81_FR_87659 81 FR 87426 - Amendment to the Export Administration Regulations: Removal of Semiconductor Manufacturing International Corporation From the List of Validated End-Users in the People's Republic of China

81 FR 87426 - Amendment to the Export Administration Regulations: Removal of Semiconductor Manufacturing International Corporation From the List of Validated End-Users in the People's Republic of China

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 81, Issue 233 (December 5, 2016)

Page Range87426-87427
FR Document2016-29057

In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to remove one end-user from the list of validated end-users in the People's Republic of China (PRC). Specifically, BIS amends Supplement Number 7 to part 748 of the EAR to remove the Semiconductor Manufacturing International Corporation (SMIC) as a validated end-user in the PRC. BIS makes this change at the company's request, and not in response to activities of concern.

Federal Register, Volume 81 Issue 233 (Monday, December 5, 2016) 
[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)]
[Rules and Regulations]
[Pages 87426-87427]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29057]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 161005927-6927-01]
RIN 0694-AH16


Amendment to the Export Administration Regulations: Removal of 
Semiconductor Manufacturing International Corporation From the List of 
Validated End-Users in the People's Republic of China

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) to remove one end-user from 
the list of validated end-users in the People's Republic of China 
(PRC). Specifically, BIS amends Supplement Number 7 to part 748 of the 
EAR to remove the Semiconductor Manufacturing International Corporation 
(SMIC) as a validated end-user in the PRC. BIS makes this change at the 
company's request, and not in response to activities of concern.

DATES: This rule is effective December 5, 2016.

FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, 
Office of the Assistant Secretary, Export Administration, Bureau of 
Industry and Security, U.S. Department of Commerce, Phone: 202-482-
5991; Email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

Authorization Validated End-User

    Validated end-users (VEUs) are designated entities located in 
eligible destinations to which eligible items may be exported, 
reexported, or transferred (in-country) under a general authorization 
instead of a license. The names of the VEUs, as well as the dates they 
were so designated, and their respective eligible destinations 
(facilities) and items are identified in Supplement No. 7 to part 748 
of the EAR (15 CFR part 748). Under the terms described in that 
supplement, and in conformity with section 748.15 of the EAR, VEUs may 
obtain eligible items without an export license from BIS. Eligible 
items vary between VEUs, and may include commodities, software, and 
technology, except items controlled for missile technology or crime 
control reasons on the Commerce Control List (CCL) (part 774 of the 
EAR).
    VEUs are reviewed and approved by the U.S. Government in accordance 
with the provisions of section 748.15 and Supplement Nos. 8 and 9 to 
part 748 of the EAR. The End-User Review Committee (ERC), composed of 
representatives from the Departments of State, Defense, Energy, 
Commerce, and other agencies, as appropriate, is responsible for 
administering the VEU program. BIS amended the EAR in a final rule 
published on June 19, 2007 (72 FR 33646), to create Authorization VEU.

Amendment to the List of Validated End Users (VEU) in the People's 
Republic of China (PRC)

Removal of the Semiconductor Manufacturing International Corporation 
(SMIC) From the List of VEUs in the PRC

    In this final rule, BIS amends Supplement No. 7 to part 748 of the 
EAR (Supplement No. 7) to remove the VEU SMIC from the list of VEUs in 
the PRC. Specifically, BIS removes information for SMIC from Supplement 
No. 7. BIS takes this action at SMIC's request. BIS makes this change 
to Supplement No. 7 at the company's request and not in response to 
activities of concern.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of 
August 4, 2016, 81 FR 52587 (August 8, 2016), has continued the EAR in 
effect under the International Emergency Economic Powers Act. BIS 
continues to carry out the provisions of the Export Administration Act, 
as appropriate and to the extent permitted by law, pursuant to 
Executive Order 13222 as amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This rule has been determined to be not significant for purposes of 
Executive Order 12866.
    2. This rule involves collections previously approved by the Office 
of Management and Budget (OMB) under Control Number 0694-0088, ``Multi-
Purpose Application,'' which carries a burden hour estimate of 43.8 
minutes to prepare and submit form BIS-748; and for recordkeeping, 
reporting and review requirements in connection with Authorization VEU, 
which carries an estimated burden of 30 minutes per submission. Total 
burden hours associated with the Paperwork

