BIS 50% Rule

Comply with the BIS 50% / Affiliates Rule

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) 50% rule (the “Affiliates Rule”) subjects subsidiaries that are owned 50% or more by parties on the BIS Entity List or Military End-User (MEU) List, or by Specially Designated Nationals (SDNs) designated under specific programs, to the same export restrictions and licensing requirements as their parent companies.

Master Export Controls with Kharon: Precision and Compliance

Kharon’s export control solutions equip organizations with the data and tools needed to navigate evolving export control regulations, including the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) 50% Rule (the “Affiliates Rule”). Kharon provides organizations with comprehensive insight into entities subject to export restrictions, including subsidiaries that are majority-owned by listed parties, enabling them to identify risks, mitigate compliance exposure, and demonstrate credible controls.

Powered by advanced technology, artificial intelligence, and a team of world-class multilingual experts and data scientists, Kharon is the premier platform for credibly and comprehensively helping organizations uncover hard-to-detect regulatory risks and mitigate reputational exposure.

Mapping of majority-owned subsidiaries: Identify entities owned 50% or more, whether directly, indirectly, or in the aggregate, by parties on the BIS Entity List or Military End-User (MEU) List, or by Specially Designated Nationals (SDNs) designated under specific programs, utilizing enriched data from all publicly available sources spanning jurisdictions worldwide.
Opaque ownership and other hidden risk: Kharon also assesses risks associated with minority ownership, unknown ownership, or control by parties on the BIS Entity List and MEU List and by SDNs, recognizing that diversion concerns can arise below the 50% ownership threshold, especially in sensitive industries or joint ventures.
Beyond the BIS Affiliates Rule: Kharon also provides insight into diversion pathways, military end-users and their subsidiaries, and outbound investment risks – all areas of high priority U.S. national security concern. Kharon’s intelligence enables proactive compliance by identifying entities that may pose a risk, even if they are not explicitly listed.

+Identify subsidiaries meeting the 50% threshold

+Uncover entities with minority ownership, unknown ownership, or control by listed parties

+Integrate data into existing workflows

Expand Screening to Meet Evolving BIS 50% / Affiliates Rule Requirements

Impact on supply chains

Customers, resellers, and logistics partners may suddenly fall within the scope of U.S. export controls, even if they are not named individually.

As a result, export, sales, and logistics teams need to work closely with compliance and legal functions to avoid inadvertent violations, and trade flows may shift in response to these newly restricted relationships.

Proactive compliance

U.S. export control policy — particularly efforts to limit China’s access to advanced technology — is poised to impact a wide range of sectors, including technology, aerospace, defense, and advanced manufacturing. Organizations that do not adapt to these evolving controls may face legal exposure, financial penalties, and reputational harm.

Unlock the full picture with Kharon

Powered by cutting-edge technology and a team of multilingual subject matter experts and data scientists, Kharon is uniquely positioned to help organizations identify and mitigate regulatory risks, as well as reduce reputational exposure.

Kharon ClearView and GraphCast are the premier solutions for building and maintaining credible, defensible, and sustainable controls to address the BIS Affiliates Rule, ensuring organizations remain compliant and secure.

Stay ahead of regulatory changes and safeguard your organization with Kharon.

Data

Sanctions 50-Plus

BIS 50% / Affiliates Rule

Sanctioned Securities

Outbound Investment

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