A Chinese fund invested about $92,478. Treasury fined its US parent $200,000 for not reporting it

Treasury announced on 7 October 2026 that it had penalised Amidi, LLC $200,000 for failing to file a required notification about an investment in a Chinese artificial-intelligence company. Treasury says this is its first civil penalty under the Outbound Investment Security Program and that it issued the penalty in July 2026, more than two months before announcing it.

Our arithmetic: the penalty is about 2.2 times the sum invested. The rule's civil ceiling is the greater of $250,000, as adjusted for inflation, or twice the transaction value (31 CFR 850.701). Twice $92,478 is $184,956, so the $250,000 figure is the one that applies, and $200,000 sits below it. The inflation-adjusted figure is published each year by 15 January on Treasury's programme website (850.701(c)); it cannot change which limb applies.

The structure in the release is three lines long. Amidi is the US person. Below it sits what Treasury calls a Chinese fund. The fund made the investment. Amidi filed nothing, and Amidi was penalised.

That is the point of 31 CFR 850.402: a US person must notify Treasury of any transaction by its controlled foreign entity that would be a notifiable transaction if a US person had made it. Section 850.302 does the same for prohibited transactions, requiring the US person to take all reasonable steps to prevent them. So the fund's own paperwork, in China, was never the question. The obligation sat one level up.

Treasury also names Plug and Play Tech Center in the release, as an organisation Amidi is the parent of. The release does not accuse that organisation of anything, and it does not say what the penalised conduct had to do with it.

Section 850.206 defines a controlled foreign entity as an entity organised outside the United States of which a US person is a parent. The meaning of "parent" in 850.219 has three limbs:

Four details matter for anyone drawing an ownership chart. The line at "more than 50 percent" differs from the 50 percent or more that OFAC uses to block an unlisted company, so a structure can pass one test and fail the other. The role limbs carry no percentage, which is how a sponsor can be the parent of a fund it owns little of.

The note to 850.219 says an intermediate entity counts as a parent, not only the ultimate one. And under 850.206(b), a subsidiary's holdings are attributed in full to its parent through each tier. Where a link is 50 percent or less, 850.206(b)(2) attributes the holdings below it only proportionately. But 850.206(b)(3) aggregates direct and indirect holdings of the same kind in the same entity, so add them up before ruling a US holder out.

Treasury does not say which limb made Amidi the parent of the fund.

The deadline in 850.404(c) is 30 calendar days after the completion date, and the completion date is the earliest day an interest passes to the US person or its controlled foreign entity. Treasury gives the investment date, 19 April 2025, and not the completion date, so we do not compute Amidi's deadline.

The content is set out in 850.405 and is heavy on structure. It asks for a post-transaction organisational chart of the US person, with the intermediate and ultimate parents and its relationship to each controlled foreign entity, and a matching chart of the target. It also requires the target's ultimate owner and its officers and directors, the total transaction value and how it was determined, and the covered activity that makes the target notifiable. The filer must keep the notification and its supporting documents for ten years.

The release does not say what made this investment notifiable. The notifiable categories for AI systems in 850.217(d) include systems intended for the control of robotic systems, and Treasury describes Noematrix as developing robotics and embodied intelligence. The release does not connect the two, and we do not fill the gap.

The release does not give the completion date, the limb that made Amidi a parent, the notification category, the penalty's calculation, or whether Amidi has since filed. It does not name Amidi's fund. It says Treasury found the transaction through "regular and ongoing compliance and market monitoring", and that it weighs aggravating and mitigating factors set out in its enforcement guidance.

It also looks ahead. Treasury notes that Congress passed the Comprehensive Outbound Investment National Security Act of 2025 on 18 December 2025, which it says will expand the programme to more countries and technology sectors. We have not read that Act.

An EU or Polish company with no American link is outside this rule. Section 850.229 defines a US person to include any entity organised under US law and anyone in the United States. If your group has a Delaware or Texas subsidiary, that subsidiary is a US person, and every non-US entity of which it is the parent under 850.219 is its controlled foreign entity. The same applies to a counterparty: a European fund whose general partner or investment adviser is a US entity has a US parent under 850.219(b) or (c), whatever the percentages say.

Nothing about this makes the Chinese investee a sanctions target. This release blocks nothing and adds nobody to any list. It changes how you read an ownership chart. The old question is whether a listed person sits at the top. The added one is whether a US person sits anywhere above the entity in front of you.

1. Get the structure chart. A US filer has to produce one under 850.405, so a US parent that has filed already has one. Ask for it.
2. Follow the register upwards past the first level. Take the shareholder extract in each country. At each level record who holds more than 50 percent of the votes or of the board, and keep going. Section 850.219 counts an intermediate parent, so a US entity in the middle of the chain is enough.
3. At each level, ask where the entity is organised. Organisation under the law of any US state or other US jurisdiction makes it a US person (850.228, 850.229).
4. Check the role limbs separately for funds and partnerships. Find the general partner, managing member and investment adviser. They need no percentage.
5. Record what you found and what you could not. "No US parent found in the registers checked on this date" is a result. "Clear" is not.
6. Re-run the chain when ownership changes, not only when a list does.

A name search in ScreenVeritAI answers the list question. It cannot answer this one, because Treasury published no list. The rule applies by what the target does and whether a US person sits above the investor, and Noematrix appears here only because a press release named it. The ownership steps above are the work our company due-diligence page describes.

This is a report of Treasury's press release of 7 October 2026 and of the text of 31 CFR Part 850 on the Electronic Code of Federal Regulations. We read that text on 9 October; Part 850 has not been amended since 2 January 2025. The post takes no view on whether Amidi, the fund or the investee did anything beyond what Treasury states, and it makes no claim about what Plug and Play Tech Center knew or did.

We did not read the Outbound Investment Security Program Enforcement Overview and Guidance that Treasury cites, any penalty notice or settlement document, the inflation-adjustment notice, or the 2025 Act. The release does not give the penalty's basis. The rule binds US persons. Whether any EU or Polish entity is one, or has a US parent, is a question of its own facts.