What's Happening?
The Comprehensive Outbound Investment National Security Act of 2025 (COINS Act) has been included in the Fiscal Year 2026 National Defense Authorization Act (NDAA), establishing stricter regulations on outbound
investments by U.S. citizens in technology sectors. Signed by President Trump, the COINS Act requires U.S. persons to notify the Treasury Department about investments in 'countries of concern' such as Cuba, Iran, North Korea, Russia, and Venezuela. The Act aims to prevent national security threats by regulating investments in sectors that pose significant risks. It is seen as the inverse of the Committee on Foreign Investment in the United States (CFIUS), which regulates foreign investments in the U.S.
Why It's Important?
The COINS Act is crucial for national security as it seeks to prevent U.S. investments from inadvertently supporting foreign adversaries' technological advancements. By expanding the scope of regulated investments, the Act aims to protect sensitive technologies and intellectual property from being exploited by countries that pose security threats. This legislation reflects a broader strategy to safeguard U.S. interests in the global tech landscape, ensuring that domestic investments do not undermine national security. The Act's implementation could impact U.S. investors and tech companies, requiring them to navigate new regulatory landscapes.
What's Next?
The Treasury Department has 450 days to issue regulations implementing the COINS Act. During this period, stakeholders, including tech companies and investors, will need to assess the implications of the Act on their operations and investment strategies. The Act's enforcement will likely lead to increased scrutiny of U.S. investments in foreign tech sectors, potentially affecting international business relations. As the regulations take shape, companies may need to adjust their compliance frameworks to align with the new requirements, ensuring that their investments do not contravene national security interests.
