- within International Law topic(s)
- in United States
- within Compliance topic(s)
On November 1, 2025, the White House formally announced in a fact sheet that the United States will suspend the Bureau of Industry and Security's 50% rule, known as the BIS 50% Affiliates Rule, for one year starting Nov. 10, 2025. The suspension was negotiated during trade talks between U.S. and Chinese officials this past week.
Background & Overview of the Affiliates Rule
On September 29, 2025, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") published a long-awaited interim final rule (the "Affiliates rule") amending Part 744 of the Export Administration Regulations ("EAR") to expand BIS's existing end user controls to cover affiliates of certain BIS-listed parties owned at least 50 percent or more by entities on the Entity List or the Military End User ("MEU") List.
The Affiliates rule is modeled after the "50 Percent
Rule" in use by the U.S. Department of the Treasury's
Office of Foreign Assets Control ("OFAC"). The Affiliates
rule was effective September 30, 2025 (but will now be subject to
the Nov. 10th suspension).
Prior to the Affiliates rule, BIS utilized a "legally
distinct" standard, where subsidiaries, parent companies, and
sister companies were legally distinct from Entity/MEU-Listed
entities and, therefore, not subject to the same restrictions. For
complete analysis of the "Affiliates rule" our September
30th client advisory can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
