On November 1, 2025, the White House published a Fact Sheet announcing that the Department of Commerce’s Bureau of Industry and Security (“BIS”) will suspend the new “50% Rule”—also known as the “Affiliates Rule”—for one year, beginning November 10, 2025. The suspension was among several concessions reached during trade negotiations between the United States and China amid President Donald Trump’s trip to East Asia from October 26–30, 2025, which concluded with a U.S.-China agreement on the sidelines of the 2025 Asia-Pacific Economic Cooperation (“APEC”) meeting in Gyeongju, South Korea. (For more information on the broader U.S.-China agreement, see Update of November 3, 2025.) Although the White House framed the suspension as part of the bilateral arrangement, the Fact Sheet indicates that the Affiliates Rule will be suspended more broadly—that is, in its application to all countries—until November 10, 2026.
BIS originally issued the Affiliates Rule as an Interim Final Rule on September 30, 2025 (see Update of October 1, 2025). Modeled on the long-standing “50% Rule” maintained by the Treasury Department’s Office of Foreign Assets Control in economic sanctions enforcement, the BIS version extended export control restrictions to any entity owned 50% or more, individually or in aggregate, by one or more parties listed on either the BIS Entity List or the Military End-User (“MEU”) List. (Notably, the Affiliates Rule addresses ownership only—not control.)
As BIS explained in the Interim Final Rule, this expansion of existing export restrictions was necessary to prevent diversionary schemes that could otherwise allow BIS Entity List or MEU List parties to access goods subject to U.S. export controls through their affiliates.
The Affiliates Rule has been in effect since September 29, 2025, and will remain so until November 9, 2025. However, Temporary General License No. 7 (“TGL 7”), codified in Supplement No. 1 to Part 736 of the Export Administration Regulations (“EAR”), currently provides broad protection for exporters, reexporters, and transferers. Specifically, TGL 7 permits certain exports, reexports, and in-country transfers to affiliates of BIS Entity List or MEU List parties when the affiliated entity is located in Country Group A:5 or A:6 (see Supplement No. 1 to Part 740 of the EAR), even if that affiliate is 50% or more owned by a listed party.
Although the one-year suspension of the Affiliates Rule provides immediate compliance relief, it must be emphasized that the pause does not represent a policy reversal. As a result, exporters, reexporters, and transferors should anticipate the rule’s eventual reimplementation and use this period to review ownership screening procedures and refine their export compliance programs accordingly.