ADVERSARIES Act Targets Export-Control Gaps Used by Chinese Firms

Representatives Max Miller (R-OH) and Jefferson Shreve (R-IN) introduced the Addressing Dangerous Vulnerabilities in Exports and Research to Strategic Adversaries, Regimes, and Industrial Entities of Security Concern Act (ADVERSARIES Act), legislation aimed at closing what lawmakers describe as a critical loophole in U.S. export-control authorities that has enabled China-linked firms to evade scrutiny.

A persistent challenge has been that firms linked to blacklisted entities often reorganize via subsidiaries or affiliates to evade restrictions — a structural loophole critics argue undermines the effectiveness of export controls.

Miller said the bill would ensure the U.S. government can “act decisively to protect our interests,” arguing that the Chinese Communist Party has used corporate structures to obscure ownership and access sensitive U.S. technology. Shreve called the bill “a commonsense step to strengthen our national security,” emphasizing risks to U.S. technological competitiveness.

The measure would revise the definition of “foreign person” under the Export Control Reform Act to incorporate companies on Section 1260H Chinese military-company lists, the Military End User List, the Entity List, and any subsidiary or affiliate in which such entities hold a 50 percent or greater stake.

The change is intended to give the Commerce Department’s Bureau of Industry and Security broader authority to impose licensing requirements and add companies to the Entity List. In effect, the Act would institutionalize BIS’s recent “50% Affiliates Rule” by embedding the relevant standard into permanent statutory language — reducing the risk that future administrations roll back enforcement or interpret loopholes differently.

Lawmakers have increasingly pressed BIS to tighten controls on Chinese corporate networks. Earlier this year, the Congressional-Executive Commission on China warned that “complex ownership webs continue to impede effective export-control enforcement,” and GAO has previously identified gaps in U.S. screening of parent-subsidiary relationships involving restricted entities.

Supporters say the ADVERSARIES Act would align ECRA definitions with current enforcement realities and reduce opportunities for circumvention.

In late October, BIS agreed to pause enforcement of its “50% Affiliates Rule” for one year (through November 2026) as part of broader negotiation with China over rare-earth materials.

This political interplay between national-security regulation and trade diplomacy is driving calls for a a statutory fix.

Bill text here. 

Bill summary here.