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Global Trade & Sanctions LawPublished on:
Treasury Department Issues First Civil Penalty under the Outbound Investment Security Program
On October 7, 2026, the U.S. Department of Treasury announced its first civil enforcement penalty imposed under the Outbound Investment Security Program (OISP). For U.S. investment funds, U.S. managers of funds abroad, and U.S. companies with controlled subsidiaries abroad, this enforcement action is a practical reminder that OISP diligence and documentation should extend across controlled foreign entities, including for small and follow-on investments. This is especially relevant to funds investing in Chinese companies in the semiconductor, quantum and artificial intelligence (AI) sectors and U.S. companies with controlled foreign subsidiaries involved with these sectors.
