2010-11574. Revisions to the Authorization for Validated End-User Applied Materials China, Ltd.

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to update the name of an existing validated end-user in the People's Republic of China (PRC) and revise the associated list of eligible items and facilities for that validated end-user. BIS previously approved Applied Materials China, Ltd. (Applied) as a validated end-user, authorizing exports, reexports and transfers (in-country) of certain items to four Applied facilities in the PRC under Authorization Validated End-User (VEU). In addition to updating Applied's name, this rule revises the names and addresses of Applied's four previously approved facilities. This rule also authorizes three additional Applied facilities, which are added to the list of Applied's eligible destinations. Finally, this rule revises the list of Export Control Classification Numbers (ECCNs) for items that may be exported, reexported or transferred (in-country) to the eligible Applied facilities.

DATES:

This rule is effective May 14, 2010. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis.

ADDRESSES:

You may submit comments, identified by RIN 0694-AE86, by any of the following methods:

• E-mail: [e-mail]. Include “RIN 0694-AE86” in the subject line of the message.
• Fax: [phone]. Please alert the Regulatory Policy Division, by calling [phone], if you are faxing comments.
• Mail or Hand Delivery/Courier: Sheila Quarterman, U.S. Department of Commerce, Bureau of Industry and Security, Regulatory Policy Division, 14th Street & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: RIN 0694-AE86.

Send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden to Jasmeet Seehra, Office of Management and Budget (OMB), by e-mail to [e-mail] or by fax to [phone]. Comments on this collection of information should be submitted separately from comments on the final rule (i.e., RIN 0694-AE86)—all comments on the latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT:

Susan Kramer, Acting 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], or by e-mail to [e-mail].

SUPPLEMENTARY INFORMATION:

Background

Authorization Validated End-User (VEU): The List of Approved End-Users, Eligible Items and Destinations in the People's Republic of China

Consistent with U.S. Government policy to facilitate trade for civilian end-users in the PRC, BIS amended the EAR in a final rule on June 19, 2007 (72 FR 33646) by creating a new authorization for “validated end-users” located in eligible destinations to which eligible items may be exported, reexported or transferred under a general authorization instead of a license, in conformance with Section 748.15 of the EAR. Eligible items may include commodities, software and technology, except those controlled for missile technology or crime control reasons.

Authorization VEU is a mechanism to facilitate increased high-technology exports to companies in eligible destinations that have a verifiable record of civilian uses for such items. The validated end-users 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. Currently, validated end-users are located in the People's Republic of China (PRC) and India. Validated end-users may obtain eligible items that are on the Commerce Control List without having to wait for their suppliers to obtain export licenses from BIS. A wide range of items are eligible for shipment under Authorization VEU. In addition to U.S. exporters, Authorization VEU may be used by foreign reexporters, and does not have an expiration date.

Revision to the Name of Validated End-User Applied Materials China, Ltd. and to the Related List of Respective “Eligible Items (By ECCN)” and “Eligible Destination”

This final rule amends Supplement No. 7 to Part 748 of the EAR to update the name of Applied Materials China, Ltd. to Applied Materials (China), Inc. (Applied). This rule also amends the related list of Export Control Classification Numbers (ECCNs) for items that may be exported, reexported or transferred (in-country) to eligible facilities of Applied in the PRC. This rule also updates the names and addresses of Applied's four previously approved facilities, and authorizes three additional Applied facilities. The revised information associated with Applied in Supplement No. 7 is as follows:

Validated End-User

Applied Materials (China), Inc.

ECCNs and Revised Respective Facility Names and Addresses

Items classified under ECCNs 2B006.b, 2B230, 2B350.g.3, 2B350.i, 3B001.b, 3B001.c, 3B001.d, 3B001.e, 3B001.f, 3C001, 3C002, 3D002 (limited to “software” specially designed for the “use” of stored program controlled items classified under ECCN 3B001) may be exported, reexported and transferred (in-country) to all Applied destinations below other than Applied Materials (Xi'an) Ltd.

Applied Materials South East Asia Pte. Ltd.—Shanghai Depot, c/o Shanghai Applied Materials Technical Service Center, No. 2667 Zuchongzhi Road, Shanghai, China 201203.

Applied Materials South East Asia Pte. Ltd.—Beijing Depot, c/o Beijing Applied Materials Technical Service Center, No. 1 North Di Sheng Street, BDA, Beijing, China 100176.

Applied Materials South East Asia Pte. Ltd.—Wuxi Depot, c/o Sinotrans Jiangsu Fuchang Logistics Co., Ltd., 1 Xi Qin Road, Wuxi Export Processing Zone, Wuxi, Jiangsu, China 214028.

Applied Materials South East Asia Pte. Ltd.—Wuhan Depot, c/o Wuhan Optics Valley Import & Export Co., Ltd., No. 101 Guanggu Road, East Lake High-Tec Development Zone, Wuhan, Hubei, China 430074.

Applied Materials (China), Inc.—Shanghai Depot, No. 2667 Zuchongzhi Road, Shanghai, China 201203.

Applied Materials (China), Inc.—Beijing Depot, No. 1 North Di Sheng Street, BDA, Beijing, China 100176.

Items classified under ECCNs 2B006.b, 2B230, 2B350.g.3, 2B350.i, 3B001.b, 3B001.c, 3B001.d, 3B001.e, 3B001.f, 3C001, 3C002, 3D002 (limited to “software” specially designed for the “use” of stored program controlled items classified under ECCN 3B001), and 3E001 (limited to “technology” according to the General Technology Note for the “development” or “production” of items controlled by ECCN 3B001) may be exported, reexported and transferred (in-country) to Applied destination Applied Materials (Xi'an) Ltd. only as listed below.

