BIS Proposes to Add Notification Requirement for Export Under Authorization VEU
The Bureau of Industry and Security is seeking comments by June 18, 2012, on a proposed rule that would amend the Export Administration Regulations (EAR) by (i) adding a requirement for persons shipping under Authorization Validated End-User to send written notice of such shipments to the recipient VEU; (ii) saying that item-specific conditions under Authorization VEU no longer apply when such items no longer require licenses or become eligible under a license exception; and (iii) for such items, VEUs are still subject to the recordkeeping requirements for items shipped before removal of the license requirement or addition of the license exception.
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Proposed Requirement that Exporters Notify VEUs of Shipments
BIS proposes to amend the EAR at 15 CFR 748.15 (Authorization Validated End-User) by adding a paragraph that would require persons exporting, reexporting, or transferring (in-country) under Authorization VEU to send written notification to the recipient VEU with details about their shipment within 7 days of the shipment.
Details of the shipment that would be required in the notification include:
- A list of the contents of the shipment
- the quantity of items that have been or will be shipped to the respective VEUs under Authorization VEU
- a list of the applicable Export Control Classification Numbers (ECCNs)
Notification would be in writing. The new paragraph would not mandate the form of communication (e.g., fax, email, letter) for the notification, but does require that the notification be in a written format.
Must be maintained in records. Exporters, reexporters, and VEUs would be required to maintain the notifications they receive pursuant to their recordkeeping requirements.
(BIS said it is proposing this change at the request of VEUs. Some VEUs have informed BIS that compliance is challenging when they receive items under multiple authorizations because, as items may be shipped to VEUs under different forms of authorization (e.g., individual licenses, Special Comprehensive Licenses, and Authorization VEU), VEUs may receive items classified under the same ECCN but shipped under more than one form of authorization. As such, these VEUs had difficulty determining which authorization is used for each shipment.)
Regulations Would Specify Effects of Termination of Conditions on VEU Authorizations
The proposal would add another paragraph to 15 CFR 175.15 that would say that VEUs who are subject to item-specific conditions and have received items subject to such conditions under Authorization VEU would not longer be bound by the conditions associated with the items if the items no longer require a license for export or reexport to China or India (depending on the VEU’s location) or become eligible for shipment under a license exception to the destination.
In addition, a new paragraph would be added to the same section to remind exporters that records requirements for shipments that were made under Authorization VEU prior to the removal of a license requirement or the availability of a license exception remain subject to the review / recordkeeping requirements of 15 CFR 748.15(f)(2) on and after the date that the license requirement was removed or the license exception became applicable.