Document ID: BIS-2011-0020-0001
Agency: bis
Document Type: Rule
Title: Revisions to Validated End-User Authorizations: CSMC Technologies Corp., People's Republic of China
Posted Date: 2011-06-28T04:00Z

[Federal Register: June 28, 2011 (Volume 76, Number 124)]
[Rules and Regulations]               
[Page 37634-37636]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jn11-6]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 110519290-1298-01]
RIN 0694-AF25

 
Revision to the Validated End-User Authorization for CSMC 
Technologies Corporation in the People's Republic of China

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 revise the 
validated end-user authorization for CSMC Technologies Corporation 
(CSMC) in the People's Republic of China (PRC) by adding an item to the 
list of items that may be exported, reexported, or transferred (in-
country) to CSMC's eligible destinations under Authorization Validated 
End-User (VEU).

DATES: This rule is effective June 28, 2011.

FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chair, End-User 
Review Committee, Office of the Assistant Secretary, Export 
Administration, Bureau of Industry and Security, U.S. Department of 
Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, E-mail: 
ERC@bis.doc.gov.

[[Page 37635]]

SUPPLEMENTARY INFORMATION:

Background

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

    BIS amended the EAR in a final rule on June 19, 2007 (72 FR 33646), 
creating a new authorization for ``validated end-users'' (VEUs) located 
in eligible destinations to which eligible items may be exported, 
reexported, or transferred (in-country) under a general authorization 
instead of a license, in conformance with section 748.15 of the EAR. On 
January 18, 2011, BIS identified CSMC as a Validated End-User (76 FR 
2802).
    VEUs may obtain eligible items that are on the Commerce Control 
List, set forth in Supplement No. 1 to Part 774 of the EAR, without 
having to wait for their suppliers to obtain export licenses from BIS. 
Eligible items may include commodities, software, and technology, 
except those controlled for missile technology or crime control 
reasons.
    The VEUs listed in Supplement No. 7 to Part 748 of the EAR 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. 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. A unanimous vote by the ERC is required 
to authorize VEU status for a candidate or to add any eligible items to 
an existing authorization. Majority vote of the ERC is required to 
remove VEU authorization or to remove eligible items from an existing 
authorization.
    In addition to U.S. exporters, Authorization VEU may be used in 
accordance with the provisions of the EAR by foreign reexporters and by 
persons transferring in-country, and it does not have an expiration 
date. VEUs are subject to regular reviews, based on information 
available to the United States government, to ensure that items shipped 
under Authorization VEU are used for civilian purposes. In addition, 
VEUs are subject to on-site reviews as warranted.
    As of the date of this rule, pursuant to section 748.15(b) of the 
EAR, VEUs are only located in the PRC and India.

Revisions to CSMC Technologies Corporation's ``Eligible Items (By 
ECCN)''

    This final rule amends Supplement No. 7 to Part 748 of the EAR to 
add most items classified under Export Control Classification Number 
(ECCN) 3B001.h (``Multi-layer masks with a phase shift layer'') to the 
list of items that may be exported, reexported, or transferred (in-
country) to CSMC's ``Eligible Destinations'' under Authorization VEU. 
Multilayer masks with a phase shift layer designed to produce ``space 
qualified'' semiconductor devices are excluded from those items 
eligible for shipment under Authorization VEU to CSMC. The ERC reviewed 
CSMC's request to add these items to its VEU Authorization and 
concluded the proposed addition is appropriate.
    The complete list of items by ECCN, as revised, that may be 
exported, reexported, or transferred (in-country) to CSMC's eligible 
destinations under Authorization VEU is as follows:

Eligible Items that may be exported, reexported, or transferred (in-
country) to the three ``Eligible Destinations'' under CSMC Technologies 
Corporation's Validated End-User Authorization

    Items classified under Export Control Classification Numbers 
1C350.c.3, 1C350.c.11, 2B230.a, 2B230.b, 2B350.f, 2B350.g, 2B350.h, 
3B001.c.1.a, 3B001.c.2.a, 3B001.e, 3B001.h (except for multilayer masks 
with a phase shift layer designed to produce ``space qualified'' 
semiconductor devices), 3C002.a, and 3C004.

    Since August 21, 2001, the Export Administration Act (the 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 12, 2010 (75 FR 50681 (August 16, 
2010)), 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. 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, of reducing costs, of harmonizing rules, and of 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 58 
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 because this rule expands the list of items that do 
not require an individually validated license for exports, reexports, 
or transfers (in-country) to eligible CSMC destinations. 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 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 such 
notice and comment here 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 2, 2006, and 72 FR 33646, 
June 19, 2007). 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 simply amends an 
authorization by adding an eligible ECCN to the list of items approved 
for export, reexport, or transfer (in-country)

[[Page 37636]]

to the VEU's approved facilities. This has been done within the 
established regulatory framework of the 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 a proposed rule is unnecessary because the 
authorization granted in the rule is consistent with the authorizations 
granted to exporters for individual licenses (and amendments or 
revisions thereof), which do not undergo public review. Just as license 
applicants do, VEU authorization applicants provide the U.S. Government 
with confidential business information. 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 
thorough 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 an individual VEU authorization, 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. However, section 553(d)(1) of the APA provides 
that a substantive rule which grants or recognizes an exemption or 
relieves a restriction, may take effect earlier. Today's final rule 
grants an exemption from licensing procedures and thus is effective 
immediately.
    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 and no regulatory flexibility analysis 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 12, 2010, 75 
FR 50681 (August 16, 2010).

0
2. Supplement No. 7 to Part 748 is amended by revising the ``Eligible 
Items (by ECCN)'' for ``CSMC Technologies Corporation'', for ``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
----------------------------------------------------------------------------------------------------------------
              Country                 Validated end-user    Eligible items (by ECCN)      Eligible destination
----------------------------------------------------------------------------------------------------------------
China (People's Republic of)......                                                     .........................

                                                  * * * * * * *
                                    CSMC Technologies      1C350.c.3, 1C350.c.11,      CSMC Technologies Fab 1
                                     Corporation.           2B230.a, 2B230.b,           Co., Ltd, 14 Liangxi
                                                            2B350.f, 2B350.g 2B350.h,   Road, Wuxi, Jiangsu
                                                            3B001.c.1.a, 3B001.c.2.a,   214061, China.
                                                            3B001.e 3B001.h (except    CSMC Technologies Fab 2
                                                            for multilayer masks with   Co., Ltd., Block 86, 87,
                                                            a phase shift layer         Wuxi National Hi-New
                                                            designed to produce         Tech Industrial
                                                            ``space qualified''         Development Zone, Wuxi,
                                                            semiconductor devices),     Jiangsu 214061, China.
                                                            3C002.a, and 3C004.        Wuxi CR Semiconductor,
                                                                                        Wafers and Chips Co.,
                                                                                        Ltd., 14 Liangxi Road,
                                                                                        Wuxi, Jiangsu 214061,
                                                                                        China.

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

    Dated: June 22, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-16156 Filed 6-27-11; 8:45 am]
BILLING CODE 3510-33-P