STOP Shells Act
The STOP Shells Act would expand U.S. export controls by extending licensing requirements under the Export Control Reform Act of 2018 (ECRA) to not only listed entities themselves, but also to their subsidiaries and affiliates that are 50% or more owned (directly or indirectly). Specifically, the Secretary of Commerce would apply ECRA licensing rules to affiliates of entities on the Entity List or Military End User (MEU) List. Before an entity is added to either list, the Secretary must assess whether applying the Foreign Direct Product Rule (FDP Rule) would serve national security or foreign policy goals, and within two days of listing must brief the relevant congressional committees with that assessment. The bill also authorizes case-by-case waivers from these licensing requirements if a national security interest justifies it, with a similar two‑day congressional notification and justification. In short, the bill tightens controls over not just restricted entities but also their key affiliates, adds a formal pre-list FDP Rule assessment, and creates a framework for narrowly tailored exemptions, all with rapid congressional notification.
Key Points
- 1Extends EAR licensing requirements to affiliates owned 50% or more, directly or indirectly, by entities on the Entity List or MEU List.
- 2Requires a Foreign Direct Product Rule assessment before adding an entity to the Entity List or MEU List to determine if applying the FDP Rule would advance U.S. national security or foreign policy interests.
- 3Mandates congressional notification within two days after an entity is added to the lists, including the FDP assessment.
- 4Authorizes case-by-case waivers from the licensing requirements if the exemption serves national security interests, with a detailed justification and congressional notification within two days of waiver issuance.
- 5Uses defined terms and existing BIS lists and rules (Entity List, MEU List, and FDP Rule as defined in 15 CFR parts and supplements).