U.S. Department of the Treasury 

Office of Public Affairs

Press Release: August 9, 2023

Contact: Treasury Public Affairs, Press@Treasury.gov

FACT SHEET: President Biden Issues Executive Order 

Addressing United States Investments in Certain National 

Security Technologies and Products in Countries of 

Concern; Treasury Department Issues Advance Notice of 

Proposed Rulemaking to Enhance Transparency and Clarity 

and Solicit Comments on Scope of New Program

On August 9, 2023, President Biden issued an Executive Order (E.O.) to address the national 

security threat to the United States posed by countries of concern that seek to develop and exploit 

sensitive or advanced technologies and products critical for military, intelligence, surveillance, or 

cyber-enabled capabilities. 

The Biden-Harris Administration is committed to keeping America safe and defending

America’s national security by protecting technologies that are critical to the next generation of 

military innovation. Cross-border investment flows have long contributed to U.S. economic 

vitality. The E.O. is a narrowly targeted action to protect national security while maintaining our 

longstanding commitment to open investment. 

The E.O. provides for the establishment of a new and targeted national security program to be 

implemented and administered by the U.S. Department of the Treasury (Treasury), in 
consultation with other agencies, including the U.S. Department of Commerce. The program 

would, pursuant to implementing regulations: (1) require U.S. persons to notify Treasury of

certain transactions, and (2) prohibit U.S. persons from undertaking certain other transactions, in 

either case involving certain entities engaged in activities related to narrow sub-sets of three 

advanced technology areas identified in the E.O. 

In an Annex to the E.O., the President identified the People’s Republic of China (PRC)1as a 

country of concern. As part of a comprehensive, long-term strategy to advance the development 

of sensitive technologies and products, the PRC is exploiting, or has the ability to exploit, U.S. 

investments to further its ability to produce a narrow set of sensitive technologies critical to 

military modernization. Such U.S. investments are often accompanied by certain intangible 

benefits that help companies succeed, such as managerial assistance, investment and talent 

networks, and market access.

The United States already prohibits or restricts the export to the PRC of many of the technologies

and products under consideration for the new program. This new program would prevent U.S. 

investments from helping accelerate the indigenization of these technologies in the PRC, which 

undermines the effectiveness of our existing export controls and inbound investment screening 

programs which also seek to protect U.S. national security.

Also on August 9, 2023, alongside the E.O., Treasury issued an Advance Notice of Proposed 

Rulemaking (ANPRM) to provide transparency and clarity about the intended scope of the 

program and solicit input from the public on the implementation of the E.O. and the scope of the 

program before it goes into effect.

In developing the E.O. and ANPRM, the Biden-Harris Administration engaged with U.S. allies 

and partners regarding its important national security goals, and will continue coordinating 

closely with them to advance these goals. The E.O. and ANPRM reflect discussions with the G7 

and other ally and partner engagements. The Biden-Harris Administration also engaged with 

industry stakeholders regarding the initiative and its goals, and we look forward to continuing to 

receive and consider public input through the rulemaking process.

Executive Order

President Biden issued the E.O. under the authority vested in the President, including to regulate 

international commerce under the International Emergency Economic Powers Act. In the E.O., 

the President directs the Secretary of the Treasury (the Secretary) to issue regulations that:

• Prohibit U.S. persons from undertaking particular transactions involving certain entities 

located in or subject to the jurisdiction of a country of concern, and certain other entities 

owned by persons of a country of concern, engaged in activities related to defined subsets of technologies and products; and

1 The Annex to the E.O. identifies the PRC, along with the Special Administrative Region of 

Hong Kong and the Special Administrative Region of Macau, as a country of concern.
• Require notification by U.S. persons to Treasury regarding particular transactions 

involving certain entities located in or subject to the jurisdiction of a country of concern, 

and certain other entities owned by persons of a country of concern, engaged in activities 

related to other defined technologies and products. 

The E.O. identifies three categories of national security technologies and products for the new 

program. These were selected due to their critical role in accelerating the development of 

advanced military, intelligence, surveillance, and cyber-enabled capabilities: 

• Semiconductors and microelectronics;

• Quantum information technologies; and 

• Certain artificial intelligence systems. 

The E.O. instructs the Secretary to further define sensitive technologies and products in these 

categories for purposes of the prohibition and the notification requirement, and to consult, as 

appropriate, with other relevant executive departments and agencies in this process. 

