Comprehensive Outbound Investment National Security Act of 2025
Summary
The Comprehensive Outbound Investment National Security Act of 2025 aims to protect U.S. national security by imposing sanctions on certain persons in the People's Republic of China and regulating outbound investments to countries of concern. It focuses on prohibiting or requiring notification for investments in specific technologies that could enhance the military, intelligence, surveillance, or cyber capabilities of these countries. The act also addresses securities and related matters, particularly concerning the Non-SDN Chinese Military-Industrial Complex Companies List.
The bill grants the President authority to impose sanctions and requires the Secretary of the Treasury to issue regulations for prohibiting and notifying investments. It also mandates several reports to Congress on enforcement actions, technology assessments, and multilateral engagement strategies. The act authorizes appropriations for the Treasury and Commerce Departments to administer the provisions and conduct outreach.
This legislation seeks to prevent U.S. capital from being exploited to undermine U.S. national security and foreign policy interests, while also attempting to minimize compliance costs for affected parties.
Expected Effects
This act will likely lead to increased scrutiny and potential restrictions on U.S. investments in China and other countries of concern, particularly in sectors involving advanced technologies. U.S. companies may face higher compliance costs due to new reporting requirements and potential prohibitions on certain transactions.
The act could also prompt closer coordination with allied nations to develop similar investment screening mechanisms. It may also lead to a public database of covered foreign persons, affecting their access to U.S. investments.
Potential Benefits
- Enhanced national security by restricting investments that could benefit adversaries.
- Increased transparency regarding U.S. outbound investments in sensitive technologies.
- Potential for greater international cooperation in addressing national security threats related to technology development.
- Encourages domestic production and supply of critical technologies.
- Provides a mechanism for self-disclosure and mitigation of violations, potentially reducing penalties for companies that proactively address issues.
Most Benefited Areas:
Potential Disadvantages
- Increased compliance costs for U.S. companies investing in affected countries.
- Potential for retaliatory measures from countries targeted by the sanctions and investment restrictions.
- Possible negative impact on economic growth due to reduced investment opportunities.
- Risk of overly broad definitions of "prohibited technology" or "covered foreign person," leading to unintended consequences.
- The act's termination clause (seven years after enactment) may create uncertainty for long-term investment strategies.
Most Disadvantaged Areas:
Constitutional Alignment
The act's focus on national security and foreign policy falls under the powers granted to the President and Congress in Article I, Section 8, which includes the power to regulate commerce with foreign nations and provide for the common defense. The imposition of sanctions is also rooted in the President's authority to conduct foreign affairs.
The Act also includes provisions for Congressional oversight through required reporting, aligning with the principle of checks and balances. The Act does not appear to infringe on any specific individual liberties or rights enumerated in the Bill of Rights.
However, the broad delegation of authority to the Secretary of the Treasury and other executive branch officials could raise concerns about the separation of powers, depending on how the regulations are implemented.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).