Document ID: BIS-2014-0015-0001
Agency: bis
Document Type: Rule
Title: Validated End-User Authorizations: Samsung China Semiconductor Co., Ltd. and Semiconductor Manufacturing International Corp.
Posted Date: 2014-05-29T04:00Z

[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30713-30716]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12158]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 140506409-4409-01]
RIN 0694-AG15

Amendments to Existing Validated End-User Authorizations in the 
People's Republic of China: Samsung China Semiconductor Co. Ltd and 
Semiconductor Manufacturing International Corporation

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 revise existing 
authorizations for Validated End-Users (VEUs) Samsung China 
Semiconductor Co. Ltd. (Samsung China) and Semiconductor Manufacturing 
International Corporation (SMIC) in the People's Republic of China 
(PRC). Specifically, BIS amends Supplement No. 7 to part 748 of the EAR 
to change the address of the facility used by Samsung China. In 
addition, BIS adds a facility to the list of eligible destinations and 
an item to the list of eligible items for SMIC.

DATES: This rule is effective May 29, 2014.

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 EAR in a final rule 
published on June 19, 2007 (72 FR 33646) to create Authorization VEU.

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

Revision to the List of ``Eligible Items (By ECCN)'' for Validated End-
User Samsung China Semiconductor Co. Ltd (Samsung China)

    This final rule amends Supplement No. 7 to part 748 of the EAR to 
change the address of the Samsung China facility to which eligible 
items may be exported, reexported or transferred (in-country) using 
Authorization VEU. BIS makes this change pursuant to a request from 
Samsung China advising BIS that Samsung China received verification of 
the final address of its facility from the Chinese government. Samsung 
China's VEU-eligible facility, which is located in an area being newly 
developed for corporate use, has not moved. The list of eligible items 
for Samsung China remains the same. BIS added Samsung China as a VEU in 
Supplement No. 7 to part 748 in a rule published in the Federal 
Register on July 10, 2013 (78 FR 41291).

[[Page 30714]]

Prior Address of Samsung China Destination:

Samsung China Semiconductor Co. Ltd., Xinglong Street, Chang'an 
District, Xi'an, People's Republic of China 710065.

New Address for Samsung China:

Samsung China Semiconductor Co. Ltd., No. 1999, North Xiaohe Road, 
Xi'an, China 710119.

Revisions to the List of ``Eligible Destinations'' and ``Eligible Items 
(By ECCN)'' for Validated End-User Semiconductor Manufacturing 
International Corporation (SMIC)

    This final rule also amends Supplement No. 7 to part 748 of the EAR 
to add a facility to the list of SMIC facilities to which eligible 
items may be exported, reexported or transferred (in-country) using 
Authorization VEU, bringing the number of SMIC's VEU-authorized 
facilities in the PRC to a total of five. BIS also adds an ECCN to 
SMIC's list of eligible items that may be sent to the five facilities. 
The ECCN added in this rule to SMIC's VEU authorization is ECCN 3A233 
(certain types of mass spectrometers). BIS makes these changes pursuant 
to requests from SMIC. SMIC requested the addition of the new VEU-
eligible destination in order to facilitate shipments to its new 
business venture.

Additional SMIC Destination:

Semiconductor Manufacturing North China (Beijing) Corporation, No. 18 
Wen Chang Road, Building 9, Beijing Economic-Technological Development 
Area, Beijing, China 100176.

Eligible Items (by ECCN) That May Be Exported, Reexported or 
Transferred (In-Country) to the Eligible Destination Identified Under 
Semiconductor Manufacturing International Corporation Validated End-
User Authorization

    ECCNs 1C350.c.3, 1C350.d.7, 2B006.b.1, 2B230, 2B350.d.2, 
2B350.d.3, 2B350.g.3, 2B350.i.3, 3A233, 3B001.a, 3B001.b, 3B001.c, 
3B001.e, 3B001.f, 3C001, 3C002, 3C003, 3C004, 5B002, and 5E002 
(limited to ``technology'' according to the General Technology Note 
for the ``production'' of integrated circuits controlled by ECCN 
5A002 that have been classified by BIS as eligible for License 
Exception ENC under paragraph (b)(2) or (b)(3) of Section 740.17 of 
the EAR, or classified by BIS as a mass market item under paragraph 
(b)(3) of Section 748.15 of the EAR).

    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.

Export Administration Act

    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, as amended 
by Executive Order 13637.

