On November 10, 2025, the US Department of Commerce’s
Bureau of Industry and Security (BIS) issued a final rule titled “One
Year Suspension of Expansion of End-User Controls for Affiliates of
Certain Listed Entities.” As the title indicates, the final rule formally
enacts a one-year suspension of the BIS Affiliates Rule, which had
been in effect since September 29, 2025, as we previously reported
in “BIS Expands Entity List Controls to All Unlisted Foreign Affiliates Owned 50% or More by Listed Parties.”
This action follows the November 1 White House fact sheet
released after a meeting between President Trump and
President Xi that occurred in Busan, South Korea, ahead of last
month’s APEC summit.
Trade Context
In exchange for the one-year suspension of the Affiliates Rule –
scheduled to end on November 9, 2026 – China has agreed to
suspend the global implementation of its export controls on rare
earths and related measures announced on October 9, 2025.
China will also issue general licenses authorizing exports of rare
earths, gallium, germanium, antimony, and graphite to US end
users and their global suppliers. This effectively removes certain
controls that China has maintained since 2023.
Implementation Details
The interim final rule was in effect from September 29, 2025,
through November 9, 2025. Under the BIS final rule, the
suspension will be implemented in two phases:
Phase I – BIS will temporarily suspend all changes made to the
Export Administration Regulations (EAR) by the Affiliates Rule,
effective November 10, 2025, through November 9, 2026.
Phase II – The suspended changes will be reintroduced into
the EAR upon expiration of the one-year period.
The final rule’s Federal Register summary notes that the
suspension will end on November 9, 2026, “absent a future
extension.” This language indicates that the Affiliates Rule may
continue to serve as a negotiating instrument in US-China trade
discussions that have been ongoing during President Trump’s
second term.
A recent letter from House Select Committee on the CCP
Chairman John Moolenaar – co-signed by House Foreign Affairs
Committee Chairman Brian Mast, House Permanent Select
Committee on Intelligence Chairman Rick Crawford, and House
Homeland Security Committee Chairman Andrew Garbarino,
all Republicans – urged Secretary Lutnick and the Commerce
Department to investigate several specific companies under,
for example, Commerce’s ICTS authority “to protect the U.S.
market from technology threats.” While Chairman Moolenaar
had not, as of the date of the this alert’s publication, commented
on the one-year suspension of the BIS Affiliates Rule, the letter
reaffirms Congress’s close scrutiny of unlisted affiliates of Chinese
technology firms.
Recommended Actions
Although the final rule allows for the possibility of an extension,
companies should use this one-year suspension to proactively:
Review and strengthen existing export compliance programs;
Develop or enhance internal processes to ensure compliance
prior to reinstatement of the Affiliates Rule’s broad compliance
obligations; and
Analyze business partner vulnerabilities that may be affected
by intervening changes to the Affiliates Rule’s effective date.
Because BIS merely postponed – rather than rescinded – the
Affiliates Rule, it can be reactivated with little notice through
a short Federal Register notice. The suspension, while
significant, should therefore be treated as temporary. A snap-back could occur if Washington views Beijing as failing to meet
commitments under the Busan framework – such as delays in
implementing the rare-earth licensing regime – or if broader
geopolitical developments prompt a policy response. In that
event, transactions involving China-affiliated counterparties could
again face midstream restrictions. Companies should mitigate
this risk by incorporating protective clauses, monitoring BIS
communications closely, and avoiding assumptions that the
current pause provides lasting certainty.
For more information, please contact the authors below.
