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

On 2 January 2025, the Department of Treasury’s 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 enters into force. 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 a notification of other transactions. Furthermore, the Final Rule excepts 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.