Bureau of Industry and Security Extends Suspension of Affiliates Rule Until January 10, 2027, Further Delaying Expanded US Export Control Restrictions

The US Department of Commerce, Bureau of Industry and Security (BIS) has further extended the suspension of the so-called “Affiliates Rule” until January 10, 2027, giving affected companies more time to prepare. If implemented, the Affiliates Rule will significantly expand customer due diligence burdens for companies engaging in transactions involving items subject to the EAR.

The Affiliates Rule (formally titled the “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities”)¹ applies certain end-user controls under the Export Administration Regulations (EAR) to affiliates owned 50 percent or more, directly or indirectly, in the aggregate by entities or individuals on the BIS Entity List or Military End-User (MEU) List, or by certain Specially Designated Nationals (SDNs).² 

The Affiliates Rule was in effect for just over a month before BIS suspended it for one year. That suspension was scheduled to expire on November 9, 2026.³

The initial suspension was part of a broader US-China trade agreement reached last year.⁴ It, among other US actions, was paired with commitments from the Chinese government aimed at limiting proposed Chinese export controls on rare earth minerals, opening the Chinese agricultural market to US exporters, and other measures intended to safeguard and strengthen the US economy.⁵ The US and China have since agreed to extend that trade agreement through January 10, 2027 while negotiations continue.⁶ The November 9 suspension appears to track these ongoing negotiations, suggesting that the ultimate effective date or form of the Affiliates Rule may depend on the outcome of those negotiations. This is especially likely given the significant number of Chinese entities and individuals on both the Entity List and the MEU List.⁷

If implemented, the Affiliates Rule would operate similarly to the US Office of Foreign Assets Control’s 50 Percent Rule: a foreign entity that is owned 50 percent or more, directly or indirectly, in the aggregate by one or more entities or individuals on the Entity List, the MEU List, or by certain SDNs designated under the sanctions programs specified in 15 CFR § 744.8(a)(1), will be subject to the most restrictive EAR license requirements, license exception eligibility, and license review policy applicable to those owners.⁸ Companies engaged in transactions involving items subject to the EAR may therefore need to conduct more extensive customer and ownership due diligence in order to assess and manage these new export control requirements. Accordingly, affected companies may wish to monitor the Federal Register for updates regarding the Affiliates Rule, and to consider developing processes to identify and address the additional compliance obligations that would arise if and when the Affiliates Rule takes effect. 

We will continue to monitor for updates and expect to publish additional insights on this topic as it develops.

¹Fed. Reg., Extension of the Suspension of Expansion of End-User Controls for Affiliates of Certain Listed Entities (Nov. 9, 2026)

²Fed. Reg., Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities (Sept. 30, 2025) 

³Id.

⁴The White House, Fact Sheet: President Donald J. Trump Strikes Deal on Economic and Trade Relations with China (Nov. 1, 2025)

⁵Id.

⁶Reuters, US, China agree to extend 'the Busan agreement' until January, Bessent says (Sept. 23, 2026)

⁷15 CFR pt. 744, supp. no. 7 (2026); 15 CFR pt. 744, supp. No. 4 (2026)

⁸Fed. Reg., Expansion of End-User Controls To Cover Affiliates of Certain Listed Entities (Sept. 30, 2025); US Dep’t of the Treasury, Office of Foreign Assets Control, FAQ 401 (Aug. 13, 2014)