BIS Affiliates Rule: University Prep Guide

TL;DR: On September 29, 2025, the Bureau of Industry and Security (BIS) adopted the “Affiliates Rule” — often called the “50% Rule” — as an interim final rule. It automatically extends Entity List and Military End-User (MEU) List restrictions to any entity that listed parties own, directly or indirectly and individually or in aggregate, 50% or more of, even though the affiliate itself is never separately named. BIS then suspended the rule for one year, effective November 10, 2025, as part of a broader U.S.-China trade arrangement. The suspension is due to lapse on November 9, 2026, with the license requirements and related provisions set to be reimposed on November 10, 2026. University export-control screening offices should treat that date as a real compliance deadline while building in flexibility, since the underlying trade negotiation that produced the suspension could still change the timeline again before then.

What the Affiliates Rule actually changes

Before this rule, a company or institution was only a restricted party under the Export Administration Regulations (EAR) if it appeared by name on a BIS list — most commonly the Entity List or the Military End-User (MEU) List. A subsidiary or joint venture that a listed entity quietly owned, but that had never itself been added to a list, fell outside the restriction as a matter of black-letter EAR text, even if everyone understood it was effectively the same organization under a different name.

The Affiliates Rule closes that gap by operation of ownership rather than by separate designation. Under the rule, an unlisted entity is automatically treated as if it were on the Entity List or MEU List — subject to the same license requirements — once one or more listed parties own 50% or more of it, whether that ownership is direct or indirect, and whether it comes from a single listed owner or from combining the stakes of multiple listed owners. A foreign company that is 25% owned by one Entity List company and 25% owned by a separate MEU List company is captured just as much as one that is 50%-owned by a single listed parent, because BIS aggregates ownership across listed parties rather than evaluating each listed owner’s stake in isolation. Where the underlying listed owners are subject to different license requirements, the most restrictive of those requirements applies to the affiliate. Because the rule operates automatically through corporate ownership rather than through a new Federal Register listing for each affiliate, BIS does not publish a name-by-name list of every entity the rule newly covers — an exporter (or a university acting as one) has to work the ownership question out itself.

Timeline: adoption, suspension, and the November 10, 2026 reimposition

September 29, 2025 — BIS publishes the Affiliates Rule as an interim final rule, effective immediately on publication, expanding Entity List and MEU List restrictions to majority-owned affiliates as described above. A short-lived Temporary General License authorized certain exports to trusted-partner destinations (Country Groups A:5/A:6) and to joint ventures involving non-listed U.S. or trusted-partner parties while the rule took effect.
November 10, 2025 — Following the announced U.S.-China trade and economic arrangement, BIS suspends the rule’s license requirements and related provisions for one year. The suspension notice was published in the Federal Register on November 12, 2025.
November 9, 2026 — The one-year suspension is due to expire.
November 10, 2026 — The date BIS has identified for the license requirements and related provisions of the Affiliates Rule to go back into force, absent a further extension or a new rulemaking.

Treat November 10, 2026 as the working deadline for institutional preparation, but not as a locked-in certainty: the suspension itself was a product of an evolving bilateral trade arrangement, and export-control practitioners covering the rule have noted that a further extension, modification, or permanent rollback is plausible depending on how that arrangement develops between now and the expiration date. Screening offices should build a plan around the November 10, 2026 date while monitoring BIS’s own published notices — not secondary summaries — for any update as the date approaches.

Red Flag 29: the duty to resolve unknown ownership

Alongside the Affiliates Rule, BIS added a new item — commonly referred to as Red Flag 29 — to its long-standing “Know Your Customer” red-flag guidance under the EAR. It addresses the specific situation the 50% Rule creates: what happens when a screener has reason to know that a foreign party has one or more owners on the Entity List or MEU List, but cannot pin down the actual ownership percentage.

