United States of America: Adopted Treasury rule implementing Executive Order addressing investments in certain national security technologies and products in countries of concern

On 28 October 2024, the Department of Treasury adopted the Final Rule in the matters of Executive Order (EO) No. 14105 addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern. The Executive Order (EO) empowers the US Treasury Secretary to reduce or forbid US investments in Chinese entities operating within three sectors, semiconductors and microelectronics, quantum information technologies, and artificial intelligence (AI) systems. The primary objective of this rule is to protect against the employment of American capital and expertise in advancing China's technologies that could potentially enhance its military capabilities, thereby jeopardising US national security. The final rule prohibits certain transactions by US persons and requires notification of other transactions. Furthermore, the final rule exempts certain transactions, such as publicly traded securities, derivatives or intracompany transactions, and provides an exemption if the transaction is in the national security interests of the US. The final rule will enter into force on 2 January 2025.