Decoding BIS's New 50 Percent Rule: End-User Controls Extended To Affiliates

On September 29, 2025, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") published a long-awaited interim final rule (the "Affiliates rule") amending Part 744 of the Export Administration Regulations ("EAR") to expand BIS's existing end user controls to cover affiliates of certain BIS-listed parties owned at least 50 percent or more by entities on the Entity List or the Military End User ("MEU") List. The Affiliates rule is modeled after the "50 Percent Rule" in use by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"). The Affiliates rule is effective September 30, 2025, but there is a savings clause associated with this action for shipments en route or shipments that will be completed by October 29, 2025, described in further detail in the rule itself.