Document ID: BIS-2013-0020-0001
Agency: bis
Document Type: Rule
Title: Validated End User Authorizations: People's Republic of China; Additions and Revisions to the List
Posted Date: 2013-09-06T04:00Z

[Federal Register Volume 78, Number 173 (Friday, September 6, 2013)]
[Rules and Regulations]
[Pages 54752-54755]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21579]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 130826763-3763-01]
RIN 0694-AF95

Addition and Revision to the List of Validated End-Users in the 
People's Republic of China

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) to add an end-user in the 
People's Republic of China (PRC) to the list of Validated End-Users 
(VEUs). Specifically, BIS amends Supplement

[[Page 54753]]

No. 7 to part 748 of the EAR to add Intel Semiconductor (Dalian) Ltd. 
(Intel Dalian) as a VEU. With this rule, exports, reexports and 
transfers (in-country) of certain items to two Intel Dalian eligible 
destinations are now authorized under Authorization VEU. BIS also 
amends Supplement No. 7 to part 748 to change the name of an existing 
VEU in the PRC, from Lam Research Corporation to Lam Research Service 
Co., Ltd.

DATES: This rule is effective September 6, 2013.

FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chair, End-User 
Review Committee, Bureau of Industry and Security, U.S. Department of 
Commerce, 14th Street & Pennsylvania Avenue NW., Washington, DC 20230; 
by telephone: (202) 482-5991, fax: (202) 482-3991, or email: 
ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

Authorization Validated End-User

    Validated End-Users (VEUs) are designated entities located in 
eligible destinations to which eligible items may be exported, 
reexported, or transferred (in-country) under a general authorization 
instead of a license. The names of the VEUs, as well as the dates they 
were so designated, and their respective eligible destinations and 
items are identified in Supplement No. 7 to part 748 of the Export 
Administration Regulations (EAR). Under the terms described in that 
supplement, VEUs may obtain eligible items without an export license 
from the Bureau of Industry and Security (BIS), in conformity with 
Section 748.15 of the EAR. Eligible items vary between VEUs, but may 
include commodities, software, and technology, except those controlled 
for missile technology or crime control reasons on the Commerce Control 
List (CCL) (part 774 of the EAR).
    VEUs are 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. The End-User Review Committee (ERC), composed of 
representatives from the Departments of State, Defense, Energy, and 
Commerce, and other agencies, as appropriate, is responsible for 
administering the VEU program. BIS amended the Export Administration 
Regulations (EAR) in a final rule published on June 19, 2007 (72 FR 
33646) to create Authorization VEU.

Addition to the List of Validated End-User Authorizations in the 
People's Republic of China (PRC)

Addition of Intel Semiconductor (Dalian) Ltd. to the List of Validated 
End-Users in the PRC and Its ``Eligible Destinations'' and ``Eligible 
Items (By ECCN)''

    This final rule amends Supplement No. 7 to part 748 of the EAR to 
add Intel Dalian as a VEU, and to identify its eligible destinations 
and the items that may be exported, reexported or transferred (in-
country) to Intel Dalian under Authorization VEU, effective the date of 
this rule. The names and addresses of this newly-appointed VEU and its 
eligible destinations are as follows:

Validated End-User

Intel Semiconductor (Dalian) Ltd.

Eligible Destinations

Intel Semiconductor (Dalian) Ltd., No. 109 Huai He Road East, Dalian 
Economic and Technology Development Area, Dalian, Liao Ning 
Province, 116600, China.
Intel Semiconductor (Dalian) Ltd., c/o Dalian Kintetsu Logistics 
Co., Ltd, Dayaowan Bonded Port No. 6 Road W4 Unit A1, Dalian 
Economic and Technology Development Area, Dalian, Liao Ning 
Province, 116601, China.

Eligible Items (by ECCN) That May Be Exported, Reexported or 
Transferred (In-Country) to the Eligible Destination Identified Under 
Intel Semiconductor (Dalian) Ltd.'s Validated End-User Authorization

    For Intel Semiconductor (Dalian) Ltd., Export Control 
Classification Numbers (ECCNs) 1A004, 1C006.d, 2A226, 2A292, 2B006.b, 
2B230, 2B231, 2B350, 3A233.a, 3B001 (except for multilayer masks with a 
phase shift layer designed to produce ``space qualified'' semiconductor 
devices), 3C002, 3E002 (excluding development and production technology 
specific to digital signal processors and digital array processors and 
further limited to ``technology'' based on the international technology 
roadmap for semiconductors (ITRS)), and 4E001(limited to technology for 
computer products or components not exceeding an adjusted peak 
performance (APP) level of 12.0 weighted teraflops).
    For Intel Semiconductor (Dalian) Ltd., c/o Dalian Kintetsu 
Logistics Co., Ltd., ECCNs 1A004, 1C006.d, 2A226, 2A292, 2B006.b, 
2B230, 2B231, 2B350, 3A233.a, 3B001 (except for multilayer masks with a 
phase shift layer designed to produce ``space qualified'' semiconductor 
devices), and 3C002.

