Affiliates Rule Aftermath – Finding the Right Path Forward

Mike and Brent take an even deeper dive into the “Affiliates” or “50%” Rule announced by the Bureau of Industry & Security (BIS) on September 29, 2025. They identify several misperceptions in the public discussion, explain why they are misperceptions, and identify the pitfalls of operating under those misperceptions—especially in response to inquiries by BIS about pre-rule due diligence on affiliates of entities on the entity list. Specifically, they discuss why the Affiliates Rule is a close cousin to the Office of Foreign Assets Control’s own 50% rule, but why and how BIS’s Affiliates Rule serves different national security objectives and operates a bit differently (02:42); whether the Affiliates Rule brings new compliance burdens and, if so, risk-based due diligence strategies and likely questions from BIS regarding why (10:26); why in the ...