S. 3555 — Comprehensive Outbound Investment National Security Act of 2025

This section includes a severability clause, providing that if any provision of this Act or its amendments, or its application, is held invalid, the remainder of the Act and its amendments remain valid and unaffected.

This section authorizes appropriations of $150 million for each of the first two fiscal years beginning on or after enactment for the Department of the Treasury—with amounts available for transfer to the Department of Commerce—to conduct outreach to affected industry and persons and to administer the Act. It further provides special hiring authorities, permitting (1) the President to appoint up to 15 individuals directly to competitive service positions without regard to civil service examination requirements under 5 U.S.C. §§3309–3318 and (2) the Secretaries of the Treasury and Commerce to make such appointments within their respective departments.

This section expresses the sense of Congress that restricting certain U.S. outbound investments in dual-use strategic technologies in countries of concern—including the People's Republic of China—is necessary to safeguard U.S. national security and foreign policy interests from foreign adversaries' military modernization, surveillance states, and human rights abuses and that the President should exercise authorities provided in this Act to prevent such countries from exploiting U.S. capital.

This section authorizes the President to impose sanctions on any foreign person determined to be a covered foreign person by exercising powers under the International Emergency Economic Powers Act (IEEPA; 50 U.S.C. 1701 et seq.) to prohibit any U.S. person from investing in or purchasing significant amounts of equity or debt instruments of such person. (IEEPA grants the President broad authorities during declared national emergencies to regulate international economic transactions, block property, and investigate compliance.) It applies penalties under IEEPA section 206(b) and (c) (civil and criminal) to violations; provides exceptions for U.S. intelligence and law enforcement activities (including under title V of the National Security Act of 1947) and official U.S. government business; requires the President to submit to appropriate congressional committees, not later than one year after enactment and annually thereafter for seven years, an unclassified report (with possible classified annex) stating whether any foreign person on the Non-SDN Chinese Military-Industrial Complex Companies List is a covered foreign person; authorizes use of specified IEEPA administrative provisions; and specifies that the section does not limit other presidential sanction authorities.

This section defines terms for purposes of this title, including: (1) appropriate congressional committees (i.e., specified House and Senate committees on financial services, banking, and foreign affairs); (2) country of concern (i.e., the People's Republic of China, including the Hong Kong and Macau Special Administrative Regions); (3) covered foreign person (i.e., a foreign person incorporated in, controlled by, or 50% or more owned by a country of concern that knowingly engages in significant operations in that country's defense and related materiel sector or surveillance technology sector); (4) foreign person (i.e., any person that is not a United States person); (5) knowingly (i.e., with actual knowledge or knowledge that a person should have had); (6) Non-SDN Chinese Military-Industrial Complex Companies List (i.e., the Treasury Department's Office of Foreign Assets Control list under Executive Order 13959, as amended); (7) person (i.e., an individual or entity); and (8) United States person (i.e., U.S. citizens, permanent residents, U.S.-organized entities, or persons in the United States).

This section establishes an exception to the sanctions authorized under this Act by prohibiting their imposition on the importation of goods, which it defines as any article, natural or manmade substance, material, supply, or manufactured product (including inspection and test equipment but excluding technical data).

This section amends the Defense Production Act of 1950 by adding a new Title VIII to authorize the Secretary of the Treasury to prohibit U.S. persons, including their controlled foreign entities, from knowingly engaging in covered national security transactions involving prohibited technologies (§801(a)); to deem evasion of such prohibitions as prohibited (§801(b)); and to exempt certain activities determined to be in the U.S. national interest or authorized intelligence activities (§801(c)), with notifications to congressional committees within five business days (§801(d)). Title VIII further directs the Secretary, in consultation with specified agency heads, to issue regulations within 450 days of enactment to implement these prohibitions and related processes (§801(e), §802), including non-binding feedback on transaction status, self-disclosure opportunities with mitigation proposals, low-burden compliance minimizing duplication with the existing Outbound Investment Rule (31 C.F.R. part 850), and placing the burden of proof on the Secretary in enforcement actions (§801(e)). It also requires U.S. persons to notify the Secretary within 30 days of completing covered national security transactions in notifiable technologies (or prohibited technologies not subject to prohibition) (§802(a)). (Thus, the regulations may amend, terminate, supersede, revoke, or streamline the Outbound Investment Rule while providing reasonable compliance timeframes.)

This section directs the President to submit to the appropriate congressional committees (i.e., House Financial Services and Foreign Affairs Committees; Senate Banking Committee), not later than two years after enactment and biennially thereafter for six years, a report determining whether PRC persons (i.e., persons incorporated or organized under the laws of the People's Republic of China (PRC), including Hong Kong and Macau; certain Chinese Communist Party members; PRC government entities; or entities 50% or more owned by such persons) listed on specified U.S. government restriction lists qualify for inclusion on the Non-SDN Chinese Military-Industrial Complex Companies List maintained by the Treasury Department's Office of Foreign Assets Control (OFAC). (The Non-SDN CMIC List identifies PRC companies owned or controlled by the Chinese military and prohibits U.S. persons from purchasing or selling their publicly traded securities.) The specified lists are (1) the Department of Commerce's Military End-User List, (2) the Department of Defense's list of PRC military companies under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note), (3) the Department of Commerce's Entity List, (4) the Federal Communications Commission's Covered List under the Secure and Trusted Communications Networks Act of 2019, and (5) the Uyghur Forced Labor Prevention Act Entity List. This section further requires (1) an interagency process for the administering agencies of the first three lists to share relevant information used to identify listed entities, (2) a risk-based prioritization framework for initial determinations that incorporates agency review priorities, (3) allowance in reports for summarizing previously reviewed entities not requiring further review, and (4) inclusion in each report of the criteria for OFAC's Non-SDN CMIC List and overviews of criteria for the other lists provided by their administering agencies.