Affiliates Rule Suspended as Dutch Nexperia Case Highlights Extraterritorial Impact

On 10 November 2025, the Department of Commerce's Bureau of Industry and Security (BIS) issued a final rule suspending the Affiliates Rule for one year.

The suspension follows a series of negotiations aimed at reducing trade tensions between the United States and China, which resulted in a deal on economic and trade relations. In return, China has, according to the statement from the White House, committed to suspending its expansive new export controls on rare earths and related measures for the same period.

The Affiliates Rule and Its Suspension

As mentioned in our previous alert, the Affiliates Rule, which took effect on 29 September 2025, expanded US export controls to foreign entities that are 50 per cent or more owned by entities on the Entity List, Military End-User List (MEU List), and certain Specially Designated Nationals (SDNs) covered by the Export Administration Regulations (EAR) § 744.8(a)(1). These affiliates must comply with the same licensing restrictions as their listed owners, closing a loophole that allowed circumvention through subsidiaries and complex ownership structures.

Although the Affiliates Rule is suspended through 9 November 2026, BIS has also stated that it "will continue to evaluate U.S. national security and foreign policy interests related to these non-listed foreign affiliates of listed entities." This means that BIS may still individually designate subsidiaries of Entity List or MEU List entities that threaten US interests during the suspension period. 

Further to this, the final rule will be implemented in two phases: 

• Phase I: From 10 November 2025 through 9 November 2026, BIS will temporarily suspend all changes to the EAR introduced by the Affiliates Rule.
• Phase II: The suspended changes will be reintroduced into the EAR after the one-year period expires.

The suspension period gives companies time to assess whether any of their current business relationships could be affected by the Affiliates Rule. If so, they should take appropriate steps to reduce the impact on their operations. Companies are also advised to consider the implications of the Affiliates Rule before starting a business relationship with a company owned by entities on the relevant export control list.

Ripple effects of the Affiliates Rule: The Dutch Nexperia Decision

The introduction of the Affiliates Rule was expected to have significant global impact, affecting many entities affiliated with companies on the BIS Entity List. Because the rule required a licence – often with a presumption of denial – to provide any US goods or technology subject to the EAR to such entities, it would impair such access and lead to extensive compliance scrutiny from suppliers and other business partners. 

One example of the US-Chinese trade war's extraterritorial implications is the Dutch semiconductor manufacturer Nexperia's current predicament.

In 2019, the Chinese telecommunications firm Wingtech Technology (Wingtech) acquired Nexperia. In 2024, Wingtech was added by BIS to the Entity List due to its role in China's ongoing efforts to strengthen its semiconductor industry, which according to BIS plays a significant role in military programmes. Because of Wingtech's ownership of Nexperia, the Affiliates Rule was set to impose the same export restrictions on the Dutch chipmaker. 

On 30 September 2025, the day after the Affiliates Rule took effect, the Dutch government invoked a Cold War-era law (the Goods Availability Act) to take temporary control of Nexperia. Its intention was to sever corporate ties between Nexperia and Wingtech, apparently with the aim to ensure that Nexperia would be exempt from the Affiliates Rule. The order suspended Nexperia's Chinese CEO Zhang Xuezheng's management authority for one year, transferred Wingtech's shareholder voting rights to a state-appointed trustee, and barred Nexperia from transferring assets, appointing new executives, or making strategic decisions without ministerial approval. 

Court papers released by the Dutch authorities in October, contained information that the Dutch authorities had told Nexperia it may be able to secure an exemption from the US list if there was a change in leadership. 

Although Dutch authorities could have avoided impairing Nexperia's access to US goods and technology, the order resulted in Chinese countermeasures in the form of export restrictions. The restrictions would have similar implications, as deliveries of Nexperia chips from Chinese facilities to Europe were stopped. Whilst the export restrictions were later lifted, the supply chain disruptions are reported to continue. In a company update issued on 14 November, Nexperia confirmed that its ongoing dispute with its entities in China has continued to disrupt its supply chain operations.

Because Nexperia produces chips vital to the production of several vehicle models, global vehicle manufacturers such as Volkswagen, Volvo, Stellantis and Nissan are according to news reporting suffering the indirect consequences of the US-China trade war. This demonstrates how export control measures can cascade through international supply chains, affecting industries far removed from the original targets. 

Extraterritorial Implications and National Security Responses

The Dutch order further illustrates the extraterritorial implications of export restrictions as trade measures, and how national security may give rise to countermeasures against such implications. 

Although Norway does not have a specific Good Availability Act, there are several other measures that can be put in place if required in war, crisis or due to national security concerns. For example, the Norwegian Requisition Act and the Act relating to the right to requisition ships allow the armed forces to requisition machinery, factories, labour and production services or ships if necessary. This, however, presupposes that Norway is in a war situation or threatened by war, or the independence or security of Norway is at risk.

Additionally, pursuant to Section 2-5 of the Security Act, the Norwegian Government (King in Council) has a general authority to prevent activities that present a threat to security or a not insignificant threat to national security interests. The threshold for implementing measures under this legal authority is presumably high. However, in September 2025, the King in Council took immediate ownership of the Russian vessel LLV Azurit, which had been docked in Båtsfjord since May 2024, demonstrating that such extraordinary powers can be exercised when national security interests are at stake.

Whether Norwegian authorities would take action comparable to the Dutch intervention in the Nexperia-case is uncertain. The Nexperia case demonstrates that trade wars between major powers trigger cascading consequences through global supply chains, with export controls prompting national security countermeasures that create uncertainty for businesses caught in between. Companies must anticipate continued evolution of export controls as trade policy tools, potential governmental interventions justified by national security, and heightened compliance scrutiny from multiple jurisdictions. Robust supply chain due diligence remains essential to navigate this increasingly complex geopolitical landscape.