[Federal Register Volume 72, Number 202 (Friday, October 19, 2007)]
[Rules and Regulations]
[Pages 59164-59166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-20642]



[[Page 59164]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 070817469-7596-01]
RIN 0694-AE11


Approved End-Users and Respective Eligible Items for the People's 
Republic of China (PRC) Under Authorization Validated End-User (VEU)

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) 
amends the Export Administration Regulations (EAR) to list names of 
end-users in the People's Republic of China (PRC) approved to receive 
exports, reexports and transfers of certain items under Authorization 
Validated End-User (VEU). In a final rule published in the Federal 
Register, BIS revised and clarified U.S. export control policy for the 
PRC, establishing Authorization VEU and identifying the PRC as the 
initial eligible destination. This rule identifies five specific 
validated end-users.

DATES: This rule is effective November 19, 2007. Although there is no 
formal comment period, public comments on this regulation are welcome 
on a continuing basis.

ADDRESSES: You may submit comments, identified by RIN 0694-AE11 (VEU), 
by any of the following methods:
    E-mail: [email protected] Include ``RIN 0694-AE11 (VEU)'' 
in the subject line of the message.
    Fax: (202) 482-3355. Please alert the Regulatory Policy Division, 
by calling (202) 482-2440, if you are faxing comments.
    Mail or Hand Delivery/Courier: Sheila Quarterman, U.S. Department 
of Commerce, Bureau of Industry and Security, Regulatory Policy 
Division, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, 
DC 20230, Attn: RIN 0694-AE11 (VEU).
    Send comments regarding the collection of information associated 
with this rule, including suggestions for reducing the burden, to David 
Rostker, Office of Management and Budget (OMB), by e-mail to [email protected], or by fax to (202) 395-7285; and to the Regulatory 
Policy Division, Bureau of Industry and Security, Department of 
Commerce, P.O. Box 273, Washington, DC 20044. Comments on this 
collection of information should be submitted separately from comments 
on the final rule (i.e. RIN 0694-AE11 (VEU))--all comments on the 
latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT: Michael Rithmire, Chairman, End-User 
Review Committee, Bureau of Industry and Security, Department of 
Commerce, P.O. Box 273, Washington, DC 20044; by telephone (202) 482-
6105; or by e-mail to [email protected].

SUPPLEMENTARY INFORMATION:

Background

Authorization Validated End-User (VEU): Initial List of Approved End-
Users, Eligible Items and Destinations

    Consistent with U.S. Government policy to facilitate trade for 
civilian end-uses in the PRC, BIS amended the EAR in a final rule on 
June 19, 2007 (72 FR 33646) by creating a new authorization for 
``validated end-users'' (VEUs) located in eligible destinations to 
which eligible items (commodities, software and technology, except 
those controlled for missile technology or crime control reasons) may 
be exported, reexported or transferred without a license, in 
conformance with Section 748.15 of the EAR. As established in the June 
19 rule, the PRC is the initial destination eligible for exports, 
reexports and transfers under Authorization VEU.
    Authorization VEU is a mechanism to facilitate increased high-
technology exports to companies in the PRC that have a record of using 
such items responsibly. VEUs will be able to obtain eligible items that 
are on the Commerce Control List without having to wait for their 
suppliers to obtain export licenses from BIS. A wide range of items are 
eligible for Authorization VEU. In addition, Authorization VEU may be 
used by foreign reexporters, and does not have an expiration date.
    This final rule amends Supplement No. 7 to Part 748 of the EAR to 
identify five companies with 14 eligible facilities in the PRC as VEUs 
and to identify the items that may be exported, reexported, or 
transferred to them. The VEUs listed in Supplement No. 7 to Part 748 
were reviewed and approved by the U.S. Government in accordance with 
the provisions of Section 748.15 and Supplement Nos. 8 and 9 to Part 
748 of the EAR.
    Approving these five end-users as VEUs is expected to facilitate 
exports to civilian end-users in the PRC. After analyzing historical 
licensing data, BIS anticipates that approval of these five companies 
as VEUs should significantly reduce the value of trade that requires a 
license for export or reexport to the PRC. Approximately $54 million of 
items described as ``eligible items'' in this notice were licensed for 
export to these five end-users in 2006. This $54 million represents 
about 18% of all licensed exports to the PRC in 2006. Approval of these 
companies as VEUs also represents a significant savings of time for 
suppliers and end-users. Authorization VEU will eliminate the burden on 
exporters and reexporters of preparing license applications and on BIS 
for processing such applications, as exports and reexports will be made 
without licenses. This savings will enable exporters and reexporters to 
supply the VEUs much more quickly, thus enhancing the competitiveness 
of the exporters, reexporters, and end-users in the PRC.
    To ensure appropriate facilitation of exports and reexports, on-
site reviews of the VEUs may be warranted pursuant to paragraph 
748.15(a)(2) and Section 7(iv) of Supplement No. 8 to Part 748 of the 
EAR. If such reviews are warranted, BIS will inform the PRC Ministry of 
Commerce.
    Since August 21, 2001, the Export Administration Act has been in 
lapse and the President, through Executive Order 13222 of August 17, 
2001 (3 CFR, 2001 Comp, p. 783 (2002)), as extended most recently by 
the Notice of August 15, 2007 (72 FR 46137, August 16, 2007), has 
continued the EAR in effect under the International Emergency Economic 
Powers Act. BIS continues to carry out the provisions of the Act, as 
appropriate and to the extent permitted by law, pursuant to Executive 
Order 13222.

