Exporters Urged to Get Ready for BIS Affiliates Rule Despite Pause
Exporters should continue preparing to adhere to the Bureau of Industry and Security’s new Affiliates Rule, even though the Trump administration recently suspended it for a year, two compliance experts said Nov. 13 during a webinar hosted by the American Association of Exporters and Importers.
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Although many possibilities exist, including that the pause will be shortened or lengthened or that the regulation will be changed, no one really knows what will happen in the coming months, said Mark Nakhla, Kharon’s chief research officer, and Michael Ford, president of TradeBridge Consulting. The rule remains on the books and is set to take effect, at least for now, on Nov. 9, 2026, and that's what exporters should plan for, they said.
“I truly have no idea” whether the rule or the new implementation date will be modified, Nakhla said. “Could it change? Absolutely. Could it evolve? Absolutely. Could it stay the same? Absolutely.”
Exporters are advised to use the extra time provided by the pause to get ready. “What we need to do to comply is still real,” Ford said. “It's just a matter of how we're going to deal with this. Let’s make sure that we use the time, this pause, wisely and be prepared as to what comes next.”
Nakhla agreed. “This is the time for everybody to kind of stress-test their response [and] strengthen how they’re going to do due diligence on affiliates and ownership structures. Treat this as kind of a period of heightened monitoring and planning and a chance to get ahead of the next phase.”
Exporters seem to be heeding that advice, Nakhla said. “Since the announcement of the pause, I haven’t seen a letup in energy as it relates to trying to find the right solution” to comply with the rule.
BIS released the rule in late September to try to close a loophole in export controls (see 2509290001), but the administration formally suspended it Nov. 10 as part of a trade deal with China (see 2510300024 and 2511100017). The rule will apply BIS Entity List and Military End-User List restrictions to entities owned at least 50% by companies on those lists.
For exporters, the rule "raises the compliance bar significantly," Nakhla said. "It's no longer enough to just check the name of a counterparty against a government list. Managing [a] supply chain now requires active situational awareness -- tracing corporate structures, mapping networks of affiliates, recognizing where there may be indirect exposure that previously may have flown under the radar."
When the rule takes effect, exporters will “need to be on the alert” for efforts by listed companies to create new entities to circumvent the regulations, Ford said. Although an order from a U.K. company might seem innocuous because the country is a U.S. ally, it might turn out the firm is owned by a listed company, he said. “You gotta be careful there, too.”
Ford said he expects smaller companies to face more challenges complying with the rule than larger ones that are more accustomed to dealing with complex regulations. While compliance won’t be easy even for larger companies, "it’s going to be somewhat of a different path than a smaller company that needs a lot of help and guidance."