BIS Pushes the 50 Percent Affiliates Rule to January 10. Your Screening Problem Didn't Move.

The Bureau of Industry and Security filed a four-page rule this afternoon that pushes back a major export control change. The “Affiliates Rule,” which treats companies that are at least 50 percent owned by Entity List parties as if they were on the list themselves, was due to come back into force after November 9. Now the suspension runs through January 10, 2027 [1].

That’s 62 more days. It isn’t a repeal, and nothing in the rule says it’s the last extension.

What BIS actually filed

The new rule is short. It says the suspension “was set to end November 9, 2026” and that BIS “is extending the suspension through January 10, 2027.” It takes effect November 9, the same day it’s scheduled to appear in the Federal Register [1]. It was filed for public inspection at 4:15 p.m. on November 5 [1].

The stated rationale is one sentence: “BIS is extending the suspension until January 10, 2027” [1]. BIS invoked the Export Control Reform Act to skip notice and comment, and said comments already filed on the Affiliates Rule “will be considered for future, subsequent rulemakings” [1]. One small drafting note: the rule’s background section dates the original rule to September 20, 2025, while its own DATES line, and the 2025 stay, say September 30 [1, 2]. It doesn’t change anything legally. It’s just the kind of thing that happens when a rule is written against a clock.

Here’s the backstory. BIS issued the Affiliates Rule as an interim final rule effective September 29, 2025 [3]. After the Trump–Xi meeting in Busan on October 30, 2025, the U.S. agreed to suspend it as part of a trade truce, and Beijing suspended its rare earth export restrictions [6]. BIS’s stay took effect November 10, 2025, and was built in two phases: one year of suspension, then automatic reimposition on November 10, 2026 “and extending indefinitely” [2]. In late September, Treasury Secretary Scott Bessent announced the truce would run through January 10, 2027 [5, 6, 7]. Trade lawyers spent the following weeks pointing out that there was still no Federal Register notice, and that without one the rule would snap back on schedule [5, 6, 7]. This rule is that notice.

What the rule does when it comes back

The substance hasn’t moved. Under the Affiliates Rule, any entity owned at least 50 percent, “directly or indirectly, individually or in the aggregate,” by one or more Entity List parties is itself subject to Entity List restrictions [3]. The same treatment applies to entities owned by Military End-User List parties and certain sanctioned parties under the SDN-related provision in 15 CFR 744.8 [3]. When several listed owners together reach 50 percent, BIS applies the most restrictive license requirement among them [3, 7].

BIS modeled this on Treasury’s longstanding 50 percent rule for sanctions, and said doing so “will likely ease the burden” because exporters already run that analysis for OFAC [3]. Two other pieces matter more for a small team:

• If you can’t figure out the ownership, you have to stop. The rule added a new Red Flag 29: if you can’t determine the ownership percentage of a foreign entity owned by listed parties, you must resolve the red flag, get a license, or find a license exception before shipping [3].
• Liability is strict. BIS wrote that exporters “can be held liable for unauthorized exports, reexports, or transfers (in-country) on a strict liability basis,” and that the rule “creates an affirmative duty to determine the ownership of other parties to the transaction” [3].

BIS also warned that significant minority ownership, overlapping board members or “other indicia of control” are a red flag that calls for more due diligence, even below 50 percent [3].

What this means if you build things

The obvious reaction is “I make software, not chips.” The EAR defines “item” as “commodities, software, and technology” [4]. If what you ship is subject to the EAR and your customer list includes companies in China or other places where Entity List parties own things, this rule is about you.

What bothers me is the gap between how this rule was estimated and how it actually works. BIS estimated the whole rule would add 245 license applications a year [3]. Maybe that’s right for license filings. But the cost of this rule isn’t the license applications. It’s the ownership tracing every exporter has to do on every counterparty to find out whether they need a license in the first place, and that work doesn’t show up in that number. A company with a sanctions team and a paid ownership-data vendor already does most of it for OFAC, as BIS points out [3]. A 30-person company selling dev tools through a reseller in Shenzhen probably doesn’t.

This is the legibility problem I’ll keep coming back to in this column. A 50 percent bright line is clear on paper. Getting reliable ownership data in the places where it matters is the hard part, and BIS says so itself, citing “opaque ownership structures and limited access to accurate ownership data in certain jurisdictions” [3]. That’s the government describing the exact gap a small team falls into.

So what do you do with 62 days? The law firm alerts all say the same things: move from name-based screening to ownership-based screening, map counterparties for listed owners, add ownership questions to onboarding and contracts, and plan for reimposition on short notice [5, 7]. Crowell & Moring’s version is blunt: “the rule has not been repealed” [6]. I’d add one thing that’s specific to software companies. Find out whether your screening vendor actually resolves multi-tier, aggregated ownership or just matches names against the list. The answer decides whether this is a configuration change or a project.

I’d also be careful about reading anything into the extension. The rule ties the new date to nothing. It gives no criteria and doesn’t say what BIS is weighing [1]. A suspension that rides on trade negotiations can be extended again, or not, and you’d learn which a few days in advance, as you did this time.

What I’m watching

• January 10, 2027. Whether BIS extends the suspension again, lets the rule return, or finally revises it using the comments it says it will consider “for future, subsequent rulemakings” [1]. Pillsbury notes BIS could also shorten or end the suspension through further rulemaking [5].
• The official November 9 Federal Register version. I read the public inspection copy [1]. I’ll check whether the published text corrects the September 20 date.
• Entity List additions in the meantime. Even with the Affiliates Rule suspended, BIS can still add specific affiliates by name when it has reason to [3]. A run of subsidiary listings would tell you which way the agency is leaning.