BIS Final Rule Adds First Indian Company as Validated End-User

The Bureau of Industry and Security has issued a final rule, effective July 2, 2009, amending the Export Administration Regulations to list GE India as the first validated end-user in India approved to receive exports, reexports and transfers of certain items under Authorization Validated End-User (VEU).

(In June 2007, BIS issued a final rule establishing a new authorization for VEUs located in eligible destinations to which commodities, software and technology (except those controlled for missile technology (MT) or crime control (CC) reasons) may be exported, reexported or transferred without a license. Although China was the only eligible destination in the final rule, in October 2007, BIS issued a final rule making India eligible for Authorization VEU. In June 2009, BIS approved GE India as the first VEU in India.)

New India VEU, Eligible Items, Eligible Facilities Listed

The final rule amends 15 CFR Part 748, Supplement 7 by listing:

GE India as a VEU for India;

the items (by Export Control Classification Number (ECCN)) that may be exported, reexported or transferred to GE India and its eligible facilities; and

the names and addresses of the GE India facilities to which these items may be exported, reexported or transferred.

Benefits of VEUs Include No BIS Export License, No Expiration Date, Etc.

BIS states that VEUs 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.

Finally, while a VEU authorization may be revised, suspended or revoked pursuant to 15 CFR 748.15(a)(3), it does not have an expiration date, unlike the two-year validity period of an export license.

On-Site Reviews of VEU May be Warranted

To ensure appropriate facilitation of exports and reexports, BIS states that on-site reviews of the VEU may be warranted pursuant to the EAR. If such reviews are warranted, BIS will inform the Government of India, as appropriate.

Approval of New VEU Expected to Facilitate Exports, Enhance Competitiveness

According to BIS, by eliminating the burden of preparing license applications, approving this new end-user as a VEU is expected to further facilitate exports to civil end-users in India and to enhance the competitiveness of U.S. exporters and reexporters as well as end-users.

(BIS has previously stated that additional firms have been encouraged to take advantage of the VEU program.)

(See ITT's Online Archives or 06/22/09 news, 09062215, for BP summary of BIS approving GE India as the first Indian VEU.

See ITT's Online Archives or 10/17/07 and 10/03/07 news, 07101730 and 07100330, for BP summaries of BIS' final rule making India eligible for VEU. See ITT's Online Archives or 01/04/08 news, 08010425, for BP summary of BIS amending the VEU reporting requirements, etc.

See ITT's Online Archives or 06/28/07 news, 07062815, for final part of BP summary of BIS' final rule creating the VEU program, etc., with links to previous parts.)

BIS final rule (D/N 0906151047-91048-01, FR Pub 07/02/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-15649.pdf