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October 19, 2007 

BIS Releases First List of Validated End-Users Under Authorization VEU

The Bureau of Industry and Security (BIS) announced in today's Federal Register the first group of five “validated end-users” (VEUs) located in the People’s Republic of China (PRC) to whom U.S. exporters may ship goods without an export license. Today's announcement is the result of the regulation issued by BIS on June 19, 2007 establishing the Authorized End-User Program, whereby VEUs will be able to obtain eligible items that are on the Commerce Control List without having to wait for their suppliers to obtain export licenses from BIS.

The first group of VEUs includes:

  • Applied Materials China, Ltd.
  • BHA Aerocomposite Parts Co., Ltd.
  • National Semiconductor Corporation
  • Semiconductor Manufacturing International Corporation
  • Shanghai Hua Hong NEC Electronics Company, Ltd.
The final rule lists the names and addresses of 14 facilities that have been authorized under the VEU program and the various ECCNs that have been approved for export to these locations without a specific license issued by BIS.

In announcing the approval of these five VEUs, BIS indicated that:
approval of these five companies as VEUs should significantly reduce the value of trade that requires a license for export or reexport to the PRC. Approximately $54 million of items described as "eligible items'' in this notice were licensed for export to these five end-users in 2006. This $54 million represents about 18% of all licensed exports to the PRC in 2006. Approval of these companies as VEUs 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 without licenses. This savings will enable exporters and reexporters to supply the VEUs much more quickly, thus enhancing the competitiveness of the exporters, reexporters, and end-users in the PRC.
BIS also noted that it reserves the right to conduct on-site reviews of these VEUs. If such reviews are warranted, BIS will inform the PRC Ministry of Commerce that it will conduct such a review.

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