BIS Removes Cension Facility from Authorized China VEU List
The Bureau of Industry and Security has issued a final rule, effective November 1, 2010, which amends the Export Administration Regulations to remove one facility from the list of Semiconductor Manufacturing International Corporation (SMIC) facilities that are authorized to receive certain items in China under SMIC’s validated end-user (VEU) authorization.
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(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. VEUs may obtain certain eligible commodities, software and technology on the Commerce Control List (except those controlled for missile technology or crime control reasons) without having to wait for their suppliers to obtain export licenses from BIS.
In addition to U.S. exporters, Authorization VEU may be used by foreign reexporters as well as by persons transferring in-country, and does not have an expiration date. Currently, VEUs are located in China and India.)
Cension Removed from SMIC Eligible Facility List
BIS designated SMIC as a VEU in October 2007, thus authorizing certain specific exports, reexports and transfers (in-country) to five listed facilities of the company, including Cension Semiconductor Manufacturing Corporation.
Due to a material change at the Cension facility of SMIC, BIS is amending Supplement No. 7 to 15 CFR Part 748 to remove the Cension facility from that list of SMIC’s approved VEU facilities. Cension’s address (i.e., 3/F, 8-1 Kexin Road, Export Processing Zone (West Area), Chengdu, China 611731) will also be removed from the list of SMIC’s authorized VEU facilities.
License May Now be Required for Exports, Reexports, Transfers to Cension
As a result of this rule, parties seeking to export, reexport or transfer (in-country) items under the EAR to the Cension facility may now have to obtain a license to do so, depending on the item at issue.
BIS notes that this action does not establish any new license requirements, or more restrictive licensing policies, for exports, reexports or transfers (in-country) of items to the Cension facility. Rather, the license requirements set forth in the EAR continue to apply to this facility.
All Conditions/Restrictions for Transactions Prior to Nov. 1 Continue to Apply
This amendment applies only to transactions under Authorization VEU involving SMIC’s Cension facility. All conditions and restrictions that applied to transactions that were undertaken pursuant to Authorization VEU prior to November 1, 2010, and that involve the Cension facility, continue to apply to those transactions.
These restrictions and conditions include any that were imposed on this facility in connection with its eligibility for Authorization VEU, as established by BIS in its communications authorizing the Cension facility’s participation in the VEU program.
SMIC Remains a Qualified VEU Participant, Four Facilities Remain Eligible
BIS notes that this amendment is not the result of prohibited activities by Cension or SMIC. SMIC remains a qualified participant in the VEU program and exports, reexports and transfers (in-country) of the items controlled under the export control classification numbers listed in SMIC’s entry in Supplement No. 7 to 15 CFR Part 748 to the SMIC facilities listed in the same part may continue to be made under Authorization VEU.
BIS' change leaves four SMIC facilities that are approved to receive eligible items under SMIC’s VEU authorization, as follows:
Semiconductor Manufacturing International (Shanghai) Corporation
18 Zhang Jiang Rd.
Pudong New Area
Shanghai, China 201203
Semiconductor Manufacturing International (Tianjin) Corporation
19 Xing Hua Avenue
Xi Qing Economic Development Area
Tianjin, China 300385
Semiconductor Manufacturing International (Beijing) Corporation
No. 18 Wen Chang Road
Beijing Economic-Technological Development Area
Beijing, China 100176
Semiconductor Manufacturing International (Chengdu) Corporation
Assembly and Testing (AT2) Facility
8--8 Kexin Road, Export Processing Zone (West Area)
Chengdu, China 611731
Saving Clause
Shipments of items removed from eligibility for export, reexport or transfer (in-country) under Authorization VEU (i.e., under the designator VEU) as a result of this regulatory action 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 November 1, 2010, 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 November 16, 2010.
Any such items not actually exported, reexported or transferred (in-country) before midnight, on November 16, 2010, require an individual license or other applicable authorization under the EAR.
(See ITT's Online Archives or 10/22/07 news, 07102220, for BP summary of BIS' addition of SMIC as an authorized VEU.
See ITT’s Online Archives or 10/12/10 news, 10101213, for BP summary of BIS’ recent addition of three entities in China to the Authorization VEU list.)
BIS contact - Karen Nies-Vogel (202) 482-3811
(D/N 101006492-0494-02, FR Pub 11/01/10)