International Trade Law News

As a follow-up to yesterday's announcement of the Validated End-User (VEU) Program for India, the Bureau of Industry and Security has posted additional information regarding the program on its website. The information includes the text of the rule, a fact sheet, the press release from the Secretary of Commerce and guidance for submitting to companies on submitting an advisory opinion request to be considered a VEU.

On a separate, but related note, a Commerce Department official today said that the first group of Chinese companies to be approved under the VEU Program will be announced and published in the Federal Register in the next few weeks. While BIS is currently taking more than the 30 calendar days to make VEU determinations, Supplement No. 9 to Part 748 of the EAR makes clear that the 30-day period applies to decisions made by the End-User Review Committee (ERC) after the final application is received and that the period during which the ERC is waiting for additional information from an applicant or potential validated end-user is not included in calculating the 30 calendar day deadline for the ERC's determination.

Labels: BIS, China, India

The Bureau of Industry and Security (BIS) published a final rule in the Federal Register today adding India as an eligible destination for U.S. exports, reexports and transfers under the Authorization Validated End-User (VEU) system. As a result, U.S. companies will be able to export certain controlled commodities and technologies without a license to specific end-users in India, once the end-user is “validated” by the agency. The Authorization VEU may be used for commodity, software or technology exports that require a license, except those that are controlled for missile technology or crime control reasons.

India is the second country named as eligible under the VEU system. On June 19, 2007, BIS rolled out the new authorization scheme for “validated-end users” (VEUs) in eligible country destinations. Concurrently, the BIS designated China as the first eligible country. Although BIS has not announced any Authorized VEUs to date, it intends to do so in the near future.

In order to qualify for Authorization VEU status, an applicant must submit an application to BIS, which includes detailed information about the prospective validated end-user. The specific information required is set forth in Supplement Number 8 to Part 748 of the Export Administration Regulations.

Labels: BIS, India

The Justice Department announced today that Samuel Shangteh Peng, who formerly handled export sales for Endevco Corporation, will plead guilty to five counts of exporting products to a company in India that was on the Bureau of Industry and Security's (BIS) Entity List at the time.

Peng was charged with exporting vibration amplifiers, cable assemblies and vibration processor units in 1999 and 2000 from the U.S. to Hindustan Aeronautics Limited's (HAL) Engine Division in Bangalore, India. HAL was added to the Entity List in November 1998 and removed in 2001. As a result, an export license was required to be obtained from BIS prior to exporting to HAL "all items subject to the EAR".

Peng has agreed to plead guilty to the charges, each of which carries a statutory maximum penalty of 10 years in federal prison.

Labels: BIS, Export Controls, India

The Economic Times of India has reported that the Government of India is planning a new export controls initiative to intercept exports to prohibited end-users and "end-users of concern." According to the report:

The government is planning to ask a core group on proliferation that consists of ministries of home affairs, defence and external affairs to draw up a list of ‘end users of concern.’ This will be based on global trends in proliferation of weapons of mass destruction, information from other countries and UN Security Council resolutions. The list will be shared with all customs and port authorities.

The government will authorise the customs department through a notification to stop any export consignment to these business houses. Once intercepted, the exporter would be told that he should seek a license to go ahead with the export. The application will be approved or rejected within a specified time frame, possibly, two weeks, it is understood. The government is likely to work with associations of biotech companies, chemicals makers and aerospace manufacturers to create awareness.

Labels: Export Controls, India