On October 7, 2026, the US Department of the Treasury (Treasury) announced its first civil penalty under the Outbound Investment Security Program (OISP), fining a US company $200,000 for failing to notify Treasury of a $92,478 investment by its Chinese subsidiary in a Chinese artificial intelligence (AI) company. This penalty is the first publicly known enforcement action under the OISP. The penalty signals that OISP compliance should be prioritized by any US persons making investments in China’s advanced technology sector or pursuing joint ventures with Chinese companies associated with AI, quantum computing, or advanced microelectronics. Although the OISP is likely to be amended next year as Treasury implements the COINS Act, we anticipate only minor changes to the outbound investment rules and Treasury’s enforcement efforts are likely to expand over time.

The First OISP Enforcement

According to its press release, Treasury issued a civil penalty in July 2026 against Amidi, LLC (Amidi) for failing to submit a required notification of an investment in a Chinese company. Specifically, on April 19, 2025, Amidi’s subsidiary, a Chinese fund, made a “notifiable transaction” when it invested approximately $92,478 in Shanghai Qiongche Intelligent Technology Company Limited (Noematrix), a company that develops AI, robotics, and embodied intelligence. Amidi is the parent entity of Plug and Play Tech Center, a Silicon Valley-based venture capital firm and startup accelerator that invests in early-stage technology companies.

Treasury said it identified the transaction through its “regular and ongoing compliance and market monitoring efforts”—a growing effort by Treasury to dedicate resources across different regulatory regimes, including the Committee on Foreign Investment in the United States (CFIUS), to identify “non-notified” deals within Treasury’s jurisdiction. The release says little about the specific methodology used to calculate the penalty, stating only that, in deciding whether to bring an enforcement action, Treasury will evaluate the facts and circumstances, including aggravating and mitigating factors the Department previously identified in its Outbound Investment Security Program Enforcement Overview and Guidance.

Background on the OISP

The OISP, which took effect on January 2, 2025, prohibits, or requires notification to Treasury of, certain “covered transactions” by US persons, and by non-US entities they control, in “covered foreign persons.” These are generally entities in, or connected to, China (including Hong Kong and Macau) that are engaged in specified activities in the AI, semiconductor and microelectronics, and quantum computing sectors.

As Treasury’s release emphasizes, a US person must notify Treasury within 30 days of the closing of any transaction by its controlled foreign entity that would be notifiable if engaged in by a US person, and must take all reasonable steps to prevent a controlled foreign entity’s transaction that would be prohibited. In particular, the OISP requires US persons to notify Treasury whenever they engage in covered investments that are not otherwise prohibited and where the covered foreign person develops an AI system that is intended to be used for the control of robotics systems, or which was trained using a quantity of computing power greater than 1023 computational operations.

The COINS Act and Treasury’s Forthcoming Rulemaking

The press release notes that the Comprehensive Outbound Investment National Security Act of 2025 (the COINS Act), which became law on December 18, 2025, “will expand OISP jurisdiction to include investments in additional countries and technology sectors.” The COINS Act directs Treasury to issue implementing regulations within 450 days of enactment (i.e., by March 13, 2027); the current iteration of the OISP continues to govern in the interim. Likely changes to the OISP as a result of the COINS Act include:

• Expand the covered sectors. The COINS Act adds high-performance computing and supercomputing, and hypersonic systems, to the AI, semiconductor, and quantum computing sectors already covered. (Several members of Congress are pushing to include the biotechnology sector as a covered industry under the OISP as well.)
• Add countries of concern. The COINS Act adds countries such as Cuba, Iran, North Korea, Russia, and Venezuela under the Maduro regime.
• Broaden the “knowingly directing” provision. Currently, a US person, including an individual such as a corporate officer, who “knowingly directs” a non-US entity’s transaction that would be prohibited if undertaken by a US person violates the OISP. The Act extends this provision such that a US person who “knowingly directs” a notifiable transaction will also be subject to the OISP’s requirements.
• Create new exceptions. The COINS Act exempts certain “secondary transactions” from the OISP’s scope. Notably for some financial institutions, it would not prohibit or require notification of “underwriting services,” including an underwriter’s temporary acquisition of privately held equity shares solely to facilitate those services. Under the current regime, such an equity acquisition, even a brief one, is a covered transaction—which has created compliance challenges financial institutions supporting IPOs on international markets. However, this exception is not self-executing, so the current approach remains in force until Treasury issues implementing regulations.

Conclusion

This first-ever enforcement action demonstrates the maturation of the OISP. While the OISP was developed by the Biden Administration, this action confirms that the Trump Administration is committed to maintaining and enforcing the outbound investment restrictions, which Treasury Secretary Scott Bessent’s statement in the press release indicates help “preserve America’s technological leadership and advance President Trump’s America First Investment Policy.”

US investors will be expected, more than ever, to understand and abide by the requirements of the OISP. Such expectations will come not only from Treasury, which has now put investors on notice, but also from fellow investors, lenders, and others managing their own OISP compliance. Meanwhile, COINS Act implementation and congressional interest in further restricting outbound investment will increasingly make the OISP an area that US companies must understand and account for in their investment decision-making.