During a televised interview today, Treasury Secretary Scott Bessent announced that the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) will suspend implementation of the so-called “Affiliates Rule,” which was adopted by BIS as an interim final rule last month. Under this new Affiliates Rule, BIS expanded the scope of the Entity List, Military End User (MEU) List, and Section 744.8 restrictions to also apply to non-U.S. entities owned, directly or indirectly, and individually or in the aggregate, 50 percent or more by another party or parties enumerated on an applicable list.

Secretary Bessent announced that the Affiliates Rule would be suspended for one year in exchange for China’s suspension of its proposed export controls on rare earth minerals. However, we note that the Affiliates Rule restrictions went into effect immediately upon publication and, thus, will remain in effect until BIS publishes a Federal Register Notice formally suspending the rule. We recommend that companies continue to apply the Affiliates Rule until the Federal Register Notice is published and to explore options to enhance screening procedures, in case the Affiliates Rule comes into effect in October 2026. 

Please reach out to Josephine Aiello LeBeau, Anne Seymour, Jahna Hartwig, Grace Beck, or another member of Wilson Sonsini’s National Security and Trade practice with questions regarding this new development.