The US Department of the Treasury has begun enforcing the Outbound Investment Security Program (OISP), despite ongoing discussions about potential reforms. The program, which took effect on January 2, 2025, regulates certain transactions involving US persons and entities with ties to China, including Hong Kong and Macau. Transactions related to semiconductors, quantum computing, or specific artificial intelligence technologies are under scrutiny.
Treasury has started contacting US investors who may have violated OISP regulations. This enforcement process mirrors the approach used by the Committee on Foreign Investment in the United States (CFIUS). Initial contact is made through an email from the “Office of Global Transactions,” requesting a phone call to discuss a confidential matter. Specific details of potential violations are shared during these calls, followed by questions via email about whether the transaction was covered under OISP.
President Donald Trump issued a memorandum in January 2025 directing an assessment of whether OISP should be modified or replaced. Subsequently, another memorandum suggested expanding restrictions on US outbound investment in sectors linked to China’s Military-Civil Fusion strategy.
Treasury Secretary Scott Bessent is working with Congress on clear rules for outbound investments concerning China. He emphasized that OISP is vital for national security by restricting China from benefiting from US investments.
Changes to OISP are anticipated in the coming months, possibly broadening its scope beyond current sectors like semiconductors and AI. Until then, Treasury remains committed to enforcing existing rules. Parties involved in transactions must consider OISP restrictions before proceeding with investments related to companies connected to China.
For assistance with OISP inquiries or concerns about compliance, parties are advised to consult legal experts.
