On September 29, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security  (BIS) issued an interim final rule titled “Expansion of End-User Controls to Cover Affiliates of  Certain Listed Entities.” Known as the Affiliates Rule, the measure significantly broadened the  reach of U.S. export controls by extending restrictions to foreign affiliates 50 percent or more  owned, directly or indirectly, by one or more entities on BIS or OFAC restricted lists. This  alignment with OFAC’s “50 Percent Rule” closed a longstanding gap that had allowed listed  entities to access U.S. goods and technology through technically separate affiliates. 

The rule applies to foreign (non-U.S.) affiliates of entities on the Entity List, Military End-User  (MEU) List, and certain Specially Designated Nationals (SDNs)* under the Export  Administration Regulations (EAR). It introduced three key compliance concepts: (1) a “most  restrictive owner” standard, requiring affiliates to follow the toughest licensing condition  applicable to any listed owner; (2) a new Red Flag 29, obligating exporters to investigate  ownership when they suspect listed-party control; and (3) a strict liability approach, meaning  exporters may be liable even without knowledge of the ownership chain. To ease transition, BIS  issued a Temporary General License (TGL) permitting limited activity with affiliates in allied  countries until December 1, 2025. 

However, on November 1, 2025, the White House announced a one-year suspension of the rule’s  implementation, effective November 10, 2025, as part of a diplomatic arrangement with China.  The pause applies globally, not only to Chinese affiliates, and will be formalized by BIS through  additional rulemaking. While this suspension halts enforcement, it does not reverse the rule’s  adoption or its eventual activation.