Treasury Drops Venezuela from Investment Blacklist as COINS Act Rules Take Shape

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When the U.S. Treasury Department released a Notice of Proposed Rulemaking on October 22 to bring the Comprehensive Outbound Investment National Security (COINS) Act into operational effect, one of the most telling details was not what the proposed rule would restrict — but what it deliberately left out. Venezuela, named explicitly in the law as a country of concern, appeared nowhere on the list of nations where American investors would face new controls.

The Treasury Department's proposed regulations represent the most formal step yet toward turning a statute into an operational investment screening system. The COINS Act was signed into law on December 18, 2025, as part of the fiscal year 2026 National Defense Authorization Act — codifying and expanding a regime that had previously been built on executive authority alone. Treasury is accepting public comments through December 7, 2026, before developing a final rule at a later date.

What the COINS Act Changed — and What Treasury Added on Its Own

Before the COINS Act, Washington's outbound investment program covered only China. The new legislation substantially expanded both the country list and the technology list. Cuba, Iran, North Korea, and Russia joined China as designated countries of concern, and Venezuela was added as well, provided the Maduro regime remained in power. On the technology side, the statute folded in two new sectors — high-performance computing and supercomputing, and hypersonic systems — alongside the three already covered: semiconductor technology and microelectronics, quantum information technologies, and what was then classified as artificial intelligence. Going further, Treasury used authority the COINS Act grants the Secretary to expand the program's reach and added biotechnology as a sixth covered sector in the proposed rule, citing its potential misuse in brain-computer interface development, biological design and sequencing, and related fields where adversary exploitation poses national security risks.

The Legal Logic Behind Venezuela's Exclusion

The statutory language that brought Venezuela into the COINS Act's scope was precise: it targeted Venezuela "under the regime of Nicolás Maduro Moros." That regime, Treasury concluded, no longer meets the definition. U.S. military forces captured Maduro and his wife, Cilia Flores, during a January 3, 2026 operation in Caracas, removing him from power and transferring him to New York to face narco-terrorism and drug trafficking charges. His executive vice president, Delcy Rodríguez, assumed the role of acting president in the immediate aftermath.

The diplomatic shift that followed was swift. On March 5, 2026, the United States issued a statement normalizing relations with Venezuela under the Rodríguez government and formally recognizing her as the country's head of state, as confirmed by the Treasury fact sheet. "Venezuela does not meet the NPRM's definition of a country of concern," Treasury stated. The department added a note of caution: U.S. investors should still evaluate whether the proposed rule might reach specific Venezuelan entities in particular circumstances, keeping a narrow avenue for restrictions open. The full break with the Maduro-era sanctions posture came on April 1, 2026, when the Office of Foreign Assets Control removed Rodríguez from its Specially Designated Nationals list.

Six Sectors, Five Countries

The proposed rule places obligations on U.S. persons — citizens, permanent residents, and entities organized under U.S. law — who seek to make covered investments in companies tied to any of five designated countries: China (including Hong Kong and Macau), Cuba, Iran, North Korea, and Russia. The six technology areas covered under the proposed rule are: semiconductor technology and microelectronics; super intelligence (SI) systems; quantum information technologies; high-performance computing and supercomputing; hypersonic systems; and biotechnology. The SI designation is explained below.

The Super Intelligence Ban — and Why AI Is Now Called SI in Federal Regulations

The most restrictive treatment in the proposed rule applies to a category that federal agencies no longer call artificial intelligence. An executive order signed September 29, 2026, directed all federal departments to substitute "Super Intelligence" and "SI" for "Artificial Intelligence" and "AI" in regulatory documents — which is why the NPRM refers throughout to "super intelligence (SI) systems" rather than AI. Under the proposed rule, any U.S. investment in a covered entity developing SI systems would be outright prohibited, with no notification option available. Treasury cited the rapid trajectory of advancement in this field over the past two years as the basis for concluding that a more permissive, notification-only approach would leave unacceptable gaps.

Exemptions and Safe Harbors

The proposed rule carves out a range of transactions from its coverage. Deals that total no more than $50,000 in the aggregate over the prior twelve months are exempt from the notification requirement — though that carve-out does not shield transactions that fall under the outright prohibition categories. Investments in securities traded on any public exchange, shares in index funds, mutual funds, or exchange-traded funds, and certain limited partnership stakes in non-U.S. pooled investment funds (where committed capital stays at or below $2 million) also fall outside the rule's scope. Intracompany transfers from a U.S. parent to its controlled foreign subsidiary carry their own exception, as do underwriting services and certain syndicated lending arrangements.

Companies Can Now Seek Pre-Deal Guidance

One operationally significant feature of the proposed rule is a formal mechanism for prospective clarity. Parties with a direct financial stake in a real, active transaction can request non-binding feedback from Treasury on whether that deal would be considered prohibited under the rule, according to Treasury officials. Responses can take the form of confidential written guidance or anonymized public advisories. The channel is designed to reduce the compliance burden for investors who need certainty before committing capital. A separate national interest exemption pathway would also allow companies to petition Treasury to approve an otherwise prohibited transaction where broader policy interests support it.

Assistant Secretary of the Treasury for Investment Security Christopher Pilkerton said the proposed regulations "are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors."

Washington's Broader Bet on Venezuela

The choice to leave Venezuela outside the proposed restriction list is part of a wider strategic realignment between Washington and Caracas that has accelerated since Maduro's removal. The Trump administration has released a series of OFAC general licenses that have progressively expanded U.S. access to Venezuela's oil and gas sector. Venezuela holds the world's largest proven oil reserves, and American energy companies have been actively encouraged to participate in the sector under the Rodríguez government — a sharp contrast with the containment posture of recent years.

The proposed rule opens a comment period rather than finalizing new policy. The COINS Act gives Treasury 450 days from its December 18, 2025 enactment to issue implementing regulations, placing the statutory deadline at approximately March 13, 2027. Public comments are due by December 7, 2026, leaving a meaningful window for investors, industry associations, and legal practitioners to shape what the final regulation will require before it carries the force of law.

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