Guilty By Association: Export Controls Just Got More Inclusive

On September 29, 2025, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued a rule, effective immediately, that amended the Export Administration Regulations to address diversion concerns regarding entities appearing on the Entity List and other restricted-party lists. The new Affiliates Rule applies restrictions on exports (and reexports and transfers) to any foreign entity that is at least 50% owned, individually or in the aggregate, by one or more entities named on the Entity List, the Military End-User List, or those designated with certain identifiers on the Specially Designated Nationals List of the Office of Foreign Assets Control (OFAC).

Previously, only entities actually appearing on the Entity List were subject to its associated export restrictions. But now, legally distinct entities that are affiliates of entities on any of the three restricted-party lists are subject to their various restrictions when they meet the 50% or more