This article was last updated on October 17, 2025, but originally published on March 20, 2023 and first updated on October 10, 2024.
With the U.S. Department of Commerce’s Bureau of Industry and Security‘s (“BIS”) Entity List expanding rapidly—especially with Chinese entities under increased scrutiny and with the recent implementation of BIS’s 50 Percent Rule (“Affiliates Rule”)—many entities and individuals (“persons”) are asking a critical question: Is it ever possible to be removed from the Entity List?
After all, being identified on BIS’s Export Administration Regulations’ (“EAR”) Entity List—Supplement No. 4 to 15 C.F.R. Part 744—or “constructively listed” pursuant to the Affiliates Rule as a result of ownership, carries serious consequences. Such persons are subject to stringent licensing requirements for the export, reexport, or transfer (in-country) of any items (“commodities, software, and technology) subject to the EAR. This includes, in most instances, even EAR99 items (e.g., a U.S. made pencil) and those captured by the Foreign Direct Product (“FDP”) Rules.
Take, for example, BIS’s addition of 32 entities to the Entity List on September 16, 2025 in various jurisdictions, with a majority of those being located in China. All these additions have a licensing requirement for all items subject to the EAR, with little to no license exceptions available, and a general presumption of denial for any BIS license requests. Pursuant to the BIS Affiliates Rule, affiliates of these listed entities may be impacted as well based on their ownership stakes (e.g., subsidiaries).
Unless a listed party has no need to access U.S.-origin items, including many foreign-made items controlled based on their U.S.-nexus, remaining on the Entity List is not a viable long-term option. Fortunately, BIS does provide an administrative mechanism for removal.
This article offers a practitioner-oriented overview of that process, including key consideration and strategic insights.
In the latest update to this article in consideration of BIS’s September 29, 2025 implementation of its Affiliates Rule, we also cover the expansion of that process, which now includes modification requests to listed person’s entries on the Entity List for the exclusion of affiliated entities otherwise capture by the Rule due to their ownership stakes. We also now take into account another earlier expansion of the Entity List involving additions to the List of addresses that present a high diversion risk for owners or operators of such addresses interested in their removal.
Step 1—Investigate Why the Entity List Addition Was Made
Before pursuing removal from the Entity List, it’s essential to first determine why the listed individual, entity, or address was added. Pursuant to § 744.11 of the EAR, BIS may add a person or even just an address to the Entity List when there is reason to believe—based on specific and articulable facts—that the person or address has been involved, is involved, or poses a significant risk of being or becoming involved in activities contrary to U.S. national security or foreign policy interests.
The End-User Review Committee (ERC), which is composed of representatives from the departments of Commerce, State, Defense, Energy, and Treasury (when appropriate), makes decisions regarding additions to, removals from, or other modifications to the Entity List, and BIS is tasked with implementing them.
Each Entity List entry includes a citation to the Federal Register rule that initially added or later modified that listing. For example, the corresponding Federal Register rule for “Inspur Group Co., Ltd.” initial March 6, 2023 addition to the Entity List states that it was added, “…for acquiring and attempting to acquire U.S.-origin items in support of the China’s military modernization efforts…contrary to U.S. national security and foreign policy efforts.” While such Federal Register rules rarely offer much detail, where there is at least such a scintilla of allegations they can provide an important starting point for counsel representing the listed party to rely on in investigating and (hopefully) pinpointing with more accuracy the U.S. government’s reasons for its listing decision.
Although a listed party may want to initiate the removal process right away—or modification of an entry(s) in the case of unlisted affiliates—it is important to at least have a rudimentary understanding of why the underlying listing was made in the first place as a key part of strategizing how to best approach the removal or modification request with the ERC. This step should also be considered for unlisted entities otherwise captured by the Affiliates Rules because of their respective ownership stakes, seeking modification to relevant Entity List entries (i.e., their owner(s)), because it may impact the overall modification request strategy. For example, the reasons for the underlying listed entity’s inclusion may speak as to the U.S. government’s same or similar concerns about its affiliates.
Step 2—Initiating the Removal Process with the End-User Review Committee
When a party seeks formal removal from (or modification to) the Entity List, they’ll need to initiate their request in writing to the ERC pursuant to § 744.16(e) of the EAR, while the process is essentially administered by BIS. Either simultaneously or shortly thereafter, counsel should also consider submitting a request for the administrative record underlying the ERC’s decision to add the listed party to the Entity List. In certain circumstances, counsel may want to obtain such a record prior to initiating the removal request as part of their overall investigation noted in Step 1. In general, requests for the administrative record to BIS are made as a Freedom of Information Act (“FOIA”) Request (or otherwise treated as such by the agency).
