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20 November 2013

BIS End User Certificates for China


[Federal Register Volume 78, Number 224 (Wednesday, November 20, 2013)]
[Rules and Regulations]
[Pages 69535-69538]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27809]


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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 78, No. 224 / Wednesday, November 20, 2013 / 
Rules and Regulations

[[Page 69535]]



DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 130927853-3853-01]
RIN 0694-AF99


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

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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

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), Semiconductor Manufacturing 
International Corporation (SMIC), SK hynix Semiconductor (China) Ltd. 
(SK hynix China) and SK hynix Semiconductor (Wuxi) Ltd. (SK hynix Wuxi) 
(collectively ``SK hynix'') in the People's Republic of China (PRC). 
Specifically, BIS amends Supplement No. 7 to part 748 of the EAR to add 
two items and remove one item from the list of eligible items for VEU 
Samsung China, add a facility to the list of eligible destinations and 
two items to the list of eligible items for VEU SMIC, and update the 
addresses of the facilities used by VEU SK hynix China and VEU SK hynix 
Wuxi.

DATES: This rule is effective November 20, 2013.

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)

Revisions 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 
add Export Control Classification Numbers (ECCNs) 2B350.i.3 and 3A233 
to the list of items that may be exported, reexported or transferred 
(in-country) to Samsung China's facility in the PRC under Authorization 
VEU. BIS also removes ECCN 2B350.i.4 from Samsung China's list of 
approved items. BIS makes these changes pursuant to requests from 
Samsung China. 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).

Eligible Items (by ECCN) That May Be Exported, Reexported or 
Transferred (In-Country) to the Eligible Destination Identified Under 
Samsung China Semiconductor Co. Ltd.'s Validated End-User Authorization

    ECCNs 1C350.c.3, 1C350.d.7, 2B230, 2B350.d.2, 2B350.g.3, 2B350.i.3, 
3A233, 3B001.a.1, 3B001.b, 3B001.c, 3B001.e, 3B001.f, 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).

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, to bring the number of SMIC's VEU-authorized 
facilities in the PRC to a total of four. BIS also adds two ECCNs to 
SMIC's list of eligible items that may be sent to the four facilities. 
The ECCNs added in this rule to SMIC's VEU authorization are ECCNs 
2B350.d.3 and 3C003. BIS makes these changes pursuant to requests from 
SMIC.

Additional SMIC Destination

    Semiconductor Manufacturing International (Shenzhen) Corporation, 
Qier Road, Export Processing Zone, Pingshan New Area, Shenzhen, China 
518118.

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, 3B001.a, 3B001.b, 3B001.c, 3B001.e, 3B001.f, 
3C001, 3C002, 3C003, 3C004, 5B002, and 5E002 (limited to ``technology'' 
according to

[[Page 69536]]

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).

Change of Address Name of the Facility for Validated End-Users SK hynix 
Semiconductor (China) Ltd. and SK hynix Semiconductor (Wuxi) Ltd.

    Finally, in this rule, BIS amends Supplement No. 7 to part 748 to 
make a technical change by updating the facility address names for 
existing VEUs SK hynix in the PRC. Although the actual location of the 
facilities for these VEUs has not changed, the technology park where 
the VEUs are located recently changed its name and this amendment 
reflects that change and also indicates the specific lot in which each 
VEU is located.

Prior Address Name for SK hynix China

    Lot K7/K7-1, Export Processing Zone, Wuxi, Jiangsu, China 214028.

New Address Name for SK hynix China

    Lot K7, Wuxi High-tech Zone Comprehensive Bonded Zone, Wuxi New 
District, Jiangsu Province, China 214028.

Prior Address Name for SK hynix Wuxi

    Lot K7/K7-1, Export Processing Zone, Wuxi, Jiangsu, China 214028.

New Address Name for SK hynix Wuxi

    Lot K7-1, Wuxi High-tech Zone Comprehensive Bonded Zone Wuxi New 
District, Jiangsu Province, China 214028.
    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. With the addition of items for Samsung 
China and the addition of items and a facility for SMIC, exporters and 
reexporters can supply items much more quickly, thus enhancing the 
competitiveness of both the VEU and its suppliers of U.S-origin items. 
In addition, the update of the facility addresses for existing VEUs SK 
hynix reinforces the reliability of information that facilitates 
legitimate trade that exporters and reexporters conduct under 
Authorization VEU.
    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.

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 adds an eligible destination to an existing VEU, updates the 
address name of two others, and makes changes to the list of eligible 
items for VEU Samsung and VEU SMIC. 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 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

[[Page 69537]]

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 
with the new VEU status as determined by those authorized government 
representatives and stifle the ongoing purpose of the VEU Authorization 
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.

