Senate to Propose Outbound Investment Measure During NDAA Talks With House

Legislation to increase the visibility of U.S. outbound investment will be considered during House-Senate negotiations on the FY 2025 National Defense Authorization Act, the Senate Armed Services Committee announced last week.

The measure is one of 93 amendments that Armed Services Committee leaders have included in a proposed 856-page manager’s package that lawmakers will discuss during the NDAA talks. The Senate is skipping floor consideration of its NDAA, which the Armed Services Committee marked up in June (see 2407300041).

The outbound investment amendment, offered by Sens. John Cornyn, R-Texas, and Bob Casey, D-Pa., would require U.S. companies to notify the Treasury Department before making certain investments in several “countries of concern,” including China. The industries included under their proposal are: advanced semiconductors and microelectronics, artificial intelligence, hypersomics, quantum information science and technology, satellite-based communications and lidar remote sensing technology with dual-use applications.

Similar outbound investment legislation was included in the Senate version of the FY 2024 NDAA but didn't make it into the final NDAA that Congress passed in December (see 2312070054).

In the House, lawmakers have spent much of this year debating restrictions on outbound investment to China. They have yet to reach a compromise between those favoring restrictions on individual entities and proponents of targeting whole technology sectors (see 2401180067).

The Treasury Department in July published a proposed rule that would introduce new prohibitions and notification requirements on outbound investment in China’s AI, quantum and semiconductor sectors (see 2405080039).