BIS Announces Approval of Five Chinese Companies for VEU Program

October 21, 2007

On October 18, 2007, the Department of Commerce's Bureau of Industry and Security (BIS) announced that five companies in China have been approved as part of the Validated End-User Program which removes individual license requirements on exports of certain US-controlled items and helps boost high technology trade while maintaining a secure U.S. export system.

The list of approved companies includes Applied Materials China, Boeing Hexcel AVIC I Joint Venture, National Semiconductor Corporation, Semiconductor Manufacturing International Corporation and Shanghai Hua Hong NEC Corporation. In 2006, these companies imported nearly $54.3 million dollars worth of U.S. goods under licenses and accounted for about 18% of the total licensed exports to China.  This program allows U.S. companies to better compete in China, particularly in trade sectors where foreign competitors are already selling similar items.  Validated End Users 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.  Sectors likely to benefit from the VEU program include electronics, semiconductor equipment, and chemicals.

BIS recently added India as an eligible destination for exports, reexports and transfers under the Validated End-User program.  This designation was built upon advances made in the U.S.-India High Technology Cooperation Group (HCTG) and the Next Steps in Strategic Partnership (NSSP).  According to BIS, excellent cooperation in these fora has enabled the United States to reduce controls on the export of certain dual-use items to India.  On October 16, 2007, the President signed legislation increasing penalties for export violations (See Barnes/Richardson story on this legislation here).

BIS, which is part of the Department of Commerce, promotes continued U.S. strategic technology leadership and advances national security, foreign policy and economic objectives be ensuring an effective dual-use export control and treaty compliance system.

Background information and analysis of the VEU program may be obtained here.