UPDATE: On October 30, U.S. President Donald Trump and PRC President Xi Jinping agreed to a one-year trade truce that, as part of its terms, suspends export controls on technology, rare earth minerals, and semiconductors, and reduces the U.S. fentanyl-related tariff on China by 10%.
The deal’s temporary pause on the application of the BIS 50% Rule on China shows that geopolitical risk and regulatory policy are in a state of constant flux. The rule had just officially gone into effect on September 29. How quickly the regulatory environment has evolved underscores the importance of up-to-date, foundational data on corporate ownership structures. Data is the only way organizations can maintain continuous compliance and operational resilience, given the unpredictable nature of these regulatory shifts.
The Bureau of Industry and Security (BIS) announced Monday the much-anticipated new rule that closes a significant loophole in restricted party lists and strengthens the U.S. export control regime overall. This announcement brings back into focus the June launch of Sayari’s BIS50 Signal Screening Solution, a first-to-market solution designed to help companies navigate the BIS 50% Rule. Since then, Sayari’s BIS50 Solution has been used by scores of Forbes Global 2000 customers around the world to uncover the thousands of majority-owned subsidiaries that traditional screening lists do not capture.
50% Ownership Now Subject to Restrictions
Similar to the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) 50 Percent Rule, the new BIS 50% rule mandates that any entity that is at least 50 percent owned by one or more entities on the Entity List or the Military End-User (MEU) List will itself automatically be subject to Entity List/MEU List restrictions. Sayari’s BIS50 Screening Solution is built on the same comprehensive ownership data and methodology, including shareholder percentages, that customers have been using to successfully identify and mitigate OFAC 50 percent risk.
The BIS Entity List is a trade restriction list of individuals, businesses, government organizations, and addresses that are subject to specific license requirements for the export, reexport, and/or transfer (in-country) of specified items. Previously, subsidiaries, parent companies, and sister companies were legally distinct from listed entities. Therefore, licensing and other obligations imposed on a listed entity did not apply to these subsidiary, parent, and sister companies. Now, with this expansion, thousands of subsidiaries are subject to violations.
Sayari empowers customers with actionable intelligence to instantly screen for the thousands of entities majority-owned by BIS Entity List and MEU List companies, ultimately helping them remain compliant.
>> Hear Akin’s Kevin Wolf, Matt Borman, and Eileen Albanese break down the BIS 50% Rule <<
Key Implications for Exporters
Because traditional screening lists do not include tens of thousands of now-restricted subsidiaries, this rule creates potential compliance vulnerabilities for companies. Organizations need to ensure they can efficiently and effectively map their customers’ upstream ownership and determine the risks they pose.
Here are some new considerations this rule poses for compliance teams:
- Ownership screening is now a mandatory check prior to shipment, and name-based checks alone are insufficient.
- If ownership cannot be determined, exporters must either resolve the red flag or apply for a license.
- The most restrictive license requirements apply when multiple listed entities are involved.
- Exporters face a strict liability standard — due diligence is not optional.
The BIS 50% rule also introduces new licensing considerations:
- Affiliates that meet the 50% threshold are treated as though they were listed entities.
- A new Temporary General License (TGL) offers limited relief for certain transactions involving non-listed affiliates in Country Groups A:5/A:6.
A Proven Solution to this Critical Compliance Change
Sayari’s BIS50 Signal Screening Solution protects organizations from potential regulatory risk resulting from the export control change leveraging extensive global corporate data and proven majority algorithms. The BIS50 Signal Module delivers:
- Immediate Coverage: File identifying thousands of entities majority-owned by BIS Entity List and MEU List companies
- Flexible Integration: Available immediately in CSV and JSON formats, with solutions for direct integration with screening systems under active development.
- Proven Methodology: Leverages our trusted majority ownership logic, in line with the OFAC 50 Percent Rule, and data on over 220 million Chinese and Russian companies
Sayari’s platform already screens entities against U.S., EU, UK, and other sanctions lists, automatically flagging sanctioned entities and their related companies. The BIS50 module extends this capability to address today’s regulatory expansion, providing shareholder relationship data with precise ownership percentages to facilitate nuanced decision-making.
As export control regulations continue to evolve, organizations increasingly require tools that can help them remain agile to the complex implications these changes bring. Sayari empowers organizations to safeguard against compliance challenges through its commitment to providing solutions that stay ahead of regulatory shifts.
For more information about Sayari’s BIS50 Signal Module, request a personalized demo.
