A Reprieve, Not a Repeal: BIS Extends the Affiliates Rule Pause

November 09, 2026

Key Takeaways

Extension Confirmed: The Bureau of Industry and Security (“BIS”) has extended the suspension of its Affiliates Rule through January 10, 2027, averting the previously scheduled November 10, 2026, reimposition of the rule’s expanded export license requirements.
No Substantive Changes: The extension does not repeal or modify the underlying Affiliates Rule, which would automatically apply export license requirements (effectively, export restrictions) to foreign entities owned 50% or more by certain restricted parties. Existing export controls and sanctions requirements remain in effect.
Additional Time, Continued Uncertainty: Companies now have additional time to prepare for the reinstatement. However, the short extension underscores the importance of maintaining flexible compliance procedures as export controls remain closely intertwined with broader U.S. trade and national security policy.

Background

As discussed in our October 28, 2026 OnPoint, BIS published the Affiliates Rule on September 30, 2025, significantly expanding the reach of U.S. export controls under the Export Administration Regulations (“EAR”). The rule automatically applies license requirements to foreign entities owned 50% or more, directly or indirectly, individually or in the aggregate, by one or more parties on BIS’s Entity List or Military End User (“MEU”) List, or by certain Specially Designated Nationals (“SDNs”) designated under the programs specified in EAR §744.8(a)(1). In effect, the rule will extend the export restrictions applicable to the parent companies to the subsidiaries it covers.

On November 12, 2025, BIS published a final rule suspending the Affiliates Rule for one year, effective November 10, 2025, following a broader U.S.–China trade agreement. That suspension was scheduled to expire on November 9, 2026, with the Affiliates Rule taking effect again on November 10, 2026.

Although the recent extension of the broader U.S.–China trade arrangement through January 10, 2027, raised expectations that BIS would similarly extend the Affiliates Rule suspension, no implementing action had been published when our prior OnPoint was issued on October 28, 2026.

BIS Confirms Extension Through January 10, 2027

On November 9, 2026, BIS published a final rule in the Federal Register extending the Affiliates Rule suspension through January 10, 2027.

Accordingly, the expanded licensing requirements and related provisions of the Affiliates Rule will not be reimposed on November 10, 2026. Absent further BIS action, those requirements would return following the expiration of the extended suspension.

Importantly, BIS has not withdrawn or substantively revised the Affiliates Rule. The agency also expressly stated that it did not consider public comments submitted on the original rule in adopting this extension, reserving those comments for consideration in subsequent rulemakings.

The extension provides near-term regulatory certainty but leaves the rule’s longer-term future unresolved. It also illustrates the Administration’s willingness to adjust significant export control measures within a broader diplomatic and trade policy framework.

What Exporters Should Do Now

The extension provides additional time for companies to evaluate potential exposure without immediately implementing the Affiliates Rule’s expanded ownership-based licensing requirements. Companies should consider the following:

Maintain Existing Compliance Controls: The suspension does not affect existing Entity List, MEU List, or other applicable EAR restrictions. Separately, the U.S. Treasury Department’s Office of Foreign Assets Control continues to apply its 50 Percent Rule to entities owned 50% or more, directly or indirectly, individually or in the aggregate, by blocked persons.
Prioritize Ownership Due Diligence: Companies whose customers and other counterparties have complex ownership structures, or who may be affiliated with restricted parties, should map counterparty ownership and assess how reinstatement could affect customers, counterparties, and supply chains. They should also refresh due diligence procedures, end-user certificates, contractual protections, and escalation procedures for unresolved ownership questions in preparation for the reinstatement of the Affiliates Rule.
Preserve Implementation Flexibility: Rather than assume the rule will be suspended once again, companies should maintain a proportionate readiness plan and monitor further BIS action, particularly as the January 2027 implementation date approaches.

How We Can Help

Dechert regularly advises companies, financial institutions, and investment managers on export controls and sanctions compliance, including ownership-based restrictions and their implications for cross-border transactions. We are closely monitoring developments concerning the Affiliates Rule and can assist clients in assessing potential exposure, calibrating diligence and screening procedures, and preparing for future regulatory changes.