U.S. Department of Commerce Officially Suspends Enforcement of the Affiliates Rule for One Year and Removes Several Entities From the Entity List for China

This week, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published two notable decisions concerning the Entity List and other export control designations.

First, on November 10, 2025, BIS issued a final rule suspending the Affiliates Rule for one year from November 10, 2025 through November 9, 2026. This follows U.S. Secretary of Treasury Scott Bessent’s announcement of the administration’s intention to suspend the rule and the November 1, 2025 White House fact sheet confirming that intention. As described in our recent Advisory, BIS Expands List-Based Controls Through Implementation of “50 Percent Rule,” the Affiliates Rule had extended list-based requirements and restrictions under the Export Administration Regulations to entities that are owned 50% or more — directly or indirectly, individually or in aggregate — by (1) parties identified on the Entity List, Military End User List, and/or certain Specially Designated Nationals and Blocked Persons List and/or (2) entities that are themselves subject to those restrictions due to their ownership structure. Now that the Affiliates Rule is suspended, BIS’ previous legally distinct standard will apply for the time being, and list-based restrictions would only apply to specifically listed entities and related entities that are not legally distinct from the listed entities (e.g., branches).

For now, the suspension is only temporary. The Affiliates Rule will be reimposed in one year, on November 10, 2026 (unless, of course, the suspension is extended or there are other formal actions to remove the rule entirely). Companies should therefore continue to assess their business and dealings with foreign affiliates who may be covered by the Affiliates Rule. This continued vigilance may help minimize the risk of future violations of the Affiliates Rule when it is reimposed next year.

Second, in addition to the one-year suspension of the Affiliates Rule, BIS announced several revisions to the Entity List. These revisions concern the removal of one entity from the Entity List under the destination of China, People’s Republic of (China) and six aliases that BIS had associated with a different entity on the Entity List under the destination of China. The End-User Review Committee (ERC) determined, based on the review of additional information, that Arrow China Electronics Trade Co. Ltd. (Arrow) and the six other aliases do not pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States. Arrow was represented by Arnold & Porter partners Deborah Curtis and Murad Hussain.

Please contact any author of this Enforcement Edge post or your Arnold & Porter relationship attorney if you have any questions or to seek further guidance or advice.

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