Treasury Proposes COINS Act Rules to Expand Outbound Investments
- Department of the Treasury released a Notice of Proposed Rulemaking to implement the Comprehensive Outbound Investment National Security (COINS) Act, enacted in December 2025.
- The NPRM categorizes “pharmaceutical compounds” as a “prohibited technology” that would trigger an outright ban on certain outbound transactions with “countries of concern,” such as China.
- Other common transaction structures face significant regulatory exposure under the proposed language.
On October 22, 2026, the U.S. Department of the Treasury released a Notice of Proposed Rulemaking to implement the Comprehensive Outbound Investment National Security (COINS) Act, enacted in December 2025. Building significantly on the Outbound Investment Security Program (OISP) framework that has been active since January 2, 2025, the draft regulation broadens the scope of oversight.
Treasury Adds Biotechnology Prohibitions While Leaving Pharma Licensing Open
The NPRM categorizes “pharmaceutical compounds” as a “prohibited technology” that would trigger an outright ban on certain outbound transactions with “countries of concern,” such as China. Biotechnology trade groups and legal analysts have raised concerns regarding the policy impact on cross-border transactions. A Treasury official told reporters that the rule does not speak to pharmaceutical licensing deals, leaving U.S. drugmakers free to license molecules from Chinese companies.
Other common transaction structures face significant regulatory exposure under the proposed language. Venture capital models involving newly formed U.S. biotechs based on assets licensed from China could fall victim to the rules if the Chinese licensor takes an equity stake. Kendalle Burlin O’Connell told Pharmaceutical Executive Daily that her organization is reviewing the proposal and plans to submit formal comments.
Expanded Jurisdiction Designations and Core Terminology Changes
Alongside China (including Hong Kong or Macau), the NPRM lists Cuba, Iran, North Korea, Russia, and Venezuela as nations of concern.
International reaction to the expansion was swift. Chinese Foreign Ministry spokesperson Mao Ning stated that overstretching the concept of national security, adopting discriminatory measures against specific countries and imposing arbitrary restrictions on economic, trade and investment activities are not in the interests of any party. Mao added that China will closely follow relevant developments and take necessary measures to safeguard its legitimate rights and interests.
Public Comment Deadlines and Implementation Timeline for 2027
The regulatory filing carries no immediate legal effect, as the Treasury will set a formal effective date in a subsequent final rule. The public is welcome to provide feedback on the draft rules until December 7, with the official implementation of the final regulation anticipated for 2027.
