USA: On the features of the control mechanism in the sphere of outbound investment

The present paper focuses on the potential U.S. economic and national security effects of certain U.S. outbound investments. In October 2024, the U.S. Department of the Treasury issued The Final Rule /FR to implement Executive Order 14105, “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern”. The United States has become the first Western economy to regulate outbound investment. FR defines countries of concern as China and its special administrative regions of Hong Kong and Macau. The key concern for the American side is the transfer of capital and the intangible advantages, including “enhanced standing and prominence, managerial assistance, investments and talent networks, market access, and enhanced access to additional financing”. The Final Rule’s goal is to prevent US investment from advancing the development of sensitive technologies and products in China. To avoid hindering all United States investments into countries of concern or imposing broad restrictions on the activity of United States persons. transaction parties are expected to determine whether a transaction is prohibited, requires notification, or is permissible without notification. The new regulations prohibit a US person from engaging in investment transactions primarily involving three technology fields—semiconductors and microelectronics, quantum computing, and artificial intelligence. The final rule elaborates on a “knowledge standard”, i.e., knowledge a U.S. person must have about the facts and circumstances of each type of transaction to trigger the obligations under the rule.