Core Points - The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has introduced a new rule called the "Affiliates Rule," which establishes a 50% ownership standard for export control regulations [1] - The rule mandates that any foreign entity that is directly or indirectly owned 50% or more by entities on specific lists will face the same export control restrictions as its owners [1] - A Temporary General License (TGL) has been issued to mitigate the impact on existing transactions, valid for 60 days [3] Group 1: Affiliates Rule - The Affiliates Rule applies to entities on the Entity List, Military End-User List, and sanctioned parties as per EAR regulations [1] - Exports, re-exports, and domestic transfers to affected affiliates will be subject to the strictest licensing requirements faced by their owners [1] Group 2: Due Diligence Requirements - Exporters, re-exporters, and transferors are now required to actively determine the ownership structure of their trading partners [2] - If ownership information is unclear, a license application is necessary to ensure compliance [4] Group 3: Temporary General License (TGL) - The TGL allows for specific transactions to continue for 60 days, easing the transition to the new regulations [3] - The new regulations shift from targeting "specifically named entities" to a broader "penetrative regulation" approach, increasing compliance burdens for global companies [3] Group 4: Compliance Obligations - Companies must conduct thorough ownership structure reviews of partners, especially in multinational supply chains [3] - Additional due diligence is required for entities with less than 50% ownership by listed entities to prevent restricted items from reaching them [4]