The US “affiliates rule” is paused, not gone. Check who owns your customers.

On 29 September 2025 the US Bureau of Industry and Security issued what is now called the affiliates rule. It extended the restrictions that apply to companies on the Entity List, the Military End User List and certain US sanctions lists to any company owned 50% or more, directly or indirectly, by one or more of those listed parties. Six weeks later, as part of the US–China trade arrangement, BIS suspended it for a year.

The published suspension runs to 9 November 2026. On 23 September the US and China agreed to extend their truce to 10 January 2027, and the pause on the affiliates rule is expected to move with it. As of 9 October, BIS has not published a Federal Register notice changing the date. Until it does, 10 November remains the date in the rule.

What changes when it returns

Until now, an exporter could screen a customer’s name against the Entity List and, if it was not there, treat the customer as unrestricted. The affiliates rule ends that. A subsidiary that appears on no list carries its parent’s restrictions if listed parties own half or more of it, and holdings by different listed parties are added together.

In practice, the licence requirements that apply to a listed owner will apply to its unlisted subsidiaries, joint ventures and holding companies. For many Entity List parties that means a licence for almost any item subject to US export rules, with applications reviewed under a presumption of denial.

Who should care outside the US

The rule follows the item, not the exporter. A UK or European company is caught when it re-exports or transfers US-origin goods, software or technology, or foreign-made items with enough US content to fall under US rules. Distributors of US electronics, integrators using US chips, and suppliers in defence and data-centre chains are the obvious cases.

Not sure who owns your customers? The checklist at the end of this note sets out the 12 checks in the order the work runs. Get the checklist →

Two things the pause never changed

• The duty not to look away. BIS has long told exporters to take extra care with subsidiaries and affiliates of listed parties, and that a company acting as a front for a listed entity is treated as the listed entity.
• OFAC’s own 50% rule. The sanctions rule that treats entities 50% or more owned by blocked persons as blocked is separate, and has applied throughout.

Where we come in

Meridian Intermediaries traces customer and consignee ownership to the top, adds up listed holdings, and records the source and date of every figure. You receive a ranked list of customers to clear, license or exit, in a form you can show an auditor, a bank or a regulator.

What to do before the pause ends

1. List the customers and consignees who receive US-controlled items, including those reached through your own distributors.
2. Trace their ownership to the top, not just their name. Record who owns what share, and where that information came from.
3. Flag anyone with a listed owner at any level, and check whether aggregated listed holdings reach 50%.
4. Decide now what happens to open orders for those customers on the day the rule returns: licence application, hold, or exit.

China’s pause on its own rare earth controls rests on the same truce. Both have now been extended once at short notice, and both could end at short notice. Our advice is to plan for whichever date is earliest in writing.