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To apply licensing requirements under the Export Control Reform Act of 2018 to subsidiaries of entities listed on the Entity List or Military End User List, and for other purposes.
Summary
This bill authorizes the Secretary of Commerce to apply export licensing requirements to subsidiaries and affiliates that are 50 percent or more owned by entities listed on the Commerce Department's Entity List or Military End User List, closing a potential loophole where shell companies could bypass export controls. Before adding an entity to either list, the Secretary must assess whether applying the Foreign Direct Product Rule would advance U.S. national security or foreign policy interests and must notify Congress within two days with the assessment. The Secretary may grant case-by-case waivers from the licensing requirement if determined to be in the national security interest, in consultation with the Secretaries of State, Defense, and Energy, and must notify Congress within two days of issuing a waiver with a detailed explanation. The bill operates under the Export Control Reform Act of 2018 and is designed to prevent restricted entities from circumventing export controls through subsidiary structures.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Rep. Self, Keith [R-TX-3] (R-TX)
3 cosponsors
- Rep. Case, Ed [D-HI-1] (D-HI)
- Rep. Moolenaar, John R. [R-MI-2] (R-MI)
- Rep. Tokuda, Jill N. [D-HI-2] (D-HI)
Actions (2)
- Jul 17, 2025 Referred to the House Committee on Foreign Affairs. · house
- Jul 17, 2025 Introduced in House
Similar bills (6)
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Text versions (1)
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Full text
IN THE HOUSE OF REPRESENTATIVES
July 17, 2025
Mr. Self (for himself and Mr. Case) introduced the following bill; which was referred to the Committee on Foreign Affairs
A BILL
To apply licensing requirements under the Export Control Reform Act of 2018 to subsidiaries of entities listed on the Entity List or Military End User List, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Suppressing Tactics of Prohibited Shells Act” or the “STOP Shells Act”.
SEC. 2. APPLICATION OF LICENSING REQUIREMENTS UNDER THE EXPORT CONTROL REFORM ACT OF 2018 TO SUBSIDIARIES OF ENTITIES LISTED ON THE ENTITY LIST OR MILITARY END USER LIST.
(a) In General.—The Secretary of Commerce is authorized to and shall apply the licensing requirement under the Export Control Reform Act of 2018 to affiliates owned 50 percent or more in aggregate, directly or indirectly, by an entity listed on the Entity List or the Military End User List.
(b) Foreign Direct Product Rule Assessment.—
(1) In general.—Prior to adding an entity to the Entity List or Military End User List, the Secretary of Commerce shall conduct an assessment to determine whether application of the Foreign Direct Product Rule to the licensing requirement for the entity would advance United States national security or foreign policy interests.
(2) Congressional notification.—Not later than 2 days after adding an entity to the Entity List, the Secretary shall provide the appropriate congressional committees with the respective Foreign Direct Product Rule Assessment for the entity.
(c) Waiver.—
(1) In general.—Subject to subsection (d), the Secretary of Commerce is authorized to exempt, on a case-by-case basis, from the requirement set forth in subsection (a) any entity determined by the Secretary of Commerce, in consultation with the Secretaries of State, Defense, and Energy, whose exemption is in the national security interest of the United States.
(2) Congressional notification.—Not later than 2 days after issuing a waiver under this subsection, the Secretary shall notify the appropriate congressional committees and include a detailed explanation of the national security or foreign policy interest that justified the waiver.
(d) Definitions.—In this section—
(1) the term “Entity List” means the list maintained by the Bureau of Industry and Security of the Department of Commerce and set forth in Supplement No. 4 to part 744 of title 15, Code of Federal Regulations, or successor regulations;
(2) the term “Military End User List” means the list maintained by the Bureau of Industry and Security of the Department of Commerce and set forth in Supplement No. 7 to part 744 of title 15, Code of Federal Regulations, or successor regulations; and
(3) the term “Foreign Direct Product Rule” has the meaning as described in part 734.9 of title 15, Code of Federal Regulations, or successor regulations. <all>
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