• Specific categories of covered transactions: The program is anticipated to focus on U.S.
persons undertaking certain types of transactions that could convey intangible benefits,
specifically: acquisition of equity interests (e.g., via mergers and acquisitions, private
equity, venture capital, and other arrangements); greenfield investments; joint ventures;
and certain debt financing transactions that are convertible to equity.
• Involving covered foreign persons: The restrictions are anticipated to apply to
investments in entities that are engaged in activities related to defined sub-sets of
technologies and products, and that are organized under the laws of a country of concern,
have a principal place of business in a country of concern, or are majority-owned by
country of concern individuals or entities. Presently the E.O. lists the PRC as a country
of concern.
• Deliberate approach to excepted transactions: Treasury is considering creating an
exception for certain types of passive and other investments that may pose a lower
likelihood of conveying intangible benefits or in an effort to minimize unintended
consequences. For example, Treasury is considering excepting from the program’s
coverage certain U.S. investments into publicly-traded securities, index funds, mutual
funds, exchange-traded funds, certain investments made as a limited partner, committed
but uncalled capital investments, and intracompany transfers of funds from a U.S. parent
company to its subsidiary. The scope and nature of each of these potential exceptions is
under consideration as detailed in the ANPRM.
The ANPRM provides initial details on the sub-sets of technologies and products within the three
categories identified in the E.O.:
• Semiconductors and microelectronics: Treasury is considering prohibiting U.S.
investments in PRC entities engaged in the development of electronic design automation
software or semiconductor manufacturing equipment; the design, fabrication, or
packaging of advanced integrated circuits; and the installation or sale of supercomputers.
Treasury is also considering requiring notification for U.S. investments in PRC entities
engaged in the design, fabrication, and packaging of less advanced integrated circuits.
• Quantum information technologies: Treasury is considering prohibiting U.S.
investments in PRC entities engaged in the production of quantum computers and certain
components; the development of certain quantum sensors; and the development of
quantum networking and quantum communication systems. Treasury is not currently
considering a separate notification requirement for quantum information technologies.
• Certain artificial intelligence systems: Treasury is considering requiring notification for
U.S. investments in PRC entities engaged in activities related to software that
incorporates an artificial intelligence (AI) system and is designed for certain end-uses that
may have military or intelligence applications and pose a national security risk. Treasury
is also requesting comments on how to shape a prohibition on U.S. investments in PRC
entities engaged in a narrow set of activities related to software that incorporates an AI
system and is designed for particular end uses with national security implications, e.g.,