The formal written request to the ERC, including any follow-up submissions, will need to provide well-formulated reasons as to why the party should be removed from the Entity List, or a respective entry modified in the case of unlisted affiliates. These arguments generally fall into one or more of the three categories, often depending on the findings from Step 1. For modifications related to unlisted affiliates, strategy will generally be limited to categories 2 and/or 3. They are as follows:
- Challenging the factual or legal basis for the listing. A petitioner may argue that the reasons for the listing were materially incorrect or legally insufficient—though this is a high bar. Courts apply a rational basis standard of review, meaning the petitioner must show that “…there is no rational relationship between [the Entity List decision] and some legitimate governmental purpose.” See, Federal Express v. U.S. Dept. of Commerce, 486 F. Supp. 3d 69, 76 (D.D.C. 2020). Therefore, such arguments must be exceptionally compelling.
- Demonstrating changed circumstances. The petitioner may show that the circumstances that originally resulted in the ERC’s listing decision are no longer applicable—i.e., all the original stated risks to U.S. foreign policy and national security—either because of events beyond the listed person’s control (e.g., death of the listed individual or a change in the relevant foreign government), or the concerns for its initial listing have indeed been remedied and unlikely to reoccur (e.g., personnel changes and/or divestment). Similar changed circumstances could be asserted for modification requests (e.g., divestment activity that already occurred).
- Taking a cooperative and corrective stance. Another viable path is to indicate a willingness to cooperate with the U.S. government in addressing the underlying concerns that led to a listing or that are otherwise necessary for an entry’s modification, by implementing relevant corrective measures. This includes adopting new compliance controls, revising corporate governance structures, or divestment.
One of the greatest challenges in filing a removal petition is that the petitioner often lacks access to the full information the government relied upon in making the initial listing decision. The administrative record, when eventually received, can take considerable time and is often heavily redacted on national security or law enforcement grounds.
Accordingly, petitioners should view the process as iterative: if and when the administrative record is obtained, counsel in coordination with the client may need to refine or supplement arguments in consideration of the three foregoing categories to respond more directly to the government’s apparent rationale and demonstrate that continued inclusion on the Entity List is no longer warranted.
Step 3—Wait for a Decision
The Entity List removal/modification process can be lengthy. It often involves extended correspondence with the government as ERC evaluates the petition, especially when the petitioner receives the administrative record and/or any requests for information from the government. The ERC conducts its review and arrives at a decision in accordance with established procedures set forth in Supplement No. 5 to Part 744, and there isn’t much in there to assist petitioning parties and their counsel in discerning what the ERC may be looking for in a removal petition.
Although the ERC is chaired by Commerce, and any decisions to remove/modify must be by a unanimous vote of all representatives. Once a decision is reached, BIS communicates the outcome to the petitioner in writing, and will also issue a formal notice published in the Federal Register.
Step 4—Appealing a Denial Decision
Once the ERC issues a decision denying removal from or modification to the Entity List, that decision constitutes a final agency action. This means you can’t administratively appeal it further within the ERC, BIS, or any other Federal government agency for reconsideration. See, Supplement No. 5 to Part 744 and § 756.2 of the EAR.
Because administrative remedies are exhausted upon denial, the only remaining avenue for relief is judicial review in federal court. However, unlike judicial challenges related to additions of, or denials of removal petitions by, persons on the Specially Designated Nationals and Blocked Persons (“SDN”) List administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), there little precedent addressing similar challenges to Entity List determinations. See e.g., Changji Esquel Textile Co. v. Raimondo, 40 F. 4th 716 (D.C. Cir. 2022).
Furthermore, following enactment of the Export Control Reform Act of 2018 (“ECRA”)—which is the statutory authority for the EAR—judicial review of Commerce’s actions related to the Entity List, including removal/modification determinations, would not be subject to the judicial review provisions of the Administrative Procedure Act (“APA”). See, Id.; 50 U.S.C. § 4821(a). This means a petitioner cannot rely on the traditional APA standard of review for “arbitrary and capricious” agency action, which is often invoked in OFAC-related litigation.
That said, this statutory limitation does not completely foreclose judicial review. For example, there may be legitimate claims under the Due Process Clause of the Fifth Amendment of the U.S. Constitution, or that any ECRA or EAR violations were ultra vires (i.e., beyond the agency’s legal authority). Nevertheless, without the APA the prospect of a successful judicial challenge to a denial may appear less promising, especially since courts are historically very deferential in their review of agency actions when matters of foreign policy and national security are concerned. Fed Express Corp. v. U.S. Dept. of Commerce, 39 F.4th 756, (D.C. Cir. 2022). However, the end of Chevron Deference since the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo may ultimately impact such deference in future judicial challenges involving Entity List removal/modification denials.
The author of this blog post is Kian Meshkat, an attorney specializing in U.S. economic sanctions and export controls matters. If you have any questions please contact him at meshkat@meshkatlaw.com.
