Congressman Keith Self Introduces STOP Shells Act to Codify Trump Administration’s Closing of Export Loopholes

Congressman Keith Self (TX-03) introduced the bipartisan Subsidiary Transactions Oversight and Protection (STOP) Shells Act,legislation to strengthen U.S. export controls by ensuring subsidiaries of blacklisted companies cannot evade restrictions designed to protect national security.

"Export controls are only as strong as the loopholes they leave behind," Congressman Self said. "If a hostile foreign company is sanctioned, subsidiaries should not become legal escape hatches. The STOP Shells Act puts an end to that game. It locks the back door and sends a clear signal: America's national security cannot be outsourced, evaded, or sold off."

For too long, sanctioned entities have exploited a glaring loophole in U.S. law by moving sensitive transactions through their subsidiaries. A recent Kharonanalysis found that thousands of subsidiaries in nearly 100 jurisdictions would be subject to U.S. controls if the law required applying restrictions to firms 50% or more owned by restricted parent companies. These entities, often spread across Europe, Asia, and even the United States, have provided adversaries with backdoor access to restricted American technologies.

The STOP Shells Actreinforces and codifies the Department of Commerce's recently announced Affiliates Rule, issued by the Bureau of Industry and Security (BIS), which extends export restrictions to any subsidiary that is 50% or more owned by a blacklisted entity. By putting this standard into law, the bill ensures that enforcement is not left to shifting administrative priorities-it becomes permanent, predictable, and binding.

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