On November 10, 2025, the United States Department of Commerce, Bureau of Industry and Security (BIS) announced a one-year suspension of the “Affiliates Rule,” which imposed U.S. export control restrictions on entities 50 percent or more owned by parties on the Entity List, Military End-User (MEU) List, and the Specially Designated Nationals (SDN) List under certain sanctions programs. The suspension of the Affiliates Rule was part of a broader trade agreement between the United States and China.
Background
On September 30, 2025, BIS published a rule that expanded BIS Entity List and BIS MEU List restrictions to entities 50% or more owned, directly or indirectly, individually or in the aggregate, by one or more restricted parties. The Office of Foreign Assets Control (OFAC) maintains a “50 Percent Rule” with respect entities 50% or more owned by parties on the SDN List, while the BIS list-based restrictions historically have not flowed down as a result of ownership. The Affiliates Rule also introduced new diligence requirements for companies dealing with affiliates of Entity List and other restricted parties.
The Affiliates Rule was effective immediately, with a limited scope temporary general license, introducing compliance challenges for businesses that did not have ready access to Entity List and other restricted party ownership information.
The Suspension
BIS has suspended the rule for one year, until November 10, 2026. During this time, BIS list-based restrictions will apply only to listed entities and addresses. Despite the suspension of the Affiliates Rule, dealings with affiliates of Entity List and other BIS restricted parties present compliance red flags, and should be closely reviewed to ensure compliance with the EAR.
Given the dynamic geopolitical and U.S. policy landscape, exporters should continue to monitor developments in the space for potential regulatory changes.
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