European drug companies can still license Chinese biotech intellectual property with almost no oversight. The United States, on the other hand, is racing to treat these deals as national security risks. This split is no accident. It comes from two very different approaches to regulation that have now taken hold on each side of the Atlantic.
According to Reuters, the US Treasury has proposed using the COINS Act as a foundation to tighten controls on pharmaceutical deals, even though the sector is not explicitly named in the law.
Washington is building new rules just for licensing. The Comprehensive Outbound Investment National Security (COINS) Act, passed as part of the 2026 National Defense Authorization Act, set up the first outbound investment screening system under the Treasury Department. Right now, it covers semiconductors, artificial intelligence, quantum computing, high-performance computing, and hypersonics. Biotechnology is not on the list. The Biotech Investment National Security Act (BINSA), introduced as H.R. 9102 in June 2026, aims to change that. It would amend the Defense Production Act to add biotechnology to both notifiable and banned technology lists. The bill covers research, development, manufacturing, commercialization, and all related IP and know-how for therapeutic compounds. Crucially, it would make licensing itself a covered deal—not just equity or acquisitions. But H.R. 9102 is still at the referral stage. There have been no hearings or budget estimates. That means a long road ahead in Congress. Meanwhile, Treasury could add biotechnology to the COINS Act’s scope through rulemaking, which could move faster than lawmakers. The Biosecure Act, already law since December 2025, blocks federal agencies from working with any company that uses equipment or services from a listed “biotechnology company of concern.” This pushes restrictions deep into the supply chain for federally funded work.
Reuters reported on September 18, 2026, that the US is preparing rules that would mostly let American drug companies keep doing licensing deals with Chinese biotech firms. But deals involving pathogens or biotech with military uses would face new limits. This approach targets only the most sensitive areas, not all licensing. Lawmakers pushing for tighter rules have argued, according to Reuters, that the main worry is not classic national security, but stopping China from dominating biotech innovation. The debate shows how the US is focused on expanding outbound investment screening to cover licensing, with the Treasury Department looking at possible rule changes.
By September 2026, the Biotech Investment National Security Act (BINSA) remained at an early stage in the US Congress and had not yet become law, maintaining a legal gap between the US and Europe in biotech outbound controls.
National laws in Germany, France, Italy, Spain, and soon the Netherlands do treat life sciences and biotech as sensitive, but only for inbound investment. Germany makes non-EU investors notify before buying stakes in medical device or drug companies. France and Spain list biotech as critical technology. Italy’s Golden Power rules are unique—they cover licensing or transfer of key IP in healthcare and pharma. But all these laws are built to protect local companies from foreign buyers. None are meant to police a domestic company’s choice to license a Chinese asset. There is no European version of the US’s new outbound controls on biotech IP acquisition.
This leaves a blind spot. A European drug company licensing a Chinese ADC or bispecific platform, with no US person or federal funding involved, faces no ownership-based review under US or EU law. The US outbound investment act and its proposed biotech amendment only reach European parties if there’s a US link—like a controlled foreign entity, a US person directing the deal, or a US limited partner in a fund. The Biosecure Act only applies if federal contracts or grants are involved. The EU and national rules only cover inbound deals. So a large part of cross-border biotech licensing sits outside both US and European screening systems.
For European life sciences companies with US operations, investors, or plans, the impact is immediate. Deal teams have to check every possible US link in a China-origin licensing deal before signing. Even a single federal contract or research partnership could bring the deal under US outbound investment rules. Legal teams should watch both H.R. 9102 and Treasury rulemaking, since administrative action could add biotech to the covered sectors faster than Congress. Checking China-origin assets now means screening by country—Germany, France, Italy, Spain, and, from 2027, the Netherlands—even though none of these currently cover the licensing deal itself. Under Article 19 of the EU regulation, risk factors mean a deal could be reviewed for up to five years after closing if it falls under a Member State’s wider national rules for another reason.
The US is clearly treating China-origin biotech licensing as a national security issue, building laws that target the licensing deal itself. The EU, at the same time, has narrowed its own screening, leaving life sciences out of mandatory review and relying on national laws that were never meant to regulate outbound deals. European companies expecting Brussels or their home governments to copy Washington’s approach may be reading the situation wrong. The lack of European ownership controls is not set in stone. It’s still a live legislative issue. Companies that treat it as settled may be caught off guard if the rules change again.
