What's Happening?
The Fiscal Year 2026 National Defense Authorization Act (NDAA) includes the Comprehensive Outbound Investment National Security Act of 2025 (COINS Act), establishing a framework to regulate outbound investments by U.S. persons in sensitive technology
sectors. The COINS Act requires U.S. persons to notify the Department of Treasury of certain investments in countries of concern, such as China, and prohibits transactions that pose national security threats. The Act expands the definition of 'covered foreign persons' and includes new technology categories like high-performance computing and hypersonic systems.
Why It's Important?
The COINS Act represents a significant step in codifying U.S. outbound investment controls, reflecting growing concerns over national security and foreign influence in critical technology sectors. By expanding the scope of regulated transactions and countries, the Act aims to protect U.S. technological advantages and prevent adversaries from gaining access to sensitive technologies. This could impact U.S. businesses with international operations, requiring them to navigate new compliance challenges and potentially altering investment strategies.
What's Next?
The U.S. Treasury has 450 days to issue implementing regulations, which will define prohibited and notifiable technologies. Companies with investments in sensitive sectors should monitor these developments closely and prepare for compliance with the new framework. The Act's provisions will be in place for seven years unless reauthorized by Congress, indicating a long-term shift in U.S. investment policy.
