A worker is manufacturing semiconductor products for export to Europe and the United States at the production line of a semiconductor manufacturer in Binzhou, Shandong province, Eastern China, April 1, 2024. .
Photo | Future Publishing | beautiful images
The United States on Friday issued draft regulations banning or requiring notification of certain investments in artificial intelligence and other technology sectors in China that could threaten US national security. Ky.
the U.S. Treasury Department publication of proposed regulations and a series of exceptions after the initial comment period under an executive order signed by President Joe Biden last August. The regulations place the responsibility on U.S. individuals and companies to determine which transactions will be restricted or prohibited.
Biden’s executive order, which provides guidance on the regulation of certain U.S. investments in semiconductors and microelectronics, quantum computing and artificial intelligence, is part of a broader effort to prevent American know-how helps the Chinese develop sophisticated technology and dominate global markets.
The US is on track to implement the regulations later this year as expected. Public comments on the proposed rules will be accepted until August 4.
“This proposed rule advances our national security by blocking many of the benefits that some U.S. investments provide,” said Assistant Secretary of the Treasury for Investment Security Paul. – in addition to capital – from supporting the development of sensitive technologies in countries that could use them to threaten our national security.” Rosen.
The Treasury Department said the new regulations are intended to implement “a narrow and targeted national security program” focused on certain offshore investments in the countries involved.
Treasury outlined the outlines of the proposed rules in August. The Treasury on Friday introduced additional exceptions, such as for transactions deemed to be in the public interest. country of the United States.
The proposed rules would ban transactions in AI for certain end uses and involve systems trained to use a specific amount of computing power, but would also require Notification requirements for transactions related to the development of AI systems or semiconductors are not prohibited.
Focus on China, Macao and Hong Kong
Other exceptions would apply to publicly traded securities, such as index funds or mutual funds; certain limited partnership investments; acquisition of ownership by the country concerned; transactions between a U.S. parent company and a majority-controlled subsidiary; binding commitments that predate the order date; and certain syndicated debt financings.
The Treasury Department said certain third-country transactions that are determined to address national security concerns or in which the third country adequately addresses national security concerns are also available. may be exempted.
The order initially focuses on China, Macao and Hong Kong, but US officials said it could be expanded later.
Former Treasury official Laura Black, an attorney at Akin Gump in Washington, said the Treasury is trying to define the scope of the regulation as narrowly as possible, but this will require companies that want to invest entering China must increase vigilance.
“U.S. investors will need to conduct more extensive due diligence when investing in China or investing in Chinese companies operating in regulated sectors,” she said.
Black said the Treasury Department’s proposed rules are making it difficult for U.S.-regulated venture capital and private equity funds, as well as investments by certain U.S. limited partners, to Foreign-managed funds and convertible debt.
Some Chinese subsidiaries and parent companies will be subject to the rule, which will also ban some investments by American companies in third countries, she added.
Besides equity investments, joint ventures and new projects, default debt can also be recovered when it becomes equity.
These regulations track restrictions on the export of certain technologies to China, such as restrictions on the shipment of certain advanced semiconductors.
The goal is to block American funds from helping China develop its own capabilities in those areas to modernize its military.
Violators of the rules may be subject to both criminal and civil penalties, and investments may be cancelled.
The Treasury Department said it had worked with U.S. allies and partners on the goals of the investment restrictions, noting that the European Commission and the United Kingdom had begun considering whether Address the risks of investing abroad or not and how to resolve the risks of investing abroad.
