Recent regulatory changes have placed even greater attention on ownership structures and affiliated entities. The Bureau of Industry and Security (BIS) introduced an Affiliates Rule that would extend export control restrictions to entities that are 50% or more owned, directly or indirectly, by organizations appearing on the Entity List, Military End User (MEU) List, or certain sanctioned party lists.
The suspension of the BIS Affiliates Rule (also referred to as the BIS 50% rule) has been extended through January 10, 2027. Although the rule remains suspended, it has not been withdrawn, and further regulatory developments remain possible. Importers and exporters should continue taking proactive steps to evaluate their screening processes and prepare for potential changes to compliance requirements.
Organizations that rely solely on traditional denied party screening may find themselves exposed, as many screening tools identify only explicitly listed entities. If implemented, the BIS Affiliates Rule would extend certain export control restrictions beyond explicitly listed parties to include entities connected through qualifying ownership relationships.
Risk mitigation in this scenario is not just about screening names; it is understanding corporate relationships and hidden ownership exposure. In practice, this means businesses could unknowingly transact with a company that appears "clean" on the surface but is restricted due to its ownership structure. The result of missing sanctioned parties could include shipment delays, export licensing issues, compliance investigations, financial penalties, and reputational damage.
Why Screening Matters Regardless
In a world where compliance requirements can change overnight, readiness and adaptability are competitive advantages.
Whether the BIS pause is extended or allowed to expire, the need for stronger due diligence remains. Global networks and entities are complex and, unfortunately, some will look for ways to circumvent regulations. Importers and exporters need to be meticulous in research and record keeping to stay compliant. As stricter regulations arise, importers need to adapt their processes and tools to meet requirements and avoid penalties.
What’s Next?
As screening requirements continue to evolve, organizations will benefit from tools that support consistent due diligence, improve data visibility, and help manage compliance activities more efficiently.
Tradeflow helps organizations stay ahead by centralizing trade partner data, automating screening processes, and providing a system of record for compliance activities. In addition, Tradeflow has partnered with Kharon specifically to address ownership-based risk. Through an enhanced screening subscription, Tradeflow users can gain access to Kharon's Sanctions 50-Plus and BIS 50-Plus datasets, helping identify entities owned or controlled by sanctioned or export-restricted parties that may not appear on traditional denied party lists.
This additional visibility into hidden ownership risks can help importers enhance screening efforts and better assess potential compliance exposure.
If you have questions or need additional information about these changes and denied party screening, contact your local Tradewin representative or a member of the Tradeflow team.
