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, known as the “Affiliates Rule.” The Kharon platform provides organizations with comprehensive insight into entities subject to export restrictions, including subsidiaries that are majority-owned by listed parties but are not listed themselves, enabling industry (or institutions) 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 enforcement and reputational exposure.
HOW KHARON SUPPORTS COMPLIANCE WITH THE BIS 50% RULE ("AFFILIATES RULE")
+ 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.
Kharon’s export control solutions simplify compliance with evolving regulations by enabling organizations to screen for ownership, diversion risk, and end-use exposure within existing compliance workflows, helping uncover and mitigate regulatory and reputational risk that may otherwise remain hidden within complex global networks.
UNDERSTANDING THE BIS 50% / AFFILIATES RULE AND EXPORT CONTROL LANDSCAPE
The U.S. government has increasingly focused on preventing the transfer of strategic goods, software, services, and technology to countries identified as “strategic rivals and their proxies.” Restricted companies have often continued to circumvent existing export restrictions through complex corporate structures and emergent subsidiaries not covered under U.S. export controls. This regulatory blind spot has raised national security concerns, prompting efforts to expand enforcement and close loopholes.
The new Affiliates Rule aligns BIS practice with existing U.S. Treasury standards and raises the compliance bar for exporters and re-exporters, making deeper ownership analysis essential to uncover hidden risks and address diversion concerns beyond name-based screening to meet new regulatory expectations.
This measure significantly expands the scope of regulatory requirements, introducing the need for enhanced intelligence to identify exposure not only to BIS-listed entities themselves, but also to their majority-owned subsidiaries