Document ID: BIS-2024-0006-0001
Agency: bis
Document Type: Rule
Title: Existing Validated End-User Authorizations in the People's Republic of China: Samsung China Semiconductor Co., Ltd. and SK hynix Semiconductor (China), Ltd.
Posted Date: 2023-10-17T04:00Z

[Federal Register Volume 88, Number 199 (Tuesday, October 17, 2023)]
[Rules and Regulations]
[Pages 71478-71481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22873]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 231010-0244]
RIN 0694-AJ39

Existing Validated End-User Authorizations in the People's 
Republic of China: Samsung China Semiconductor Co. Ltd. and SK Hynix 
Semiconductor (China) Ltd.

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

[[Page 71479]]

SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) to revise the existing 
Validated End-User (VEU) list for the People's Republic of China (PRC) 
by updating the list of eligible items in the EAR for Samsung China 
Semiconductor Co. Ltd. and SK hynix Semiconductor (China) Ltd. In 
addition, this rule makes corresponding changes consistent with the 
scope of the amended authorizations for these VEUs.

DATES: This rule is effective October 17, 2023.

FOR FURTHER INFORMATION CONTACT: 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; Email: [email protected].

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 the associated eligible destinations 
(facilities) and items are identified in supplement no. 7 to part 748 
of the Export Administration Regulations (EAR, 15 CFR parts 730-774). 
Pursuant to Sec.  748.15 (Authorization Validated End-User (VEU)), 
eligible destinations of VEUs may obtain eligible items without the 
need for the VEUs' supplier to obtain an export or reexport license 
from BIS. Eligible items vary among VEUs and may include commodities, 
software, and/or technology, except items controlled for missile 
technology or crime control reasons on the Commerce Control List (CCL) 
(supp. no. 1 to 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, 
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.

Clarification to Heading of Supplement No. 7 to Part 748

    This rule clarifies the heading of supplement no. 7 to part 748 by 
adding the parenthetical ``(in-country)'' after the word ``transfer'' 
to make clear that the term that applies to this supplement is transfer 
(in-country) as described in Sec.  734.16 of the EAR and not the 
defined term ``transfer'' in Sec.  772.1 of the EAR.

Amendments to Existing VEU Authorizations for Samsung China 
Semiconductor Co. Ltd. and SK Hynix Semiconductor (China) Ltd.

Revision to the List of Eligible Items for Samsung China Semiconductor 
Co. Ltd.

    In this rule, BIS amends supplement no. 7 to part 748 to revise the 
list of eligible items that may be exported, reexported or transferred 
(in-country) to Samsung China Semiconductor Co. Ltd. under 
Authorization VEU. Specifically, this rule amends the list of items 
eligible for export, reexport or transfer (in-country) to Samsung China 
Semiconductor Co. Ltd. under Authorization VEU to read: ``All items 
subject to the Export Administration Regulations, except ``extreme 
ultraviolet'' (``EUV'') equipment and ``specially designed'' ``parts,'' 
``components,'' ``software,'' and ``technology,'' necessary for the 
``development'' or ``production'' of NAND memory. Excluded from 
Sec. Sec.  744.6(c)(2)(i-iii), and 744.23(a)(1)(iii) and (a)(2)(iii) of 
the EAR. See Sec.  748.15(d).''

Revisions to the List of Eligible Items for SK Hynix Semiconductor 
(China) Ltd.

    BIS also amends supplement no. 7 to part 748 to revise the list of 
items eligible for export, reexport or transfer (in-country) to SK 
hynix Semiconductor (China) Ltd. under Authorization VEU to read: ``All 
items subject to the Export Administration Regulations, except 
``extreme ultraviolet'' (``EUV'') equipment and ``specially designed'' 
``parts,'' ``components,'' ``software,'' and'' technology,'' necessary 
for the ``development'' or ``production'' of dynamic random-access 
memory (DRAM). Excluded from Sec. Sec.  744.6(c)(2)(i-iii) and 
744.23(a)(1)(iii) and (a)(2)(iii) of the EAR. See Sec.  748.15(d).''

Amendment to Sec.  748.15 Authorization Validated End-User (VEU)

    In addition to the amendments to the lists of eligible items 
discussed above, BIS also makes corresponding changes to Sec.  748.15, 
consistent with the scope of the amended authorizations for these VEUs. 
Specifically, in this rule, BIS adds a new sentence after the first 
sentence of Sec.  748.15(d) that provides an exclusion to the 
restrictions of Sec. Sec.  744.6(c)(2)(i-iii) and 744.23(a)(1)(iii) and 
(a)(2)(iii) controls. The added sentence states, ``This restriction 
does not apply to Validated End Users identified in supplement no. 7 to 
part 748--Authorization Validated End-User (VEU) as excluded from 
Sec. Sec.  744.6(c)(2)(i-iii) and 744.23(a)(1)(iii) and (a)(2)(iii).'' 
This serves to inform exporters that Authorization VEU may be used to 
overcome the license requirements set forth in Sec. Sec.  744.6(c) and 
744.23(a)(1)(iii) and (a)(2)(iii) for identified VEUs.