Technical Change for Existing VEU in the PRC

Change of Name of VEU Lam Research Corporation in the PRC

    This final rule also amends Supplement No. 7 to part 748 of the EAR 
to change the name of an existing VEU, Lam Research Corporation, to Lam 
Research Service Co., Ltd.. This name change is made to list the name 
of the U.S. company's Chinese subsidiary because that is the actual 
name of the authorized VEU.
    Current Validated End-User Name: Lam Research Corporation.
    New Name of Validated End-User: Lam Research Service Co., Ltd.
    Authorization VEU eliminates the burden on exporters and 
reexporters of preparing individual license applications because the 
export, reexport and transfer (in-country) of the eligible items 
specified for each VEU may be made under general authorization instead 
of under individual licenses. With the addition of Intel Dalian as a 
VEU, exporters and reexporters can supply Intel Dalian much more 
quickly, thus enhancing the competitiveness of both the VEU and its 
suppliers of U.S-origin items.
    To ensure appropriate facilitation of exports and reexports, on-
site reviews of VEUs, including Intel Dalian, may be warranted pursuant 
to Section 748.15(f)(2) of the EAR and Section 7(iv) of Supplement No. 
8 to part 748 of the EAR. If such a review is 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 amended by Executive Order 
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended 
most recently by the Notice of August 8, 2013, 78 FR 49107 (August 12, 
2013), has continued the EAR in effect under the International 
Emergency Economic Powers Act. BIS continues to carry out the 
provisions of the Export Administration Act, as appropriate and to the 
extent permitted by law, pursuant to Executive Order 13222.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and

[[Page 54754]]

equity). Executive Order 13563 emphasizes the importance of quantifying 
both costs and benefits, reducing costs, harmonizing rules, and 
promoting flexibility. This rule has been determined to be not 
significant for purposes of Executive Order 12866.
    2. This rule involves collections previously approved by the Office 
of Management and Budget (OMB) under Control Number 0694-0088, ``Multi-
Purpose Application,'' which carries a burden hour estimate of 43.8 
minutes to prepare and submit form BIS-748; and for recordkeeping, 
reporting and review requirements in connection with Authorization VEU, 
which carries an estimated burden of 30 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 of 1995 (44 U.S.C. 3501 et seq.) (PRA) and OMB Control 
Number 0694-0088 are not expected to increase significantly as a result 
of this rule.
    Notwithstanding any other provisions 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 PRA, 
unless that collection of information displays a currently valid OMB 
Control Number.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(b)(B), BIS finds good cause to waive requirements that this rule be 
subject to notice and the opportunity for public comment because they 
are unnecessary. In determining whether to grant VEU designations, a 
committee of U.S. Government agencies evaluates information about and 
commitments made by candidate companies, the nature and terms of which 
are set forth in 15 CFR part 748, Supplement No. 8. The criteria for 
evaluation by the committee are set forth in 15 CFR 748.15(a)(2).
    The information, commitments, and criteria for this extensive 
review were all established through the notice of proposed rulemaking 
and public comment process (71 FR 38313 (July 6, 2006) (proposed rule), 
and 72 FR 33646 (June 19, 2007) (final rule)). Given the similarities 
between the authorizations provided under the VEU program and export 
licenses (as discussed further below), the publication of this 
information does not establish new policy. In publishing this final 
rule, BIS merely adds to the list of VEUs and the respective eligible 
items and destinations and implements a technical change, which is to 
change the name of an existing VEU, all within the established 
regulatory framework of the Authorization VEU program. Further, this 
rule does not abridge the rights of the public or eliminate the 
public's option to export under any of the forms of authorization set 
forth in the EAR.
    Publication of this rule in other than final form is unnecessary 
because the authorizations granted in the rule are consistent with the 
authorizations granted to exporters for individual licenses (and 
amendments or revisions thereof), which do not undergo public review. 
In addition, as with license applications, VEU authorization 
applications contain confidential business information, which is 
necessary for the extensive review conducted by the U.S. Government in 
assessing such applications. This information is extensively reviewed 
according to the criteria for VEU authorizations, as set out in 15 CFR 
748.15(a)(2). Additionally, just as the interagency reviews license 
applications, the authorizations granted under the VEU program involve 
interagency deliberation and result from review of public and non-
public sources, including licensing data, and the measurement of such 
information against the VEU authorization criteria. Given the nature of 
the review, and in light of the parallels between the VEU application 
review process and the review of license applications, public comment 
on this authorization and subsequent amendments prior to publication is 
unnecessary. Moreover, because, as noted above, the criteria and 
process for authorizing and administering VEUs were developed with 
public comments, allowing additional public comment on this amendment 
to individual VEU authorizations, which was determined according to 
those criteria, is unnecessary.
    Section 553(d) of the APA generally provides that rules may not 
take effect earlier than thirty (30) days after they are published in 
the Federal Register. BIS finds good cause to waive the 30-day delay in 
effectiveness under 5 U.S.C. 553(d)(3) because the delay would be 
contrary to the public interest. BIS is simply amending the list of VEU 
authorizations by adding a new end user, consistent with established 
objectives and parameters administered and enforced by the responsible 
designated departmental representatives to the End-User Review 
Committee. Delaying this action's effectiveness could cause confusion 
with the new VEU status as determined by those authorized government 
representatives and stifle the ongoing purpose of the VEU Authorization 
Program. Accordingly, it is contrary to the public interest to delay 
this rule's effectiveness.
    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 under the APA or by any other law, the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable. As a result, no final regulatory flexibility 
analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 748

