50% Rule Would Expand Entity List by Thousands, Risk Intelligence Firm Says
A Bureau of Industry and Security move to adopt a 50% rule for parties on the Entity List would expand the list to cover thousands of new subsidiaries in nearly 100 jurisdictions, risk intelligence firm Kharon said this week. While Russia and China would account for most of the subsidiaries, Kharon said the list could cover hundreds more in the EU, the U.S., the U.K., Singapore, Switzerland, Japan, Canada, Australia and India. "Almost none" of those subsidiaries ever have appeared on a government-run restricted party list, it said.
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A BIS official confirmed earlier this month that the agency is drafting a new rule to create a 50%-type rule for the Entity List (see 2506100047). The rule could extend Entity List export license requirements to companies that are majority owned by entities on the list, and BIS could issue the change as an interim final rule, which could mean an abbreviated public consultation period.
"U.S. exporters could face immediate restrictions or licensing obligations for newly covered subsidiaries, forcing updates to ownership screening and escalation protocols," Kharon said.