Under Red Flag 29, that situation triggers an affirmative duty. The exporter — or the university office acting in that capacity — must either (1) determine the actual ownership percentage before proceeding with the transaction, or (2) apply to BIS for a license. If the ownership percentage genuinely cannot be determined after reasonable diligence, the guidance directs the exporter to proceed on the assumption that the 50% threshold is met, meaning a license is required unless an exception applies. In practice, this converts “we don’t know” from a defensible gap into an obligation to either resolve the question or stop the transaction — a meaningfully different standard than name-based screening, where a clean name-match result has historically been treated as sufficient.

Why this specifically matters for university export-control screening offices

Commercial exporters can often obtain corporate ownership records through trade-compliance vendors, corporate registries, or direct representations built into supplier contracts. Universities interact with foreign counterparties in messier, less contractually structured ways that make ownership tracing harder in practice:

Equipment and materials vendors. A lab’s controlled-item supplier may be a subsidiary of a listed parent without that relationship being obvious from the vendor’s name or website.
Sponsored research and subaward partners. A foreign co-investigator’s home institution, or a foreign company sponsoring a research agreement, may itself be privately held by, or a joint venture with, a listed entity — ownership structures that a research-administration office is rarely positioned to independently investigate.
Visiting scholars and deemed exports. A visiting researcher’s employer or funding source (rather than the researcher’s own nationality) can now carry export-control significance if that employer is a majority-owned affiliate of a listed party — a wrinkle that standard deemed-export screening at lab onboarding workflows were not originally built to catch.
Material transfer and collaboration agreements with foreign companies whose ownership can change (through acquisition, investment, or restructuring) after the agreement is signed, without the university necessarily being notified.

None of this is unique to universities — but universities typically run screening with smaller compliance staffs, against a much wider and more informally-sourced set of counterparties, than a large commercial exporter does. That combination is exactly what makes ownership-based screening harder to operationalize on a campus than name-based list screening already is.

Action checklist before November 10, 2026

Confirm your restricted-party screening tool’s ownership/affiliate-screening capability. Standard restricted party screening against the Consolidated Screening List checks names, not ownership percentages. Ask your screening vendor directly whether their tool flags majority ownership by a listed entity, or only exact and fuzzy name matches — many commercial platforms added or expanded affiliate-linkage modules specifically in response to this rule, but coverage and depth vary significantly by vendor.
Identify your highest-risk counterparty categories now. Prioritize controlled-item vendors and equipment suppliers, foreign sponsors and subaward partners, and foreign employers of incoming visiting scholars or postdocs — the categories described above — rather than trying to build ownership-verification capacity for every counterparty at once.
Write a documented Red Flag 29 escalation procedure. Define, in writing, what a screener does the moment a partial ownership match surfaces: who verifies ownership documentation, what sources count as adequate diligence, and who has authority to pause a transaction or initiate a BIS license request. This should route through the same export-control compliance structure your institution already uses for licensing decisions, not sit as a new, separate process.
Add ownership questions to intake and onboarding forms where they aren’t already present — visiting-scholar intake, foreign subaward setup, and controlled-item procurement requests are the highest-value places to capture “who ultimately owns this counterparty” information before a transaction is already underway.
Brief your empowered official and RCO/export-control staff specifically on the ownership-aggregation mechanic (multiple listed owners’ stakes can combine to reach 50%) and on the “presume 50% if you can’t determine it” default under Red Flag 29 — both are easy to miss if training only covers name-based list screening.
Track BIS’s own published notices directly, not secondary commentary, as November 10, 2026 approaches. Given the rule’s suspension already tracked a live trade negotiation once, a further change to the reimposition date is plausible and should be monitored rather than assumed away.
Cross-reference with your institution’s Entity List and MEU List screening baseline already documented under your EAR compliance checklist, so the Affiliates Rule is treated as an extension of existing screening obligations rather than a parallel, disconnected process.

