2013-16525. Additions to the List of Validated End-Users in the People's Republic of China: Samsung China Semiconductor Co. Ltd. and Advanced Micro-Fabrication Equipment, Inc., 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 to add two end-users in the People's Republic of China to the list of Validated End-Users (VEU). Specifically, BIS amends Supplement No. 7 to part 748 of the EAR to add Samsung China Semiconductor Co. Ltd. (Samsung China) and Advanced Micro-Fabrication Equipment, Inc., China (AMEC) as VEUs. With this rule, exports, reexports and transfers (in-country) of certain items to one Samsung China facility and one AMEC facility are now authorized under Authorization VEU.

DATES:

This rule is effective July 10, 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: [phone], fax: [phone], or email: [e-mail].

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 date they were so designated, and their respective eligible destinations and items are identified in Supplement No. 7 to part 748 of the 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 Export Administration Regulations (EAR) in a final rule published on June 19, 2007 (72 FR 33646) to create Authorization VEU.

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

Addition of Samsung China Semiconductor Co. Ltd. to the List of Validated End-Users in the PRC and Its “Eligible Destinations” and “Eligible Items (By ECCN)”

This final rule amends Supplement No. 7 to part 748 of the EAR to add Samsung China Semiconductor Co. Ltd. (Samsung China) as a VEU, and to identify its eligible facility and the items that may be exported, reexported or transferred (in-country) to Samsung China under Authorization VEU, effective the date of this rule. The names and addresses of this newly-appointed VEU and its eligible end-user are as follows:

Validated End-User:

Samsung China Semiconductor Co. Ltd., City Gate #1, Jinye Road, Xi'an, People's Republic of China 710065.

Eligible Destination:

Samsung China Semiconductor Co. Ltd., Xinglong Street, Chang'an District, Xi'an, People's Republic of China 710065.

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:

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.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).

Addition of Advanced Micro-Fabrication Equipment, Inc., China to the List of Validated End-Users in the PRC and Its “Eligible Destinations” and “Eligible Items (By ECCN)”

This final rule also amends Supplement No. 7 to part 748 of the EAR to add Advanced Micro-Fabrication Equipment, Inc., China (AMEC) as a VEU, and to identify its eligible facility and the items that may be exported, reexported or transferred (in-country) to AMEC under Authorization VEU, effective the date of this rule. The names and addresses of this newly-appointed VEU and its eligible end-user are as follows:

Validated End-User:

Advanced Micro-Fabrication Equipment, Inc., China, 188 Taihua Road, Jinqiao Export Processing Zone (South Area), Pudong, Shanghai 201201, China.

Eligible Destination:

Advanced Micro-Fabrication Equipment, Inc., China, 188 Taihua Road, Jinqiao Export Processing Zone (South Area), Pudong, Shanghai 201201, China.

Eligible Items (by ECCN) That May Be Exported, Reexported or Transferred (In-Country) to the Eligible Destination Identified Under Advanced Micro-Fabrication Equipment, Inc. Validated End-User Authorization

Export Control Classification Numbers (ECCNs) 2B230, 3B001.c and 3B001.e (items classified under ECCNs 3B001.c and 3B001.e are limited to components and accessories).

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 Samsung China and AMEC as VEUs, exporters and reexporters can supply Samsung China and AMEC much more quickly, thus enhancing the competitiveness of both the VEU and its suppliers of U.S-origin items.

To ensure appropriate facilitation of exports and reexports, on-site reviews of VEUs, including Samsung China and AMEC, may be warranted pursuant to Section 748.15(f)(2) of the EAR and Section 7(iv) of Supplement No. 8 to part 748 of the EAR. If such a review is warranted, BIS will inform the PRC Ministry of Commerce.

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 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 15, 2012, 77 FR 49699 (August 16, 2012), 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, 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 merely adds to the list of VEUs and the respective eligible items and destinations 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 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 two new end-users 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

Dated: July 3, 2013.

Kevin J. Wolf,

Assistant Secretary for Export Administration.

Accordingly, part 748 of the EAR (15 CFR parts 730-774) is amended as follows:

PART 748—[AMENDED]

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 15, 2012, 77 FR 49699 (August 16, 2012).

2. Amend Supplement No. 7 to part 748 to add in alphabetical order entries for “Advanced Micro-Fabrication Equipment, Inc., China” and “Samsung China Semiconductor Co. 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, and Eligible Destinations

Country	Validated end-user	Eligible items (by ECCN)	Eligible destination	Federal Register citation
Nothing in this Supplement shall be deemed to supersede other provisions in the EAR, including but not limited to § 748.15(c).
*         *         *         *         *         *         *
	Advanced Micro-Fabrication Equipment, Inc., China	2B230, 3B001.c and 3B001.e (items classified under ECCNs 3B001.c and 3B001.e are limited to components and accessories)	Advanced Micro-Fabrication Equipment, Inc., China, 188 Taihua Road, Jinqiao Export Processing Zone (South Area), Pudong, Shanghai 201201, China	78 FR [INSERT PAGE NUMBER], 7/10/13.
*         *         *         *         *         *         *
	Samsung China Semiconductor Co. Ltd	1C350.c.3, 1C350.d.7, 2B230, 2B350.d.2, 2B350.g.3, 2B350.i.4, 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)	Samsung China Semiconductor Co. Ltd., Xinglong Street, Chang'an District, Xi'an, People's Republic of China 710065	78 FR [INSERT PAGE NUMBER], 7/10/13.
*         *         *         *         *         *         *