Adapting Compliance Frameworks for Export Controls, Outbound Investment, and a Possible BIS 50% Rule
June 24, 2025 | 1:00 - 1:30 PM ET
Risk leaders at large financial institutions increasingly find themselves required to consider the development of new control frameworks to address export controls and outbound investment risk. Join us to learn how we’re providing capabilities to address export controls and outbound investment risk, using data and technology that produces both cost savings and insights at scale.
Since 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury have issued a series of guidance outlining red flags, setting forth compliance standards, and establishing regulatory expectations and best practices to detect and mitigate risks relating to export controls evasion, and most recently, outbound investment risk.
The October 2024 BIS guidance, for the first time, underscores significantly expanded "responsibilities" for financial institutions to address various national security matters. The guidance recommends that “FIs incorporate EAR-related due diligence into their risk management and compliance processes, both before onboarding a new customer and as part of regular risk-based due diligence thereafter.”
Additionally, a new BIS rule to apply a 50% threshold to subsidiaries of BIS-listed firms is in draft and reportedly could go into effect as early as this month. Modeled after the OFAC 50% rule, the measure would mark a significant expansion of the intelligence needed to identify export controls exposure, giving rise to considerations for screening not only certain BIS-listed entities, but their majority-owned subsidiaries as well. The draft rule reflects growing concern about evasion through subsidiaries, particularly concerning China.
In parallel to the need for increased sensitivity on export controls, the U.S. Department of the Treasury issued a final rule restricting U.S. investments in technologies linked to national security risks, particularly with respect to China. Effective January 2, 2025, the rule and associated FAQs set forth a “knowledge standard” requiring financial institutions to conduct “reasonable transactional due diligence,” including the review of publicly available and commercial databases.
Join Kharon for a deep dive into:- How Kharon is supporting financial institutions and corporations with data and tools to address export controls, the possibility of a new BIS 50% Rule, and outbound investment restrictions
- How leading firms are considering compliance framework enhancements, in response to increased regulatory expectations on certain national security matters not covered under sanctions
- What BIS 50% Rule compliance would look like, including the availability of comprehensive, precise, and timely data to help identify exposure