President Biden Signs Executive Order on U.S. Investment in China

Last week, President Joseph Biden issued the “Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern” which represents the first step by the Biden administration to curb certain categories of U.S. investment into China. The Executive Order directs the Treasury Secretary, Commerce Department, and other related agencies to impose notification requirements, and in some instances, would outright prohibit investment by certain entities in semiconductors, microelectronics, and artificial intelligence, among other areas. The Executive Order identifies three jurisdictional areas:

1. Transactions that involve covered national security technologies and products.
2. Applies to U.S. individuals including a non-US fund that is controlled by a U.S. person.
3. Requires the involvement of a covered foreign person engaged in activities involving the covered national security technologies and products.

The Executive Order requires Treasury to undergo the rulemaking process with a period of public notice and comment. And thus, concurrently with the Executive Order, the U.S. Department of the Treasury released an advance notice of proposed rulemaking which includes 80 specific questions and considerations in defining key aspects of the Order.

Click here to read the Executive Order.
Click here to read a fact sheet on the parameters of the Executive Order.
Click here to read a Ropes & Gray client alert covering the Biden Administration’s action.