 U.S.C. 113 note).

"(C) Any PRC person listed on the Department of Commerce's Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations).

"(D) Any PRC person listed on the Federal Communications Commission's Covered List pursuant to the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1601 [et seq.]).

"(E) Any PRC person listed on the Uyghur Forced Labor Prevention Act Entity List pursuant to the Uyghur Forced Labor Prevention Act (P.L. 117–78) [22 U.S.C. 6901 note].

"(2) Process required.-To prepare the reports required by paragraph (1), the President shall establish a process under which the Federal agencies responsible for administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1) shall share with each other all relevant information that led to the identification of the entities described in such lists.

"(3) Risk-based prioritization framework.-In making the initial determinations under paragraph (1), the Secretary may establish a risk-based prioritization framework factoring in prioritization of entity review submitted to the Secretary by the Federal agencies administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1).

"(4) Annual reports to the appropriate congressional committees.-The report under paragraph (1) may summarize findings concerning entities previously reviewed pursuant to this section that do not necessitate additional review by the Secretary.

"(5) Matters to be included.-The Secretary shall include in the report required by paragraph (1) an overview of the criteria required for listing on the Non-SDN Chinese Military-Industrial Complex Companies List. The heads of the Federal agencies administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1) shall provide to the Secretary for use in the report an overview of the criteria for entity identification or listing on each respective list.

"(b) Definitions.-In this section:

"(1) Appropriate congressional committees.-The term 'appropriate congressional committees' means-

"(A) the Committee on Financial Services and the Committee on Foreign Affairs of the House of Representatives; and

"(B) the Committee on Banking, Housing, and Urban Affairs of the Senate.

"(2) Country of concern.-The term 'country of concern'-

"(A) means the People's Republic of China; and

"(B) includes the Hong Kong Special Administrative Region and the Macau Special Administrative Region.

"(3) Non-SDN chinese military-industrial complex companies list.-The term 'Non-SDN Chinese Military-Industrial Complex Companies List' means the list maintained by the Office of Foreign Assets Control of the Department of the Treasury under Executive Order 13959, as amended by Executive Order 14032 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance certain companies of the People's Republic of China), and any successor order.

"(4) PRC person.-The term 'PRC person' means a foreign person that-

"(A) is incorporated in a principal place of business in, or is organized under the laws of, a country of concern;

"(B) is a member of the Central Committee of the Chinese Communist Party;

"(C) is the state or the government of a country of concern, as well as any political subdivision, agency, or instrumentality thereof; or

"(D) is owned in the aggregate, directly or indirectly, 50 percent or more by an entity or a group of entities described in subparagraph (A), (B), or (C)."