Executive Summary
- What’s new: On November 10, 2025, BIS suspended the Affiliates Rule, which extended export restrictions to certain foreign entities owned by listed parties, for one year.
- Why it matters: Although the Affiliates Rule is officially on hold, the suspension automatically reimposes the Affiliates Rule on November 10, 2026, unless BIS takes further regulatory action.
- What to do next: Companies should consider leveraging this period to minimize future exposure and proactively address ownership visibility gaps to assess and mitigate the effects of reimposition of the Affiliates Rule on their businesses.
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On November 10, 2025, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a final rule, announcing a one-year suspension (the Suspension) of its interim final rule, “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities” (the Affiliates Rule). The Suspension will last through November 9, 2026, unless extended by BIS.
Background of the Affiliates Rule
As we discussed in a recent client alert, on September 29, 2025, BIS released an interim final rule (IFR) that extended export restrictions to non-U.S. entities owned 50% or more, directly or indirectly, individually or in aggregate, by listed parties designated on the Entity List, Military End User (MEU) List, and under certain Department of the Treasury Office of Foreign Assets Control (OFAC) sanctions programs identified in Section 744.8(a)(1) of the Export Administration Regulations (EAR).
The Affiliates Rule was in effect from September 29, 2025, until November 10, 2025. During the six weeks the rule was in place, Temporary General License No. 7 (TGL 7) authorized transactions that would otherwise be restricted by the Affiliates Rule to or within:
- Specified U.S.-allied countries.
- Any nonembargoed countries for joint ventures that are headquartered in the U.S. or are U.S.-allied companies.
On October 30, 2025, following a series of negotiations aimed at reducing trade tensions between the United States and China, the U.S. announced a one-year pause on the newly adopted Affiliates Rule. The Suspension was formalized on November 10, 2025, when BIS issued a final rule titled “One Year Suspension of Expansion of End-User Controls for Affiliates of Certain Listed Entities.” In return, China has committed to suspending its expansive new export controls on rare earths and related measures for the same period.
Although the Suspension is the product of a deal with China, the Affiliates Rule has been suspended in its entirety, including with regard to affiliates of non-Chinese-listed entities.
Summary of the Suspension
The Suspension has two phases.
Phase 1: All changes previously made to the EAR by the Affiliates Rule will be suspended through November 9, 2026, unless extended by BIS.
Phase 2: The Suspension reimposes the Affiliates Rule’s license requirements and related provisions back into the EAR “effective November 10, 2026 and extending indefinitely.”
The final rule does not address any of the public comments submitted in response to the IFR, although BIS noted that it “will continue to evaluate U.S. national security and foreign policy interests” related to non-listed foreign affiliates of listed entities during the suspension period.
Implications for Industry
Although the Affiliates Rule is officially on hold, the Suspension automatically reimposes the Affiliates Rule on November 10, 2026, unless BIS takes further regulatory action.
Given the broad bipartisan support for the Affiliates Rule, companies should recognize that future enforcement threats persist and leverage this period to minimize future exposure and proactively address ownership visibility gaps. See our September 30, 2025, client alert for ways companies can take action to assess and mitigate the effects of the Affiliates Rule on their businesses.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.