Highlights
- The BIS 50% rule shifts export-control screening from name-based list checks to ownership-based assessments of counterparties.
- Reinstatement timing keeps shifting, but OFAC's 50 Percent Rule already creates ownership-based exposure that applies today.
- Teams can prepare now by assessing who owns their counterparties and documenting screening decisions they can later explain.
Most trade compliance teams can name their direct counterparties. Fewer can say with confidence who actually owns them.
For years, screening programs have been built around a single check: does this customer, supplier, or distributor appear on a restricted-party list? If the answer was no, the review could generally move forward. That model is starting to show its limits. A counterparty can pass a name-based screen without issue and still carry meaningful risk, not because of who they are, but because of who owns them.
That’s the shift behind a regulation trade professionals have started calling “BIS 50,” or the “50% Rule,” and it’s worth understanding now, before it fully takes effect.
Jump to ↓
What is the BIS 50% rule?
Why does the BIS 50% rule matter for trade compliance?
What are the risks of not preparing for the BIS 50% rule?
How can trade compliance teams prepare for BIS 50?
What does BIS 50% rule readiness look like?
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What is the BIS 50% rule?
BIS 50 refers to the U.S. Department of Commerce Bureau of Industry and Security’s Affiliates Rule, also known as the 50% Rule, an ownership-based expansion of export control restrictions. Under the rule, any foreign entity that is owned 50% or more, directly, indirectly, or in aggregate, by one or more parties on the BIS Entity List, Military End-User (MEU) List, or certain Specially Designated Nationals (SDN) List entries automatically inherits the same license requirements as its listed owner, even if that entity isn’t named on any list itself.
In practice, this moves the compliance question from “is this company on a list?” to “who owns this company, and does that ownership create exposure?” It’s a meaningful shift from a name-based enforcement model to an ownership-based one. It also closes a longstanding loophole, where majority-owned subsidiaries were used to route around restrictions placed on a parent company.
BIS 50’s timeline hasn’t been a straight line, and it’s still moving. The rule was published in September 2025, then suspended for one year as part of broader U.S.-China trade negotiations. Reinstatement was originally scheduled for November 2026, but in late September 2026, Treasury Secretary Scott Bessent announced the underlying US-China Busan Agreement had been extended to January 2027, a change expected to push the rule’s return back accordingly, though BIS has not yet made it official in the Federal Register. Whether it lands in January, gets extended again, or evolves further is genuinely difficult to predict. Even trade compliance experts say the U.S.-China dynamic makes it hard to call.
None of that timeline uncertainty changes the underlying obligation. BIS modeled the Affiliates Rule directly on a rule that’s already been in force for years, the Treasury Department’s OFAC 50 Percent Rule for sanctioned parties. Ownership-based exposure isn’t a hypothetical BIS-only risk waiting in the wings. Under OFAC, it’s already a live requirement today, for any organization screening counterparties connected to sanctioned entities. BIS 50 would extend that same logic to a much larger set of restricted parties. The underlying concept, and the operational muscle needed to manage it, already matters right now.
Why does the BIS 50% rule matter for trade compliance?
Whether or not BIS 50 takes effect on schedule, the direction of travel is clear. Screening programs built solely around matching names to lists are running into real gaps:
- Direct-party blind spots. The entity you screen directly may be only the visible edge of a much larger ownership network: parent companies, affiliates, subsidiaries, and joint ventures that a name-only check simply doesn’t see.
- Manual research doesn’t scale. Piecing together ownership structures by hand is slow, inconsistent from analyst to analyst, and often out of date by the time a decision gets made, particularly in jurisdictions where ownership records aren’t easy to access. It’s the same manual-research bottleneck slowing compliance work well beyond ownership screening alone.
- Complexity grows with the business. Every new market, supplier, or distributor adds more relationships to track. What’s manageable at a small scale becomes unworkable as an organization grows.
What are the risks of not preparing for the BIS 50% rule?
It helps to think about this as two layers of risk, not one.
The first layer exists today, independent of BIS 50’s status. OFAC’s 50 Percent Rule already creates ownership-based exposure for organizations screening against sanctioned parties, and that risk doesn’t pause when BIS 50 does.
The second layer is what compounds if and when BIS 50 activates. The same ownership logic would extend across the far wider Entity List and MEU List, dramatically expanding the population of affiliates and subsidiaries subject to license requirements.
Either way, two familiar operational risks follow close behind. Teams that wait until a rule is active to build a process end up scrambling, trying to retrofit ownership research into workflows that weren’t designed for it. And even a transaction that clears screening isn’t automatically defensible. If a regulator later asks why you approved it, “we checked the name” isn’t the same as “we evaluated the ownership structure and here’s what we found.”
How can trade compliance teams prepare for BIS 50?
Regardless of when, or whether, BIS 50 fully takes effect, it’s worth pressure-testing your program against a few honest questions:
- Do we know who owns or controls the counterparties we screen?
- How do we identify affiliates and associated entities in the first place?
- If asked later, can we reproduce and explain a specific decision?
- How consistently is ownership-related review handled across different business units?
- How quickly could our process adapt if the regulatory picture changes again?
If any of those questions are hard to answer with confidence, that’s the gap worth closing. Not because a specific rule is coming, but because the underlying expectation, informed by OFAC precedent, is already part of the compliance landscape.
What does BIS 50% rule readiness look like?
BIS 50’s exact timeline may well shift again. Suspensions, extensions, and further negotiation are all realistic outcomes given how tightly this rule has been tied to broader trade diplomacy. But the underlying question it represents — do you actually know who you’re doing business with — beyond the name on the page, isn’t going away, and in the case of OFAC, it’s already here.
Building that visibility into your screening process now means you’re ready whether BIS 50 arrives on schedule, later, or in a modified form, and better positioned against the ownership-based risk that already exists today. ONESOURCE Global Trade, from Thomson Reuters, including ONESOURCE Denied Party Screening, helps trade compliance teams get ahead of exactly this kind of shift, giving them a clearer, more current view of the ownership networks behind the parties they screen.
Curious if your current screening process would hold up to these five questions? Let’s talk about what ownership-based readiness looks like for your team.
