What the 50% ownership rule means and its status as of September 24, 2026
CURRENT STATUS: TEMPORARILY SUSPENDED
Stayed from November 10, 2025 through November 9, 2026.
WHAT THE RULE DOES
The rule states that any entity that is at least 50 percent owned by one or more entities on the Entity List will itself automatically be subject to Entity List restrictions.
Covered controls. The rule applies the ownership standard to the Entity List, the Military End-User (MEU) List, and certain Specially Designated Nationals (SDN) parties.
Aggregation and indirect ownership. Ownership interests of multiple covered owners are combined, and indirect ownership is included.
Most restrictive treatment. If multiple owners are subject to different EAR requirements, the most restrictive license requirements, license exception eligibility, and license review policy apply.
Not limited to names on a list. When the rule is operative, the Consolidated Screening List is not exhaustive because qualifying affiliates may not be separately named.
WHAT CHANGED?
The current standard excludes all entities that are not specifically included on the Entity List, MEU, or SDN lists, regardless of affiliation with listed entities.
When operative, the affiliate may be treated as covered even if not separately named; qualifying downstream indirect ownership may also be reached.
COMPLIANCE IMPACT
Screening alone may be insufficient. The September 2025 rule states that exporters, reexporters, and transferors have an affirmative duty to determine relevant ownership when the rule applies.
Unknown ownership is a red flag. If the ownership percentage cannot be determined, the party must resolve the red flag, obtain a BIS license, or identify an available license exception before proceeding.
Significant minority ties still matter. The rule identifies significant minority ownership or other significant ties, such as overlapping board membership or other indicator of control, as a diversion red flag requiring additional due diligence.
PRACTICAL ACTIONS NOW
Map ownership. Collect direct and indirect ownership information for foreign customers, consignees, end users, and other transaction parties. If percentage cannot be verified, a BIS license is required.
Document due diligence. Retain the ownership sources reviewed, calculations performed, unresolved gaps, and escalation decisions.
Escalate uncertainty. Do not rely only on a no-match screening result when ownership or control indicators are unclear.
This summary is provided for general information only, is current as of the date shown, and is not legal advice. Regulatory status may change. Contact NNR USA Trade Compliance for guidance on a specific transaction
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