Preparation, not panic: Responding strategically to the BIS 50% rule

Regulatory change is inevitable—but a measured response is essential. In this piece, we unpack the impact of the newly effective US Bureau of Industry and Security (BIS) 50% Rule and outline how compliance teams can respond with clarity, control, and confidence. 

Effective September 30, 2025, the BIS adopted an interim final rule, “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities,” which extends export control restrictions to any entity that is directly, indirectly, or in aggregate owned 50% (or more) by one or more parties listed on the Entity List, Military End-User (MEU) List, or certain Specially Designated Nationals (SDNs) under programs listed in Section 744.8. 

This marks a strategic inflection point for compliance leaders, expanding risk exposure across complex global supply chains and requiring enhanced screening to uncover beneficial ownership.

Ownership-based restrictions introduce a new layer of regulatory complexity, especially in jurisdictions where beneficial ownership is opaque or layered – as is the case with Russia and China. These two countries are associated with roughly two thirds of the volume of BIS lists potentially in scope for this change. 

The shift could impact thousands of entities across jurisdictions and sectors – from upstream suppliers to downstream partners. 

Key takeaways:

• Far reaching: Applies to any company anywhere in the world that deals with items subject to US export controls under Export Administration Regulations (EAR). This is not just limited to high-tech goods, it covers virtually everything if they fall under EAR rules. It applies to exports, reexports, and in-country transfers, including intangible transfers like data. 
• Broader than OFAC’s 50% Rule: The Rule aggregates ownership across multiple lists and applies the most restrictive standard.
• Based on ownership: The Rule is based only on ownership, not control. 
• Automatic restrictions: Entities meeting the 50% ownership threshold are now subject to export controls, even if unnamed.
• Aggregate ownership matters: The 50% threshold applies to aggregate ownership (e.g., two listed entities each owning 25%). 
• Ownership red flags: If ownership is unclear, companies must investigate or apply for a license before proceeding.

Screening BIS content under the new rule may not always be straightforward, especially if gaps in data exist. Complete data verified by experts makes all the difference. 

Here are 2 illustrative examples that demonstrate the challenge of researching the ownership structure:

LSEG Risk Intelligence covers all subjects designated by BIS. Specifically, we have:

• Introduced three new keywords:
  • BIS-WC: Entities affiliated with subjects on the BIS Entity List or MEU List, including those with significant minority ownership (25–49.99%), unspecified ownership, or former ownership
  • BIS-50-WC: Entities owned 50% or more—directly, indirectly, or in aggregate—by listed parties
  • BISRTS-WC:  Entities or individuals in scope of the US Bureau of Industry and Security (BIS) guidance for real-time screening of cross-border payments and other transactions that are likely to be associated with exports from the United States (or re-exports or in-country transfers outside the United States)
• Introduced a new record category for "Address" which allows clients to screen or filter BIS designations that do not have company names, only addresses.

We have also refined the monitoring and editorial processes to ensure that relevant BIS list updates are captured as early in the publication process as possible.

These enhancements allow for more sophisticated screening and help identify entities that fall within the scope of the new “Affiliates” rule—even when ownership structures are complex or layered.

Key takeaways:

An overarching compliance imperative in times of change is to act strategically, not hastily. Therefore, we recommend a measured approach to help you prepare with precision: 

• Review your existing BIS screening coverage and ensure that it covers all relevant lists and content by partnering with a trusted data provider 
• Analyse the impact of the potential change on your risk policy and plan how to incorporate this into your existing screening processes. 
• Prepare to handle an extended period of operational overhead when extra records fall into scope. 

Most importantly, ensure you have access to comprehensive data and the right tools to help you manage new obligations effectively.

LSEG Risk Intelligence can help. Our 500+ analysts, operating across 158 jurisdictions, have started expanding the coverage to support compliance teams to readily navigate the changes. 

To find out more about how we can help you manage regulatory changes with clarity, control and confidence, please contact us.