In an attempt to level the playing field, the Bureau of Industry and Security (BIS) revokes Validated End-User (VEU) waivers that allowed foreign-owned semiconductor facilities in China to import U.S. technology without licenses. Companies such as Samsung and SK Hynix will now be required to obtain licenses for their operations. This move aims to level the playing field for U.S. companies and restrict technological advancements in China’s semiconductor industry.
Closing Loopholes
This action closes loopholes in export controls created during the Biden administration that allowed certain China based companies to export semiconductor manufacturing equipment and technologies without licensing. Under Secretary pf Commerce for Business and Security, Jefferey Kessler, stated that the current administration is committed to closing loopholes that put companies in the United States at a competitive disadvantage.
Validated End-User Program
The VEU program was established by the Department of Commerce Bureau of Industry and Security in June 2007. Its primary goal is to facilitate trade with civilian end users in eligible destinations, allowing certain dual-use items to be exported without a license. This program is voluntary, enabling entities in eligible countries to apply for VEU status. The program was expanded to allow items obtained under VEU authorization in India to be used for military purposes, not just civilian uses.
120 Day Registration Period
There will be a 120 day registration period for former VEU participants to apply for export licenses. There is a general policy for granting former participant to operate existing facilities in China, but there is no intention to allow expansion or upgrades for those facilities.
CVG Strategy Export Compliance Expertise
As the BIS revokes the VEU waivers program, other changes wait in the rafters. Continual changes in the regulatory backdrop demand increased changes in activities for organizations involved in export transactions. This increases the likelihood of a non-egregious violation occurring even in a company with a well-run export compliance program.
If you are part of a large corporation or a small company with a part-time compliance person, CVG Strategy has the compliance and training programs to help you meet International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) rules and requirements. As the BIS place controls on a growing number of technologies it becomes increasing difficult for smaller businesses to stay abreast of regulatory developments. Because of this, we provide Export Compliance Management Programs (ECMP) for businesses of all sizes.
CVG Strategy, LLC is recognized the world over as the premier provider of Export Compliance Consulting and Export Compliance Programs for businesses involved in export in the U.S. and Canada. We also provide the essential training that ensures that your team is up to date on governmental regulations, including the Export Administration Regulations (EAR), the International Traffic in Arms Regulations (ITAR), the Canadian Controlled Goods Program, and Office of Foreign Asset Controls (OFAC) and other regulatory agencies and more.