    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. 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 Export Control Classification Numbers in the ``Eligible 
items (by ECCN)'' column for Validated End-User ``Samsung China 
Semiconductor Co. Ltd.'' in ``China, (People's Republic of)'';
0
b. Revising the list of facilities in the ``Eligible destination'' 
column and items in the ``Eligible items (by ECCN)'' column for 
Validated End-User Semiconductor Manufacturing International 
Corporation'' in ``China, (People's Republic of)''; and
0
c. Revising the address of the facility that appears in the ``Eligible 
destination'' column for both Validated End-Users ``SK hynix 
Semiconductor (China) Ltd.'' and ``SK hynix Semiconductor (Wuxi) Ltd.'' 
in ``China, (People's Republic of)''.
    The revisions 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
----------------------------------------------------------------------------------------------------------------
                                              Eligible items  (by                              Federal Register
       Country         Validated end-user            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.        13. 78 FR [INSERT
                       Ltd.                 2B350.g.3, 2B350.i.3,     Ltd., Xinglong Street,   PAGE NUMBER], 11/
                                            3A233, 3B001.a.1,         Chang'an District,       20/2013.
                                            3B001.b, 3B001.c,         Xi'an, People's
                                            3B001.e, 3B001.f,         Republic of China
                                            3B001.h, 3C002, 3C004,    710065.
                                            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. 75 FR 67029,
                       International        2B350.d.2, 2B350.d.3,     International            11/1/10. 77 FR
                       Corporation.         2B350.g.3, 2B350.i.3,     (Shanghai)               10953, 2/24/12.
                                            3B001.a, 3B001.b,         Corporation, 18 Zhang    78 FR [INSERT
                                            3B001.c, 3B001.e,         Jiang Rd., Pudong New    PAGE NUMBER], 11/
                                            3B001.f, 3C001, 3C002,    Area, Shanghai, China    20/2013.
                                            3C003, 3C004, 5B002,      201203.
                                            and 5E002 (limited to    Semiconductor
                                            ``technology''            Manufacturing
                                            according to the          International
                                            General Technology Note   (Tianjin) Corporation,
                                            for the ``production''    19 Xing Hua Avenue, Xi
                                            of integrated circuits    Qing Economic
                                            controlled by ECCN        Development Area,
                                            5A002 that have been      Tianjin, China 300385.
                                            classified by BIS as     Semiconductor
                                            eligible for License      Manufacturing
                                            Exception ENC under       International
                                            paragraph (b)(2) or       (Beijing) Corporation,
                                            (b)(3) of section         No. 18 Wen Chang Road,
                                            740.17 of the EAR, or     Beijing Economic-
                                            classified by BIS as a    Technological
                                            mass market item under    Development Area,
                                            paragraph (b)(3) of       Beijing, China 100176.
                                            section 748.15 of the    Semiconductor
                                            EAR).                     Manufacturing
                                                                      International
                                                                      (Shenzhen) Corporation.
                                                                     Qier Road, Export
                                                                      Processing Zone.
                                                                     Pingshan New Area......
                                                                     Shenzhen, China 518118.
 

[[Page 69538]]

 
                                                  * * * * * * *
                      SK hynix             3B001.a, 3B001.b,         SK hynix Semiconductor   75 FR 62462, 10/12/
                       Semiconductor        3B001.c, 3B001.e, and     (China) Ltd., Lot K7,    10. 77 FR 40258,
                       (China) Ltd.         3B001.f.                  Wuxi High-tech Zone,     7/9/12. 78 FR
                                                                      Comprehensive Bonded     3319, 1/16/13. 78
                                                                      Zone, Wuxi New           FR [INSERT PAGE
                                                                      District, Jiangsu        NUMBER], 11/20/
                                                                      Province, China 214028.  2013.
                      SK hynix             3B001.a, 3B001.b,         SK hynix Semiconductor   75 FR 62462, 10/12/
                       Semiconductor        3B001.c, 3B001.e, and     (Wuxi) Ltd., Lot K7-1,   10. 77 FR 40258,
                       (Wuxi) Ltd.          3B001.f.                  Wuxi High-tech Zone,     7/9/12. 78 FR
                                                                      Comprehensive Bonded     3319, 1/16/13. 78
                                                                      Zone, Wuxi New           FR [INSERT PAGE
                                                                      District, Jiangsu        NUMBER], 11/20/
                                                                      Province, China 214028.  2013.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


    Dated: November 14, 2013.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2013-27809 Filed 11-19-13; 8:45 am]
BILLING CODE 3510-33-P