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 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 updates the address of an existing VEU and adds an eligible 
destination and an item to a second existing VEU. These changes have 
been made 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

[[Page 30715]]

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 
regarding which facilitates and items are authorized by the U.S. 
Government and in turn stifle the purpose of the VEU 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.

    Dated: May 21, 2014.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
    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 by:
0
a. Revising the the entry for ``Samsung China Semiconductor Co. Ltd.'' 
in ``China (People's Republic of)''; and
0
b. Revising the entry for ``Semiconductor Manufacturing International 
Corporation'' in ``China (People's Republic of)'' 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
----------------------------------------------------------------------------------------------------------------
                                                                                              Federal Register
    Country      Validated end-user    Eligible items (By ECCN)     Eligible destination          citation
----------------------------------------------------------------------------------------------------------------
 Nothing in this Supplement shall be deemed to supersede other provisions in the EAR, including but not limited
                                              to Sec.   748.15(c).
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
                Samsung China         1C350.c.3, 1C350.d.7,      Samsung China              78 FR 41291, 7/10/
                 Semiconductor Co.     2B230, 2B350.d.2,          Semiconductor Co. Ltd.,    13.
                 Ltd                   2B350.g.3, 2B350.i.3,      No. 1999, North Xiaohe    78 FR 69535, 11/20/
                                       3A233, 3B001.a.1,          Road, Xi'an, China         13.
                                       3B001.b, 3B001.c,          710119.                   79 FR [INSERT PAGE
                                       3B001.e, 3B001.f,                                     NUMBER], 5/29/14.
                                       3B001.h, 3C002, 3C004,
                                       3D002, and 3E001
                                       (limited to
                                       ``technology'' for items
                                       classified under 3C002
                                       and 3C004 and
                                       ``technology'' for use
                                       consistent with the
                                       International Technology
                                       Roadmap for
                                       Semiconductors process
                                       for items classified
                                       under ECCNs 3B001 and
                                       3B002).
                Semiconductor         1C350.c.3, 1C350.d.7,      Semiconductor              72 FR 59164, 10/19/
                 Manufacturing         2B006.b.1, 2B230,          Manufacturing              07.
                 International         2B350.d.2, 2B350.d.3,      International (Shanghai)  75 FR 67029, 11/1/
                 Corporation.          2B350.g.3, 2B350.i.3,      Corporation, 18 Zhang      10.
                                       3A233, 3B001.a, 3B001.b,   Jiang Rd., Pudong New     77 FR 10953, 2/24/
                                       3B001.c, 3B001.e,          Area, Shanghai, China      12.
                                       3B001.f, 3C001, 3C002,     201203.                   78 FR 69535, 11/20/
                                       3C003, 3C004, 5B002, and  Semiconductor               13.
                                       5E002 (limited to          Manufacturing             79 FR [INSERT PAGE
                                       ``technology'' according   International (Tianjin)    NUMBER], 5/29/14.
                                       to the General             Corporation, 19 Xing Hua
                                       Technology Note for the    Avenue, Xi Qing Economic
                                       ``production'' of          Development Area,
                                       integrated circuits        Tianjin, China 300385..
                                       controlled by ECCN 5A002  Semiconductor
                                       that have been             Manufacturing
                                       classified by BIS as       International (Beijing)
                                       eligible for License       Corporation, No. 18 Wen
                                       Exception ENC under        Chang Road, Beijing
                                       paragraph (b)(2) or        Economic-Technological
                                       (b)(3) of Section 740.17   Development Area,
                                       of the EAR, or             Beijing, China 100176..
                                       classified by BIS as a    Semiconductor
                                       mass market item under     Manufacturing
                                       paragraph (b)(3) of        International (Shenzhen)
                                       Section 748.15 of the      Corporation, Qier Road,
                                       EAR).                      Export Processing Zone,
                                                                  Pingshan New Area,
                                                                  Shenzhen, China 518118..
----------------------------------------------------------------------------------------------------------------
                                                                 Semiconductor
                                                                  Manufacturing North
                                                                  China (Beijing)
                                                                  Corporation, No. 18 Wen
                                                                  Chang Road, Building 9,
                                                                  Beijing Economic-
                                                                  Technological
                                                                  Development Area,
                                                                  Beijing, China 100176.
 
                                                  * * * * * * *
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[[Page 30716]]

[FR Doc. 2014-12158 Filed 5-28-14; 8:45 am]
BILLING CODE 3510-33-P