In response to the ANPRM TREAS-DO-2023-0009-0001 pertaining to the August 9, 2023 Executive Order Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern, this response provides comments on the following areas:
- The concept of intangible benefits and the potential advantages of creating clear indicators for when intangible benefits are conveyed by an investment transaction;
- Extraterritorial application, specifically the broad assertion of jurisdiction over U.S. persons that “knowingly direct” certain transactions;
- Covered transaction definitions, including Need to clarify the policy intent for coverage of Chinese conglomerates;
- Further precision on the “is engaged in” standard that links a Chinese company to a national security technology or product;
- Questions around the provision of safe harbor, including as it pertains to multi-stage investments, growth transactions, and potential pivots of the business of a covered foreign person;
- Recommendation to complement the EO/ANRPM with the additional policy tool of an expanded non-SDN CMIC program to address specific, entity-based national security concerns;
- Recommendations on strengthening the scoping of the AI definitions and creating a “defense-in-depth” approach on AI through a package of policy tools, including by:
- Amending the “exclusively used” standard in the end use provisions to align with export control concepts;
- Adding an additional set of covered transactions involving frontier AI models, defined based on a set of technical parameters; and
- Including entity-based restrictions for particular bad actors in the AI space.
To see the full ANPRM and all responses, please go to Regulations.gov.