The STOP Shells Act tightens U.S. export controls by requiring Commerce Department licensing for foreign subsidiaries owned 50 percent or more by companies already on the government's Entity List or Military End User List—essentially closing a loophole that allows sanctioned entities to conduct business through affiliated companies. Before adding any company to these restricted lists, the Commerce Secretary must assess whether the "Foreign Direct Product Rule" (which restricts products made abroad using U.S. technology) should apply to protect national security. The Secretary must notify Congress within two days of adding entities to the lists and must provide the same notification within two days of granting case-by-case exemptions, which are allowed only when approved by the Secretaries of Commerce, State, Defense, and Energy and deemed in the national interest. The bill aims to prevent bad actors from circumventing U.S. sanctions through corporate subsidiaries and gives Congress oversight through rapid notification requirements. No specific funding or implementation timeline is mentioned beyond the two-day notification deadlines.
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