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One Entity, One Facility in China Removed from Expedited Dual-Use Export List

Wednesday, November 09, 2011
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued a final rule that, effective Nov. 9, removes one entity from the list of validated end-users in China that are approved to receive exports, reexports and transfers of certain items without a license under authorization VEU. This rule also removes the specified entity and a separate facility from the list of eligible destinations in China under this authorization.

Authorization VEU is a mechanism to facilitate increased high-technology exports to companies in China and India that have a verifiable record of civilian end-uses for such items. End-users qualified as VEUs are eligible to receive a wide range of specified items on the Commerce Control List under this authorization instead of under individual transaction-specific export licenses. Eligible items may include commodities, software and technology, except those controlled for missile technology or crime control reasons.

BIS emphasizes that the amendments it is making are due to material changes in ownership and control and are not the result of activities of concern. This rule also does not establish any new license requirements or licensing policies for exports, reexports or transfers (in-country) of items to the specified entity or facility or any of their facilities. However, parties seeking to export, reexport or transfer (in-country) items under the Export Administration Regulations to this entity or the separate facility may now have to obtain a license to do so depending on the item at issue.

Shipments of items removed from eligibility for export, reexport or transfer (in-country) under authorization VEU as a result of this rule that were on dock for loading, on lighter, laden aboard an exporting carrier or en route aboard a carrier to a port of export on Nov. 9 pursuant to actual orders for export, reexport or transfer (in-country) to an eligible destination may proceed to that destination under the previously applicable authorization so long as they are exported, reexported or transferred (in-country) before Nov. 25. Any such items not actually exported, reexported or transferred (in-country) before midnight on Nov. 25 will require an individual license or other applicable authorization under the EAR.

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