What’s still unsettled

A few practical questions do not yet have a fully settled answer as this rule heads toward reimposition, and screening offices should treat them as open rather than resolved:

Whether BIS will reinstate a Temporary General License, comparable to the one issued alongside the original September 2025 rule, at or before the November 10, 2026 reimposition — none has been confirmed as of this writing.
Whether the reimposition date itself holds, given that the suspension was tied to an evolving bilateral trade arrangement rather than a fixed, unconditional calendar commitment.
How consistently commercial screening tools will surface ownership-based matches versus name-based matches, since ownership data is inherently harder to source and keep current than list membership.

Given that, the safest institutional posture is to build the escalation procedure and staff training described above regardless of whether the date holds exactly — the underlying screening gap the rule addresses (unlisted, majority-owned affiliates of restricted parties) is a real due-diligence exposure independent of this specific rule’s on-again, off-again procedural history.

Frequently asked questions

Does the Affiliates Rule apply to universities the same way it applies to commercial exporters?

Yes — the EAR’s definition of “exporter” is not limited to commercial companies, and a university transferring controlled items, software, or technology (including via a deemed export to a foreign national) is subject to the same Affiliates Rule mechanics as any other exporter. What differs in practice is capacity: universities generally have less access to detailed corporate-ownership data on their counterparties than large commercial exporters with dedicated trade-compliance functions.

Is the Affiliates Rule in effect right now?

As of this writing, the rule’s license requirements and related provisions are suspended, effective November 10, 2025 through November 9, 2026, with reimposition scheduled for November 10, 2026. Confirm current status directly against BIS’s published notices before relying on this for a specific transaction, since suspensions and extensions are exactly the kind of detail that can change.

Does the 50% Rule apply to the OFAC SDN List or only the Entity List and MEU List?

The Affiliates Rule as adopted by BIS applies to the Entity List and the Military End-User List, both administered under the EAR. It is a distinct legal mechanism from OFAC’s separate, longer-standing 50% ownership aggregation rule for the Specially Designated Nationals (SDN) list, which operates under different sanctions authority. Don’t assume clearance under one automatically clears the other — they are separate lists administered by separate agencies with separate rules.

What should a screening office do if it can’t determine an entity’s ownership percentage?

Under Red Flag 29, once a screener has reason to know a counterparty has one or more owners on the Entity List or MEU List, it must either determine the actual ownership percentage before proceeding or apply to BIS for a license. If the percentage genuinely can’t be determined, the guidance directs treating the 50% threshold as met — meaning a license is required unless an exception applies — rather than proceeding on an assumption of clearance.

Could the November 10, 2026 reimposition date change again?

It’s possible. The one-year suspension itself was a product of an evolving U.S.-China trade arrangement rather than a fixed, unconditional deadline, and export-control practitioners tracking the rule have flagged further extension or modification as plausible. Screening offices should prepare for the November 10, 2026 date while monitoring BIS’s own notices for any change as it approaches, rather than treating the date as immovable.

Related CASRAI resources

Restricted Party Screening — the baseline name-matching screening process the Affiliates Rule extends beyond named parties.
Consolidated Screening List (CSL) — what the CSL consolidates and how it relates to the underlying Entity List and MEU List.
5 Actions Required for EAR Compliance — the broader EAR compliance baseline this rule sits within.
Deemed Export Screening at Lab Onboarding — how visiting-scholar and lab-onboarding screening intersects with the ownership question above.
The Four Pillars of Export Control Compliance — where ownership-based screening fits within an institution’s broader compliance program.
Empowered Official: The ITAR-Required Export-Control Compliance Role — the institutional role typically responsible for license decisions triggered by Red Flag 29 escalations.
ECCN Lookup Guide for Research Equipment — classifying the underlying items before ownership-based screening becomes relevant.
Criminal Liability Under the Foreign Direct Product Rule — a related EAR expansion mechanism relevant to the same compliance offices.
Export Control Enforcement Trends 2026 — current BIS enforcement posture relevant to prioritizing this preparation.