Applied Materials (Xi'an) Ltd., No. 28 Xin Xi Ave., Xi'an High Tech Park, Export Processing Zone, Xi'an, Shaanxi, China 710075.

Prior to this rule, facilities in the PRC cities of Shanghai, Beijing, Wuxi and Xi'an had been approved as eligible destinations for Applied. This rule modifies the addresses and names of the facilities in Shanghai, Beijing and Wuxi, and slightly modifies the name of the facility in Xi'an. Further, this rule authorizes three additional Applied facilities located in Beijing, Shanghai, and Wuhan to the list of eligible destinations associated with Applied under Authorization VEU. In addition, this rule expands the eligible items authorized for export, reexport, or transfer (in-country) to Applied's facilities to include items classified under ECCNs 2B006.b and 3B001.b, .c, and .f. The rule also adds items classified under ECCNs 2B350.i., 3B001.d, and certain items classified under ECCN 3D002. In addition, certain items classified under ECCN 3E001 are added to the list of eligible items for Applied's Xi'an facility only. These changes were made based on an application submitted to BIS, which was reviewed by the interagency End-User Review Committee.

Making the above-described changes for this validated end-user is expected to further facilitate exports to civil end-users in the PRC, and is expected to result in a significant savings of time and resources for suppliers and the eligible facilities. Authorization VEU will eliminate the burden on exporters and reexporters of preparing individual license applications, as exports, reexports and transfers (in-country) of eligible items to these facilities may now be made under general authorization instead of under individual licenses. Exporters and reexporters may now supply validated end-users much more quickly, thus enhancing the competitiveness of the exporters, reexporters, and end-users in the PRC.

To ensure appropriate facilitation of exports and reexports, on-site reviews of the validated end-users may be warranted pursuant to paragraph 748.15(f)(2) and Section 7(iv) of Supplement No. 8 to Part 748 of the EAR. If such reviews are warranted, BIS will inform the PRC Ministry of Commerce.

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 extended most recently by the Notice of August 13, 2009 (74 FR 41325 (August 14, 2009)), 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. This final rule has been determined to be not significant for the purposes of Executive Order 12866.

2. 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 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 rule involves collections previously approved by the 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 Validated End-User, 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 and Office of Management and Budget control number 0694-0088 are not expected to increase significantly as a result of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

4. Pursuant to 5 U.S.C. 553(a)(1), notice of proposed rulemaking, the opportunity for public participation and a delay in effective date are inapplicable because this regulation involves a military and foreign affairs function of the United States. Further, 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 to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Sheila Quarterman, Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, 14th Street & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230.

List of Subjects in 15 CFR Part 748

• Administrative practice and procedure
• Exports
• Reporting and recordkeeping requirements

Accordingly, part 748 of the Export Administrative Regulations (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 13, 2009, 74 FR 41325 (August 14, 2009).

2. Supplement No. 7 to Part 748 is amended by revising the entry for Applied Materials China, Ltd., a validated end-user 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
*         *         *         *         *         *         *
China (People's Republic of)	Applied Materials (China), Inc	2B006.b, 2B230, 2B350.g.3, 2B350.i, 3B001.b, 3B001.c, 3B001.d, 3B001.e, 3B001.f, 3C001, 3C002, 3D002 (limited to “software” specially designed for the “use” of stored program controlled items classified under ECCN 3B001)	Applied Materials South East Asia Pte. Ltd.—Shanghai Depot c/o Shanghai Applied Materials Technical Service Center No. 2667 Zuchongzhi Road, Shanghai, China 201203.
			Applied Materials South East Asia Pte. Ltd.—Beijing Depot c/o Beijing Applied Materials Technical Service Center No. 1 North Di Sheng Street, BDA Beijing, China 100176.
			Applied Materials South East Asia Pte. Ltd.—Wuxi Depot c/o Sinotrans Jiangsu Fuchang Logistics Co., Ltd. 1 Xi Qin Road, Wuxi Export Processing Zone Wuxi, Jiangsu, China 214028.
			Applied Materials South East Asia Pte. Ltd.—Wuhan Depot c/o Wuhan Optics Valley Import & Export Co., Ltd. No. 101 Guanggu Road East Lake High-Tec Development Zone Wuhan, Hubei, China 430074.
			Applied Materials (China), Inc.—Shanghai Depot No. 2667, Zuchongzhi Road Shanghai, China 201203.
			Applied Materials (China), Inc.—Beijing Depot No. 1 North Di Sheng Street, BDA Beijing, China 100176.
		2B006.b, 2B230, 2B350.g.3, 2B350.i, 3B001.b, 3B001.c, 3B001.d, 3B001.e, 3B001.f, 3C001, 3C002, 3D002 (limited to “software” specially designed for the “use” of stored program controlled items classified under ECCN 3B001), and 3E001 (limited to “technology” according to the General Technology Note for the “development” or “production” of items controlled by ECCN 3B001).	Applied Materials (Xi'an) Ltd. No. 28 Xin Xi Ave., Xi'an High Tech Park Export Processing Zone Xi'an, Shaanxi, China 710075.
*         *         *         *         *         *         *

Dated: May 6, 2010.

Kevin J. Wolf,

Assistant Secretary for Export Administration.