On October 30, U.S. Treasury Secretary Scott Bessent announced that the U.S. Department of Commerce, Bureau of Industry and Security (BIS) will delay the implementation of the recently announced BIS Affiliates Rule for one year.

The announcement followed negotiations between President Trump and China’s President Xi Jinping and came, according to Secretary Bessent, in exchange for China’s suspension of its rare earth export licensing regime. BIS has now published a final rule confirming that the suspension will be in effect from November 10, 2025 through November 9, 2026.

The Affiliates Rule was designed to close a longstanding loophole by extending restrictions to foreign affiliates of parties already subject to export restrictions. Under this rule, a foreign entity that is at least 50% owned, directly or indirectly, individually or in the aggregate, by one or more entities on the Entity List or Military End-User List, or by parties subject to controls specified at 15 CFR § 744.8 (related to Specially Designated Nationals (SDNs)), will itself be subject to the same restrictions as the listed entity.

In preparation for the rule’s reinstatement, whether after November 9, 2026, or sooner due to policy shifts, parties should evaluate whether enhancements to their compliance programs are needed. We previously wrote about the Affiliates Rule and related compliance recommendations here.

Please contact the authors if you have any questions about how this update will affect your business.