Commerce Department Enhances Entity List Restrictions:
New 50 Percent Affiliates Rule and Licensing Requirement
The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) has published an interim final rule (the “Affiliates Rule”), effective as of September 29, 2025, that extends Entity List restrictions to any foreign (non-U.S.) entity that is at least 50 percent owned by one or more entities on the Entity List, the BIS Military End-User (“MEU”) List, or sanctioned parties under certain U.S. sanctions programs. This represents a marked departure from the longstanding Entity List regulation, which excluded entities that are not specifically named on the Entity List, regardless of their affiliation with Entity List entities. Moreover, the Affiliates Rule creates an affirmative duty for exporters, re-exporters or transferors of items subject to U.S. export controls to determine the ownership of parties involved in a transaction or obtain a BIS license.
