BIS Issues 50% Rule for Entity List
On September 30, 2025, the Department of Commerce, Bureau of Industry and Security, published a rule (90 FR 47201) establishing a “50% Rule” for the Entity List and Military End User (MEU) List.
The new rule extends Entity List restrictions to other entities (e.g., subsidiaries or joint ventures) owned or controlled by entities identified on the Entity List. It also applies to entities on the Military End User (MEU) List and Specially Designated Nationals (SDNs) under EAR § 744.8.
As we noted back in July, the change is intended to make it more difficult for sanctioned entities to route shipments through related, but unlisted entities. The new rule imposes additional screening and due diligence responsibilities on exporters as restrictions also apply to unlisted parties worldwide.
The new rule was effective September 29, 2025, but with a Temporary General License (TGL) which essentially delays the rule until November 28, 2025. Comments were also requested through October 29, 2025.
Our ECScreening service has been anticipating the BIS expansion of end user controls and will be offering an ownership search function to the ECScreening tool that will be deployed before the 60 day grace period expires.
Government Shutdown Update
The Department of State, Directorate of Defense Trade Controls (DDTC) initially switched the DECCS system for electronic licensing to read only mode. DDTC has since resumed limited operations, including registration renewals and licensing.
DDTC previously stated that submissions may be reviewed if they are:
necessary to respond to emergencies involving the safety of human life or the protection of property, and those necessary for activities essential to national security, including the conduct of foreign affairs essential to national security
These submissions may be flagged for review by:
emailing DDTCCustomerService@state.gov to create a support case. The subject line of your request MUST read “Request for Emergency Submission,” and the message must include the relevant case number (if already pending with DDTC), applicant name and registration code, end-use/end-user (for licenses and agreements), and justification for needing an emergency license. DDTC will contact the requestor with guidance on how to proceed.
The Department of Commerce’s SNAP-R system for electronic licensing remains available, with a procedure available for applications “urgently required to protect U.S. national security and the safety of life and property (for example, exports in support of U.S. military operations and those of our allies and partners around the world).”
To request expedited processing of your application, please note in the “Additional Information” block that priority processing is requested during a lapse in appropriations and include a brief justification for priority processing. You should also send an email to EmergencyLicense@bis.doc.gov for both new license submissions, as well as licenses previously submitted, with a justification for priority processing, noting any nexus to urgent U.S. national security priorities or the safety of life and property.
Although rules (such as the extension of Cyprus policy and reversal of the BIS firearms licensing policy, detailed below) have taken effect since the shutdown began, the eCFR has not been updated. As their website notes:
The National Archives and Records Administration is closed to normal operations due to a lack of appropriations. eCFR.gov will not be updated until we resume normal operations.
The Federal Register continues to publish notices with a note that publication will continue, but technical support will not be provided.
ITAR Updates – Cyprus
Cyprus remains in the unique situation of being found in the ITAR § 126.1 list of proscribed destinations, but with an annually suspended status. Under 90 FR 43388 (September 9, 2025), the Republic of Cyprus’ status as a proscribed destination is suspended from October 1, 2025, through September 30, 2026 (Fiscal Year 2026).
EAR Updates – Firearms Policy
On September 30, 2025, BIS published a rule (90 FR 47170) rescinding most of the firearms policy which had been published in a 2024 Interim Final Rule. The new rule maintains 2024 revisions to firearms ECCNs while otherwise returning to the previous license requirements and review policies.
Of note, the list of High-Risk Destinations for Firearms and Related Items in Supplement No. 3 to part 742 has been removed and reserved. License applications seeking to export or reexport firearms and related items to non-government end users in these destinations had been subject to a presumption of denial.
For additional background, BIS also published a press release on this action.