The U.S. Department of Commerce today suspended implementation of a rule that would expand export restrictions to affiliates of certain listed entities, pushing the measure’s effective date to January 10, 2027, as the United States and China continue trade negotiations.
In September 2025, the Bureau of Industry and Security (BIS) published the “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities” interim final rule, referred to as the “Affiliates Rule.” The rule amends the Export Administration Regulations by extending certain Entity List and Military End User (MEU) List restrictions to entities that are 50 percent or more owned by one or more listed entities. The rule is intended to address concerns that listed entities could circumvent applicable export restrictions by conducting business through affiliated entities that were not themselves identified on a BIS restricted party list.
A full summary of the Affiliates Rule and its implications for exporters’ due diligence obligations is available in our October 9, 2025 Insight.
BIS initially suspended implementation of the Affiliates Rule in November 2025 in the wake of trade negotiations between the United States and China that resulted in the “Busan Agreement,” postponing implementation of the rule until November 9, 2026. In September, the United States and China agreed to extend the Busan Agreement until January 10, 2027. BIS has now similarly extended the suspension of the Affiliates Rule through that date.
While the Affiliates Rule is suspended, current Entity List and MEU List restrictions stay in effect, and companies remain subject to existing due diligence obligations for transactions involving items subject to the Export Administration Regulations. Should the Affiliates Rule take effect in January, companies would need to incorporate the rule’s ownership-based screening requirements into their compliance procedures.
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Cassidy Levy Kent’s attorneys, compliance professionals, economists, and licensed customs brokers assist clients navigating export controls and sanctions issues. We expect further developments in this space and will continue to provide updates. Please contact us with any questions.