Document ID: BIS-2010-0008-0001
Agency: bis
Document Type: Rule
Title: Addition to the List of Validated End-Users in the People's Republic of China (PRC)
Posted Date: 2010-01-15T05:00Z

[Federal Register: January 15, 2010 (Volume 75, Number 10)]
[Rules and Regulations]               
[Page 2435-2437]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15ja10-3]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 0908111226-91431-01]
RIN 0694-AE70

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

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 add an entity to 
the list of validated end-users for the People's Republic of China 
(PRC) approved to receive exports, reexports and transfers of certain 
items under Authorization Validated End-User (VEU). Specifically, this 
rule amends the EAR to add one additional validated end-user and 
identifies eligible items for export and reexport and transfer (in-
country) to one facility in the PRC. In a final rule published in the 
Federal Register on June 19, 2007, BIS revised and clarified U.S. 
export control policy for the PRC, establishing Authorization VEU and 
identifying the PRC as the initial eligible destination.

DATES: This rule is effective January 15, 2010. 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-AE70, by any 
of the following methods:
    E-mail: publiccomments@bis.doc.gov Include ``RIN 0694-AE70'' 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 Street & Pennsylvania Avenue, NW., Room 2705, 
Washington, DC 20230, Attn: RIN 0694-AE70.

[[Page 2436]]

    Send comments regarding the collection of information associated 
with this rule, including suggestions for reducing the burden to 
Jasmeet Seehra, Office of Management and Budget (OMB), by e-mail to 
Jasmeet_K._Seehra@omb.eop.gov or by fax to (202) 395-7285. Comments 
on this collection of information should be submitted separately from 
comments on the final rule (i.e., RIN 0694-AE70)--all comments on the 
latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT: Elizabeth Scott Sangine, Acting 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) 482-3343, or by e-mail to 
bscott@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

Authorization Validated End-User (VEU): The List of Approved End-Users, 
Eligible Items and Destinations in the PRC

    Consistent with U.S. Government policy to facilitate trade for 
civilian end-users 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'' 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 under a general authorization 
instead of a license, in conformance with Section 748.15 of the EAR.
    Authorization VEU is a mechanism to facilitate increased high-
technology exports to companies in eligible destinations that have a 
record of using such items responsibly. Currently, there are two 
eligible destinations, the People's Republic of China (PRC) and India. 
Validated end-users may 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 
shipment under Authorization VEU. In addition to U.S. exporters, 
Authorization VEU may be used by foreign reexporters, and does not have 
an expiration date.
Additional Validated End-User in the PRC and Its Respective ``Eligible 
Items (By ECCN)'' and ``Eligible Destination''
    This final rule amends Supplement No. 7 to Part 748 of the EAR to 
identify an additional company with eligible facilities in the PRC as a 
validated end-user and to identify the items that may be exported, 
reexported or transferred to it under Authorization VEU. This new entry 
is for Grace Semiconductor Manufacturing Corporation. It lists Export 
Control Classification Numbers (ECCNs) 1C350.c.3, 1C350.d.7, 2B230, 
2B350.d.2, 2B350.g.3, 2B350.i.4, 3B001.a.1, 3B001.b, 3B001.c, 3B001.d, 
3B001.e, 3B001.f, 3B001.h, 3C002, 3C004, 5B002, and 5E002 (limited to 
production technology for integrated circuits controlled by ECCNs 5A002 
or 5A992 that have been successfully reviewed under the encryption 
review process specified in sections 740.17(b)(2) or 740.17(b)(3) and 
742.15 of the EAR; Note also the guidance on cryptographic interfaces 
(OCI) in section 740.17(b) of the EAR) under ``Eligible Items (By 
ECCN),'' and includes the following facility name and address under 
``Eligible Destination'': Grace Semiconductor Manufacturing 
Corporation, 1399 Zuchongzhi Road, Zhangjiang Hi-Tech Park, Shanghai, 
PR China 20123.
    With the publication of this final rule, the total number of 
validated end-users in the PRC is six, and the total number of eligible 
facilities in the PRC is sixteen. The validated end-users 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 this new end-user as a validated end-user is expected to 
further facilitate exports to civil end-users in the PRC. Approval of 
this company 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 
under general authorization instead of under license. This savings will 
enable exporters and reexporters to supply validated end-users 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 validated end-users 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 13, 2009 (74 FR 41325 (Aug. 14, 2009)), 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 Requirements

    1. This final rule has been determined to be not significant for 
the purposes of Executive Order 12866.
    2. 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 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 rule 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 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 of 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. Pursuant to 5 U.S.C. 553(a)(1), 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. 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

[[Page 2437]]

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, U.S. Department of Commerce, 14th Street & 
Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230.

List of Subjects in 15 CFR Part 748

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

0
Accordingly, part 748 of the Export Administrative Regulations (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 13, 2009, 74 
FR 41325 (August 14, 2009).

0
2. Supplement No. 7 to Part 748 is amended by adding an entry under 
``China (People's Republic of)'' in alphabetical order 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

----------------------------------------------------------------------------------------------------------------
              Country                  Validated end-user      Eligible items (by ECCN)    Eligible destination
----------------------------------------------------------------------------------------------------------------
China (People's Republic of)

                                                  * * * * * * *
                                     Grace Semiconductor     1C350.c.3, 1C350.d.7,        1399 Zuchongzhi Road
                                      Manufacturing           2B230, 2B350.d.2,            Zhangjiang Hi-Tech
                                      Corporation.            2B350.g.3, 2B350.i.4,        Park Shanghai, PR
                                                              3B001.a.1, 3B001.b,          China 201203.
                                                              3B001.c, 3B001.d, 3B001.e,
                                                              3B001.f, 3B001.h, 3C002,
                                                              3C004, 5B002, and 5E002
                                                              (limited to production
                                                              technology for integrated
                                                              circuits controlled by
                                                              ECCNs 5A002 or 5A992 that
                                                              have been successfully
                                                              reviewed under the
                                                              encryption review process
                                                              specified in sections
                                                              740.17(b)(2) or
                                                              740.17(b)(3) and 742.15 of
                                                              the EAR; Note also the
                                                              guidance on cryptographic
                                                              interfaces (OCI) in
                                                              section 740.17(b) of the
                                                              EAR).

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

    Dated: January 12, 2010.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2010-725 Filed 1-14-10; 8:45 am]
BILLING CODE 3510-33-P