BIS Suspends Affiliates Rule, China Pauses Rare Earth Export Controls
Effective November 10, 2025, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") formally suspended enforcement of its newly announced Affiliates Rule for one year following a U.S.–China framework trade agreement, with China reciprocating by suspending certain export controls on rare earth metals for the same period.
Suspension of the U.S. "Affiliates Rule"
As discussed in our October Alert, "United States Expands Reach of Export Controls Entity List," the BIS Affiliates Rule, issued as an Interim Final Rule ("IFR") on September 29, 2025, expanded the Entity List and Military End User ("MEU") List restrictions to include any affiliate that is 50% or more owned by a listed person. Under this rule, export restrictions automatically applied to any majority-owned affiliate of a listed entity, and companies were required to determine ownership percentages or obtain an export license from BIS.
The suspension of the Affiliates Rule took effect immediately through a Final Rule issued November 10, 2025, which pauses the IFR for one year, expiring on November 9, 2026 (unless extended). While the Affiliates Rule applied to listed entities anywhere in the world, China, in which a large number of listed entities are located, was expected to bear the most significant impact.
Suspension of Chinese Critical Mineral Restrictions
In exchange for BIS's suspension of the Affiliates Rule and to ease bilateral trade tensions, the Chinese government has temporarily suspended several rare earth mineral export control measures. Effective November 7, 2025, the Chinese Ministry of Commerce ("MOFCOM") and the General Administration of Customs Announcements 55, 56, 57, and 58, as well as MOFCOM Announcements 61 and 62, have been suspended until November 10, 2026 (unless extended). These policies included export restrictions of certain rare earth minerals, lithium battery materials, and rare earth equipment. As discussed in our prior October Commentary, "China Imposes Extraterritorial Export Control Measures Over Rare Earth Items," these export control measures, in particular MOFCOM's Announcement 61, established China's extraterritorial export controls on these materials and a rule that extended restrictions to affiliates of designated entities, similar in effect to BIS's Affiliates Rule.
These reciprocal actions follow recent trade talks between President Trump and President Xi in South Korea. During the suspension period, BIS will continue to evaluate U.S. interests related to non-listed foreign affiliates of listed entities (and retains its ability to add additional entities by name to restricted lists).
Companies should closely monitor further developments and maintain strong compliance programs to address changing export control requirements as U.S.–China trade negotiations continue.