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). ECRA provides the legal basis for BIS's principal authorities 
and serves as the authority under which BIS issues this rule.

Rulemaking Requirements

    1. This 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 or 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 an 
information collection approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System. BIS does not 
anticipate a change to the burden hours associated with this collection 
as a result of this rule. Information regarding the collection, 
including all supporting materials, can be accessed at https://www.reginfo.gov/public/do/PRAMain.
    3. This rule does not contain policies with federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to section 1762 of the Export Control Reform Act of 
2018, this action is exempt from the Administrative Procedure Act (5 
U.S.C. 553) requirements for notice of proposed rulemaking, opportunity 
for public participation, and delay in effective date.
    5. Because a notice of proposed rulemaking and an opportunity for

[[Page 71480]]

public comment are not required to be given for this rule by 5 U.S.C. 
553, or by any other law, the analytical requirements of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. 
Accordingly, no 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 part 748 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 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 4, 2022, 87 FR 48077 (August 5, 2021).

0
2. Amend Sec.  748.15(d) by adding a sentence after the first sentence 
to read as follows:

Sec.  748.15  Authorization Validated End-User (VEU).

* * * * *
    (d) * * * Items obtained under authorization VEU in China may be 
used only for civil end uses and may not be used for any activities 
described in part 744 of the EAR. The restrictions of Sec. Sec.  
744.6(c)(2)(i) through (iii) and 744.23(a)(1)(iii) and (a)(2)(iii) do 
not apply to VEUs identified in supplement no. 7 to part 748 as 
excluded from Sec. Sec.  744.6(c)(2)(i) through (iii) and 
744.23(a)(1)(iii) and (a)(2)(iii). * * *
* * * * *

0
3. Amend Supplement No. 7 to part 748 by revising the heading of the 
supplement and the entries for ``Samsung China Semiconductor Co. Ltd.'' 
and ``SK hynix Semiconductor (China) Ltd.'' 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 (In-Country), 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         All items subject to  Samsung China              78 FR 41291, 7/10/
 Semiconductor Co.     the Export            Semiconductor Co., Ltd.,   13. 78 FR 69535, 11/
 Ltd.                  Administration        No. 1999, North Xiaohe     20/13. 79 FR 30713,
                       Regulations (EAR),    Road, Xi'an, China         5/29/14. 80 FR
                       except ``extreme      710119.                    11863, 3/5/15. 88
                       ultraviolet''                                    FR [INSERT PAGE
                       (``EUV'') equipment                              NUMBER], 10/17/23.
                       and ``specially
                       designed''
                       ``parts,''
                       ``components,''
                       ``software,'' and
                       ``technology''
                       therefor, necessary
                       for the
                       ``development'' or
                       ``production'' of
                       NAND memory.
                       Excluded from Sec.
                       Sec.
                       744.6(c)(2)(i-iii)
                       and
                       744.23(a)(1)(iii)
                       and (a)(2)(iii) of
                       the EAR. See Sec.
                       748.15(d).
 

[[Page 71481]]

 
                                                  * * * * * * *
SK hynix              All items subject to  SK hynix Semiconductor     75 FR 62462, 10/12/
 Semiconductor         the Export            (China) Ltd., Lot K7,      10. 77 FR 40258, 7/
 (China) Ltd.          Administration        Wuxi High-tech Zone,       9/12. 78 FR 3319, 1/
                       Regulations, except   Comprehensive Bonded       16/13. 78 FR 69537,
                       ``extreme             Zone, Wuxi New District,   11/20/13. 88 FR
                       ultraviolet''         Jiangsu Province, China    [INSERT PAGE
                       (``EUV'') equipment   214028.                    NUMBER], 10/17/23.
                       and ``specially
                       designed''
                       ``parts,''
                       ``components,''
                       ``software,'' and
                       ``technology,''
                       necessary for the
                       ``development'' or
                       ``production'' of
                       dynamic random-
                       access memory
                       (DRAM). Excluded
                       from Sec.  Sec.
                       744.6(c)(2)(i-iii)
                       and
                       744.23(a)(1)(iii)
                       and (a)(2)(iii) of
                       the EAR. See Sec.
                       748.15(d).
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2023-22873 Filed 10-13-23; 8:45 am]
BILLING CODE 3510-33-P