Rulemaking

    1. This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor be subject to a penalty for failure to 
comply with a collection of information, subject to the requirements of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation involves 
collections previously approved by the OMB under control number 0694-
0088, ``Multi-Purpose Application'', which carries a burden hour 
estimate of 58 minutes to prepare and submit form BIS-748; and for 
recordkeeping, reporting and review requirements in connection with 
Authorization Validated End-User, which carries an estimated burden of 
30

[[Page 59165]]

minutes per submission. This rule is expected to result in a decrease 
in license applications submitted to BIS. Total burden hours associated 
with the Paperwork Reduction Act and Office and Management and Budget 
control number 0694-0088 are not expected to increase significantly as 
a result of this rule.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act requiring 
notice of proposed rulemaking, the opportunity for public 
participation, and a delay in effective date, are inapplicable because 
this regulation involves a military and foreign affairs function of the 
United States (5 U.S.C. 553(a)(1)). Further, no other law requires that 
a notice of proposed rulemaking and an opportunity for public comment 
be given for this final rule. Because a notice of proposed rulemaking 
and an opportunity for public comment are not required to be given for 
this rule under the Administrative Procedure Act or by any other law, 
the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.) are not applicable. Therefore, this regulation is issued 
in final form. Although there is no formal comment period, public 
comments on this regulation are welcome on a continuing basis. Comments 
should be submitted to Sheila Quarterman, Regulatory Policy Division, 
Bureau of Industry and Security, Department of Commerce, P.O. Box 273, 
Washington, DC 20044.

List of Subjects in 15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

0
Accordingly, part 748 of the Export Administration Regulations (15 CFR 
Parts 730-799) is amended as follows:

PART 748--[AMENDED]

0
1. The authority citation for 15 CFR Part 748 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 3, 2006, 71 FR 
44551 (August 7, 2006); Notice of August 15, 2007, 72 FR 46137 
(August 16, 2007).


0
2. Supplement No. 7 to Part 748 is added to read as follows:

Supplement No. 7 to Part 748--Authorization Validated End-User (VEU): 
List of Validated End-Users, Respective Items Eligible for Export, 
Reexport and Transfer, and Eligible Destinations

------------------------------------------------------------------------
                               Eligible Items (By
     Validated End-User               ECCN)         Eligible Destination
------------------------------------------------------------------------
Applied Materials China, Ltd  2B230; 2B350.g.3;     Applied Materials
                               3B001.b.1;            China, Ltd.--
                               3B001.c.2; 3B001.e;   Shanghai Depot c/o
                               3B001.f.2; 3C001;     Shanghai Applied
                               3C002.                Materials Technical
                                                     Service Center, 368
                                                     Zhang Jiang Road,
                                                     Pudong Zhangjiang
                                                     Hi-Tech Park,
                                                     Shanghai, China
                                                     201203.
                                                    Applied Materials
                                                     China, Ltd.--
                                                     Beijing Depot c/o
                                                     Beijing Applied
                                                     Materials Technical
                                                     Service Center,
                                                     Bldg. 9, Area A,
                                                     No. 1 North Di
                                                     Sheng Street, BDA,
                                                     Beijing, China
                                                     100176.
                                                    Applied Materials
                                                     China, Ltd.--Wuxi
                                                     Depot c/o Sinotrans
                                                     Jiangsu Group
                                                     Fuchang Co., J5 A-B
                                                     Wuxi Export
                                                     Processing Zone 287
                                                     Gaolang Road, Wuxi
                                                     New District, Wuxi
                                                     Jiangsu China
                                                     214028.
BHA Aerocomposite Parts Co.,  1A002.a; 1B001.f;     BHA Aerocomposite
 Ltd.                          1C010.b; 1C010.e;     Parts Co., Ltd.,
                               1D001 (limited to     No. 4-388 Heibei
                               ``software''          Road, Tanggu
                               specially designed    Tianjin, China.
                               or modified for the
                               ``development'',
                               ``production'' or
                               ``use'' of
                               equipment
                               controlled by
                               1B001.f); 1E001
                               (limited to
                               ``technology''
                               according to the
                               General Technology
                               Note for the
                               ``development'' or
                               ``production'' of
                               items controlled by
                               1A002.a, 1B001.f,
                               1C010.b & .e, and
                               2B001.a);
                               2B001.e.1.a; 2D001
                               (limited to
                               ``software,'' other
                               than that
                               controlled by
                               2D002, specially
                               designed or
                               modified for the
                               ``development'',
                               ``production'' or
                               ``use'' of
                               equipment
                               controlled by
                               2B001.e.1.a); 2D002
                               (limited to
                               ``software'' for
                               electronic devices,
                               even when residing
                               in an electronic
                               device or system,
                               enabling such
                               devices or systems
                               to function as a
                               ``numerical
                               control'' unit,
                               capable of
                               coordinating
                               simultaneously more
                               than 4 axes for
                               ``contouring
                               control''
                               controlled by
                               2B001.e.1.a).
National Semiconductor        3A001.a.5.a.1;        National
 Corporation.                  3A001.a.5.a.2;        Semiconductor Hong
                               3A001.a.5.a.3;        Kong Limited,
                               3A001.a.5.a.4.        Beijing
                                                     Representative
                                                     Office, Room 604,
                                                     CN Resources
                                                     Building, No. 8
                                                     Jianggumenbei A,
                                                     Beijing, China
                                                     100005.
                                                    National
                                                     Semiconductor Hong
                                                     Kong Limited,
                                                     Shanghai
                                                     Representative
                                                     Office, Room 903-
                                                     905 Central Plaza,
                                                     No. 227 Huangpi
                                                     Road, North
                                                     Shanghai, China
                                                     200003.