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

    Accordingly, part 748 of the EAR (15 CFR parts 730-774) 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 8, 2013, 78 FR 
49107 (August 12, 2013).

0
2. Amend Supplement No. 7 to part 748 to:
0
a. Remove the name of ``Lam Research Corporation'' from the Validated 
End-User column in ``China (People's Republic of)'' and add in its 
place ``Lam Research Service Co., Ltd.''; and
0
b. Add in alphabetical order the entry ``Intel Semiconductor (Dalian) 
Ltd.'' in ``China (People's Republic of)'' to read as follows:

[[Page 54755]]

  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
----------------------------------------------------------------------------------------------------------------
                               Validated end-   Eligible items  (by      Eligible
           Country                  user               ECCN)           destination    Federal Register  citation
----------------------------------------------------------------------------------------------------------------
 Nothing in this Supplement shall be deemed to supersede other provisions in the EAR, including but not limited
                                              to Sec.   748.15(c).
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
                              Intel            These items           *Intel           78 FR [INSERT PAGE
                               Semiconductor    authorized for the    Semiconductor    NUMBER], 9-6-13.
                               (Dalian) Ltd.    Intel destination     (Dalian) Ltd.,
                                                identified by one     No. 109 Huai
                                                asterisk (*):         He Road East,
                                               1A004, 1C006.d,        Dalian
                                                2A226, 2A292,         Economic and
                                                2B006.b, 2B230,       Technology
                                                2B231, 2B350,         Development
                                                3A233.a, 3B001        Area, Dalian,
                                                (except for           Liao Ning
                                                multilayer masks      Province,
                                                with a phase shift    116600, China.
                                                layer designed to
                                                produce ``space
                                                qualified''
                                                semiconductor
                                                devices), 3C002,
                                                3E002 (excluding
                                                development and
                                                production
                                                technology specific
                                                to digital signal
                                                processors and
                                                digital array
                                                processors and
                                                further limited to
                                                ``technology''
                                                based on the
                                                international
                                                technology roadmap
                                                for semiconductors
                                                (ITRS)), and
                                                4E001(limited to
                                                technology for
                                                computer products
                                                or components not
                                                exceeding an
                                                adjusted peak
                                                performance (APP)
                                                level of 12.0
                                                weighted teraflops).
                              ...............  These items           ** Intel
                                                authorized for the    Semiconductor
                                                Intel destination     (Dalian) Ltd.,
                                                identified by two     c/o Dalian
                                                asterisks (**):       Kintetsu
                                               1A004, 1C006.d,        Logistics Co.,
                                                2A226, 2A292,         Ltd, Dayaowan
                                                2B006.b, 2B230,       Bonded Port
                                                2B231, 2B350,         No. 6 Road W4
                                                3A233.a, 3B001        Unit A1,
                                                (except for           Dalian
                                                multilayer masks      Economic and
                                                with a phase shift    Technology
                                                layer designed to     Development
                                                produce ``space       Area, Dalian,
                                                qualified''           Liao Ning
                                                semiconductor         Province,
                                                devices), and 3C002.  116601, China.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

    Dated: August 29, 2013.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2013-21579 Filed 9-5-13; 8:45 am]
BILLING CODE 3510-33-P