The BIS Affiliates Rule extends Entity List restrictions to companies that are 50% or more owned by listed parties. Those companies get the restrictions even when their own names appear on no list. The Bureau of Industry and Security (BIS) published the rule on 30 September 2025 and suspended it six weeks later.
The suspension ends on 9 November 2026. The notice that started it also brings the rule back on 10 November 2026, unless BIS publishes an extension first. This guide explains what the rule does, where the dates stand as of 17 October 2026, and what a small exporter can check now.
What does the Affiliates Rule say?
BIS keeps the Entity List, a list of foreign companies, research institutes and people that need a license before they receive items subject to the Export Administration Regulations (EAR). Before the Affiliates Rule, only the names on the list were restricted. A subsidiary that was not named was outside the restriction, even when a listed parent owned all of it.
The interim final rule of 30 September 2025 changed that. In BIS's words, "any entity that is at least 50 percent owned directly or indirectly, individually or in the aggregate, by one or more entities on the Entity List" becomes "automatically subject to Entity List restrictions."
The rule reaches further than the Entity List. It applies the same test to companies owned by parties on the Military End-User (MEU) List, and by SDNs designated under the programs listed in 15 CFR 744.8. Where owners on different lists face different license requirements, BIS applies the most restrictive one to the company they own.
How the 50% test adds up
The test counts direct and indirect ownership, and it adds listed owners together.
- Listed company A owns 60% of company B. B is covered.
- Listed company A owns 30% of company C, and listed company D owns another 25%. Together they own 55%, so C is covered.
- Listed company A owns 100% of company E, and E owns 50% of company F. A owns F indirectly through E, so F is covered too.
BIS said it chose the 50% standard to be "consistent with longstanding Department of the Treasury practice." The arithmetic matches OFAC's 50 Percent Rule, which many exporters already apply to SDN ownership.
Minority owners are a red flag
Ownership below 50% does not trigger the rule. BIS still warned that foreign parties "with significant minority ownership by, or other significant ties to" a listed party "present a Red Flag of potential diversion risk." Its examples of other ties include overlapping board members. In those cases BIS says "additional due diligence is necessary."
When does the rule apply?
The dates come from the two Federal Register notices.
| Date | What happened |
|---|---|
| 29 September 2025 | The Affiliates Rule took effect (published 30 September 2025, 90 FR 47201). |
| 10 November 2025 | BIS suspended the rule. The suspension notice was published on 12 November 2025. A temporary general license for some transactions with covered affiliates had been due to run to 28 November 2025. |
| 9 November 2026 | The suspension ends, "absent a future extension." |
| 10 November 2026 | The suspension notice adds the rule back into the EAR. |
Look at the last row. The suspension notice already contains the amendments that put the rule back, and BIS wrote that they take effect "November 10, 2026 and extending indefinitely." So the rule returns by default. BIS has to publish a new notice to keep it suspended.
BIS tied the suspension to the trade agreement with China announced in late 2025. During the pause, BIS said it "will continue to evaluate U.S. national security and foreign policy interests related to these non-listed foreign affiliates of listed entities."
Why does this matter to a small exporter?
A name search misses these customers. Under the Affiliates Rule, a customer can be restricted while its name appears on no list. Checking the customer against the Consolidated Screening List is still the first step. You also need to know who owns it.
BIS put the duty plainly in the September 2025 rule:
The application of the Affiliates rule creates an affirmative duty to determine the ownership of other parties to the transaction in order to comply.
BIS also said exporters "can be held liable for unauthorized exports, reexports, or transfers (in-country) on a strict liability basis." In practice, shipping to an unlisted subsidiary of a listed company is treated like shipping to the listed company. Not knowing about the owner is no defense.
What if you cannot find out who owns a customer?
BIS added a red flag for this case to its Know Your Customer guidance, Supplement No. 3 to Part 732. If you cannot determine the ownership percentage of a foreign company that a listed party owns, BIS says you must do one of three things before you export:
- Resolve the red flag, for example by getting ownership details you can rely on.
- Apply to BIS for a license.
- Find a license exception that covers the restrictions on the listed owner. BIS notes that few exceptions are available.
BIS acknowledged "the opaque ownership structures and limited access to accurate ownership data in certain jurisdictions." An opaque ownership structure is a reason to ask more questions before you ship.
How is it different from OFAC's 50 Percent Rule?
The two rules share the ownership test. They differ in what follows from it.
| OFAC 50 Percent Rule | BIS Affiliates Rule | |
|---|---|---|
| Who runs it | Treasury (OFAC) | Commerce (BIS) |
| Whose ownership counts | Blocked persons, mainly SDNs | Entity List and MEU List parties, and SDNs under 15 CFR 744.8 |
| What it restricts | All dealings in the owned company's property by US persons | Exports, reexports and in-country transfers of items subject to the EAR |
| Applies to | US persons in any transaction | Anyone handling items subject to the EAR, US or foreign |
| Status on 17 October 2026 | In force | Suspended until 9 November 2026 |
If you only buy from foreign suppliers, the BIS rule rarely touches you, because you are not exporting to them. OFAC's rule still does. Our guide to OFAC's sanctions lists covers that side.
What should you do now?
The rule may come back in under a month, or in under three. These steps work either way.
Find out who owns your foreign customers
Ask each foreign customer who owns it, down to anyone holding 25% or more, and keep the answer. A short ownership questionnaire at onboarding is the usual way. In the Entity List download we analyzed for our Consolidated Screening List guide, China and Russia appeared most often in addresses, followed by Hong Kong, the UAE and Pakistan. Start with customers there.
Screen the owners as well as the customer
Run the parent companies and major shareholders through the same lists you use for the customer. A parent on the Entity List is the trigger for the rule. Our Consolidated Screening List guide explains which lists that covers and how to search them.
Write down what you checked and when
For each foreign customer, record the date, the names you checked (customer and owners), the lists covered and the result. If the rule returns, you will need to show you asked the ownership question before you shipped. A dated record is how you show it. Sanctions Verified, opening to QuickBooks Online and Xero users, screens each vendor and customer name against the US export lists and seven other sources, and keeps a dated certificate for every check.
Watch the Federal Register in early November
Any extension will appear as a BIS notice in the Federal Register. If nothing appears by 9 November 2026, plan on the rule applying from 10 November 2026.
What happens on a possible match?
If a customer, or one of its owners, matches a name on the Entity List, stop before you ship. Check the identifiers in the entry, such as address and aliases, against what you know. Then read the license requirement in the entry. Most entries cover all items subject to the EAR. If the match is real, you need a license or an applicable exception before you export. For the general steps on a sanctions hit, see sanctions compliance for small businesses. For export license questions, talk to an export controls lawyer or contact BIS.
