In an effort to protect sensitive technology, President Biden signed an executive order on investing in national security technology.
The executive order authorizes the Secretary of the Treasury to regulate certain U.S. investments into countries of concern in entities engaged in activities involving sensitive technologies critical to national security in three sectors: semiconductors and microelectronics, quantum information technologies and artificial intelligence. The President identified the People’s Republic of China (PRC), including the Special Administrative Region of Hong Kong and the Special Administrative Region of Macau, as a country of concern.
The Department of the Treasury also released an Advanced Notice of Proposed Rulemaking (ANPRM), with proposed definitions to elaborate the scope of the program, which will be subject to public notice and comment before it goes into effect. The program will seek to prevent foreign countries of concern from exploiting U.S. investment in this narrow set of technologies that are critical to support their development of military, intelligence, surveillance and cyber-enabled capabilities that risk U.S. national security.
The program complements the United States’ existing export control and inbound screening tools with a “small yard, high fence” approach to address the national security threat posed by countries of concern advancing such sensitive technologies. Specifically, it will prohibit certain investments in entities that engage in specific activities related to these technology areas that pose the most acute national security risks, and require notification for other sensitive investments.