Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern
The order declares a national emergency over the threat posed by countries of concern advancing sensitive U.S.-funded technologies — semiconductors, quantum information, and artificial intelligence — for military, intelligence, or surveillance purposes, and invokes the International Emergency Economic Powers Act to restrict American investment in those sectors abroad.
It directs the Treasury Department to issue regulations that will require U.S. investors to notify the government of certain transactions and outright prohibit others, making this the first executive order to use IEEPA authority to regulate outbound U.S. capital flows on national security grounds.
What this order does
What it orders
The order declares a national emergency under IEEPA and the National Emergencies Act, finding that countries of concern are exploiting U.S. investments — including intangible benefits like talent networks, market access, and management expertise — to accelerate development of advanced military and surveillance capabilities. It directs the Secretary of the Treasury, in consultation with Commerce and other agencies, to issue regulations that (1) require U.S. persons to notify Treasury of certain transactions involving covered foreign persons in semiconductors, quantum technologies, and AI, and (2) prohibit U.S. persons from engaging in other transactions that pose an acute national security threat. It also authorizes Treasury to compel divestment of prohibited transactions and to refer criminal violations to the Attorney General.
The order does not itself identify which specific transactions are notifiable or prohibited — those categories will be defined through a separate rulemaking process subject to public notice and comment. It carves out official U.S. government business and allows Treasury to exempt transactions determined to be in the national interest. A Annex to the order lists the designated countries of concern, though that list is not reproduced in the order's text as published.
Who it affects
U.S. persons — citizens, permanent residents, and U.S.-organized entities including their foreign branches — who invest in or transact with foreign companies in semiconductors, quantum information technology, or AI sectors located in or connected to designated countries of concern.
Why it matters
U.S. investors, venture capital firms, and corporations with dealings in covered technology sectors in countries of concern will face new disclosure obligations and potential outright bans on certain investments once regulations are finalized, marking a significant new constraint on cross-border capital flows for these industries.
What must happen and when
How the order is supposed to work
Treasury leads implementation by drafting regulations through notice-and-comment rulemaking; Commerce advises on industry analysis; State, Defense, Energy, and the intelligence community advise on national security implications. Once regulations take effect, U.S. persons must notify Treasury of notifiable transactions and refrain from prohibited ones. Treasury may issue civil administrative subpoenas and can compel divestiture of prohibited deals. Within one year of regulations taking effect, Treasury must assess whether to expand or narrow covered sectors, and must report to the President at least annually on effectiveness and recommended modifications.
Actions and deadlines
- Issue regulations establishing notifiable and prohibited transaction categories for covered foreign investments
- Assess whether to amend the regulations, including adjustments to covered technology definitions
- Provide the President an assessment of effectiveness and policy recommendations on covered sectors and countries
- Submit recurring reports to Congress on the declared national emergency