Suspension of the BIS 50 Percent Rule: A Warning Sign for Export Compliance

On November 1, 2025, the White House announced a one-year suspension of the Bureau of Industry and Security’s “50 Percent Rule,” also known as the Affiliate Rule. The suspension, effective November 10, 2025, is part of the broader economic agreement reached between the United States and China and represents an unexpected shift in U.S. export control policy.

Originally adopted on September 29, 2025, the rule extended export controls to any entity owned 50 percent or more by a company listed on the Entity List or the Military End-User List, even when the subsidiary itself was not explicitly named. Modeled after OFAC’s ownership rules, this approach significantly increased compliance obligations by requiring companies to assess ownership structures in addition to direct counterparties.

While the temporary suspension offers limited relief to international traders and defense and high-tech industries, it also highlights the growing volatility of the regulatory environment. Exporters are now faced with rules that can be implemented, paused, or reinstated within short timeframes, making long-term risk management increasingly complex.

Despite the suspension, companies should not lower their guard. The 50 Percent Rule reflects a broader trend toward expanded extraterritorial reach of U.S. export controls and a heightened focus on corporate ownership and control. Maintaining strong compliance frameworks and continuous regulatory monitoring remains essential in an environment where stability is becoming the exception rather than the norm.