[[Page 59166]]

 
                                                    National
                                                     Semiconductor Hong
                                                     Kong Limited,
                                                     Shenzhen
                                                     Representative
                                                     Office, Room 1709
                                                     Di Wang Commercial
                                                     Centre, Shung Hing
                                                     Square, 5002 Shenna
                                                     Road East,
                                                     Shenzhen, China
                                                     518008.
Semiconductor Manufacturing   1C350.c.3;            Semiconductor
 International Corporation.    1C350.d.7;            Manufacturing
                               2B006.b.1; 2B230;     International
                               2B350.d.2;            (Shanghai)
                               2B350.g.3;            Corporation, 18
                               2B350.i.4; 3B001.a;   Zhang Jiang Rd.,
                               3B001.b; 3B001.c;     Pudong New Area,
                               3B001.d; 3B001.e;     Shanghai, China
                               3B001.f; 3C001;       201203.
                               3C002; 3C004;        Semiconductor
                               5B002; 5E002          Manufacturing
                               (limited to           International
                               ``technology''        (Tianjin)
                               according to the      Corporation, 19
                               General Technology    Xing Hua Avenue, Xi
                               Note for the          Qing Economic
                               ``production'' of     Development Area,
                               integrated circuits   Tianjin, China
                               controlled by ECCN    300385.
                               5A002 that has been  Semiconductor
                               successfully          Manufacturing
                               reviewed under the    International
                               encryption review     (Beijing)
                               process specified     Corporation, No. 18
                               in Sec.  Sec.         Wen Chang Road,
                               740.17.b.2 or         Beijing Economic-
                               740.17.b.3 and        Technological
                               742.15 of the EAR).   Development Area,
                                                     Beijing, China
                                                     100176.
                                                    Semiconductor
                                                     Manufacturing
                                                     International
                                                     (Chengdu)
                                                     Corporation,
                                                     Assembly and
                                                     Testing (AT2)
                                                     Facility, 8-8 Kexin
                                                     Road, Export
                                                     Processing Zone
                                                     (West Area),
                                                     Chengdu, China
                                                     611731.
                                                    Cension
                                                     Semiconductor
                                                     Manufacturing
                                                     Corporation, 3/F, 8-
                                                     1 Kexin Road,
                                                     Export Processing
                                                     Zone (West Area),
                                                     Chengdu, China
                                                     611731.
Shanghai Hua Hong NEC         1C350.c.3;            Headquarters and
 Electronics Company, Ltd.     1C350.d.7; 2B230;     Fab. 1 of HHNEC,
                               2B350.d.2 2B350.g.3   No. 1188 Chuan Qiao
                               2B350.i.4;            Rd., Pu Dong,
                               3B001.c.2; 3C002;     Shanghai, China
                               3C004.                201206.
                                                    Fab. 2 of HHNEC, No.
                                                     668 Guo Shou Jing
                                                     Rd., Zhang Jiang
                                                     High Tech Park, Pu
                                                     Dong, Shanghai,
                                                     China 201203.
------------------------------------------------------------------------


    Dated: October 16, 2007.
Christopher A. Padilla,
Assistant Secretary for Export Administration.
 [FR Doc. E7-20642 Filed 10-18-07; 8:45 am]
BILLING CODE 3510-33-P