The E.O. also provides the Secretary with the authority to investigate, as appropriate, violations 

of the E.O. and accompanying regulations, and pursue available penalties for such violations. 

Advance Notice of Proposed Rulemaking 

Concurrent with the issuance of the E.O. and in furtherance of the authorities delegated to it in 

the E.O., Treasury is issuing the ANPRM to provide transparency and clarity about the intended 

scope of the program, and as a vehicle for obtaining early stakeholder participation in the 

rulemaking process. The ANPRM does not itself implement the E.O. and is not draft regulatory 

text. Rather, it is a means for Treasury to share with the public some of its initial considerations 

and views with respect to definitions and other elements of the program that are central to its 

implementation. The ANPRM will be followed by draft regulations at a later stage in the 

process.

The ANPRM reflects the framework that Treasury anticipates proposing for implementation of 

the program, namely:

• Requirements on U.S. persons: The program anticipates that U.S. persons, wherever 

they are located, will be responsible for adhering to the prohibition and the notification 

requirement. A U.S. person includes any U.S. citizen, lawful permanent resident, entity

organized under the laws of the United States or any jurisdiction within the United States, 

including any foreign branches of any such entity, and any person in the United States.

Under the E.O., the Secretary may also place certain obligations on U.S. persons with 

respect to foreign entities that they control and in certain situations where U.S. persons 

knowingly direct transactions by non-U.S. persons.
• Specific categories of covered transactions: The program is anticipated to focus on U.S. 

persons undertaking certain types of transactions that could convey intangible benefits, 

specifically: acquisition of equity interests (e.g., via mergers and acquisitions, private 

equity, venture capital, and other arrangements); greenfield investments; joint ventures;

and certain debt financing transactions that are convertible to equity. 

• Involving covered foreign persons: The restrictions are anticipated to apply to 

investments in entities that are engaged in activities related to defined sub-sets of 

technologies and products, and that are organized under the laws of a country of concern, 

have a principal place of business in a country of concern, or are majority-owned by

country of concern individuals or entities. Presently the E.O. lists the PRC as a country 

of concern. 

• Deliberate approach to excepted transactions: Treasury is considering creating an 

exception for certain types of passive and other investments that may pose a lower 

likelihood of conveying intangible benefits or in an effort to minimize unintended 

consequences. For example, Treasury is considering excepting from the program’s 

coverage certain U.S. investments into publicly-traded securities, index funds, mutual 

funds, exchange-traded funds, certain investments made as a limited partner, committed 

but uncalled capital investments, and intracompany transfers of funds from a U.S. parent 

company to its subsidiary. The scope and nature of each of these potential exceptions is 

under consideration as detailed in the ANPRM.

The ANPRM provides initial details on the sub-sets of technologies and products within the three 

categories identified in the E.O.:

• Semiconductors and microelectronics: Treasury is considering prohibiting U.S. 

investments in PRC entities engaged in the development of electronic design automation 

software or semiconductor manufacturing equipment; the design, fabrication, or 

packaging of advanced integrated circuits; and the installation or sale of supercomputers. 

Treasury is also considering requiring notification for U.S. investments in PRC entities 

engaged in the design, fabrication, and packaging of less advanced integrated circuits. 

• Quantum information technologies: Treasury is considering prohibiting U.S. 

investments in PRC entities engaged in the production of quantum computers and certain 

components; the development of certain quantum sensors; and the development of

quantum networking and quantum communication systems. Treasury is not currently 

considering a separate notification requirement for quantum information technologies.

• Certain artificial intelligence systems: Treasury is considering requiring notification for 

U.S. investments in PRC entities engaged in activities related to software that 

incorporates an artificial intelligence (AI) system and is designed for certain end-uses that 

may have military or intelligence applications and pose a national security risk. Treasury 

is also requesting comments on how to shape a prohibition on U.S. investments in PRC 

entities engaged in a narrow set of activities related to software that incorporates an AI 

system and is designed for particular end uses with national security implications, e.g., 
military surveillance end uses. Treasury particularly welcomes feedback on the

definitions in this category and their potential implications on scope, and seeks to ensure 

these measures are appropriately tailored in the final regulations.

The ANPRM also seeks public comment on a range of related definitions and elements of the 

program. The public will have 45 days after the ANPRM’s publication in the Federal Register in 

which to provide comments that will inform Treasury’s development of draft regulatory text.

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