[[Page 87427]]

Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA) and OMB Control 
Number 0694-0088 are not expected to increase significantly as a result 
of this rule. Notwithstanding any other provisions of law, no person is 
required to respond to, nor be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the PRA, unless that collection of information displays a currently 
valid OMB Control Number.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(b)(B), BIS finds good cause to waive requirements that this rule be 
subject to notice and the opportunity for public comment because they 
are unnecessary. In determining whether to grant or remove VEU 
designations, a committee of U.S. Government agencies evaluates 
information about and commitments made by candidate companies, the 
nature and terms of which are set forth in 15 CFR part 748, Supplement 
Nos. 8 and 9. The criteria for evaluation by the committee are set 
forth in 15 CFR 748.15(a)(2) and the authority to remove VEU 
designations is contained in 15 CFR 748.15(a)(3). The information, 
commitments, and criteria for this extensive review were all 
established through the notice of proposed rulemaking and public 
comment process (71 FR 38313 (July 6, 2006) (proposed rule), and 72 FR 
33646 (June 19, 2007) (final rule)). In publishing this final rule, BIS 
removes a VEU from the list of VEUs in the PRC, at the request of the 
VEU, similar to past requests by other VEUs, approved by the End-User 
Review Committee. This change has been made within the established 
regulatory framework of the VEU program. Further, this rule does not 
abridge the rights of the public or eliminate the public's option to 
export under any of the forms of authorization set forth in the EAR.
    Publication of this rule in other than final form is unnecessary 
because the procedure for revocation of a VEU or facility from the 
Authorized VEU list is similar to the license revocation procedure, 
which does not undergo public review. During the VEU revocation 
procedure, the U.S. Government analyzes confidential business 
information according to set criteria to determine whether a given 
authorized VEU entity remains eligible for VEU status. Revocation may 
be the result of a material change in circumstance at the VEU or the 
VEU's authorized facility. Such changes may be the result of a VEU or 
VEU facility no longer meeting the eligibility criteria for 
Authorization VEU, and may thus lead the U.S. Government to modify or 
revoke VEU authorization. VEUs or VEU facilities that undergo material 
changes that result in their no longer meeting the criteria to be 
eligible VEUs must, according to the VEU program, have their VEU status 
revoked. Here, however, SMIC requested removal from the VEU program. 
Consequently, BIS is removing SMIC from the list of VEUs. Public 
comment on whether to make the removal is unnecessary.
    Section 553(d) of the APA generally provides that rules may not 
take effect earlier than thirty (30) days after they are published in 
the Federal Register. However, BIS finds good cause to waive the 30-day 
delay in effectiveness for this rule pursuant to 5 U.S.C. 553(d)(3) 
because the delay would be contrary to the public interest. BIS is 
simply removing SMIC as a VEU. In this rule, BIS amends the EAR 
consistent with established objectives and parameters administered and 
enforced by the responsible designated departmental representatives to 
the End-User Review Committee. Delaying this action's effectiveness 
would likely cause confusion regarding which items are authorized by 
the U.S. government, and in turn stifle the purpose of the VEU program. 
Accordingly, it would be contrary to the public interest to delay this 
rule's effectiveness.
    No other law requires that a notice of proposed rulemaking and an 
opportunity for public comment be given for this final rule. Because a 
notice of proposed rulemaking and an opportunity for public comment are 
not required under the APA or by any other law, the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601et seq.) 
are not applicable. As a result, no final regulatory flexibility 
analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

    Accordingly, part 748 of the EAR (15 CFR parts 730-774) is amended 
as follows:

PART 748--[AMENDED]

0
1. The authority citation for part 748 continues to read as follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 
13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 
44025, 3 CFR, 2001 Comp., p. 783; Notice of August 4, 2016, 81 FR 
52587 (August 8, 2016).

Supplement No. 7 to Part 748--[AMENDED]

0
2. Amend Supplement No. 7 to Part 748 by removing the entire entry for 
``Semiconductor Manufacturing International Corporation,'' in ``China 
(People's Republic of)''.

    Dated: November 23, 2016.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-29057 Filed 12-2-16; 8:45 am]
BILLING CODE 3510-33-P

87426 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations PART 747—[REMOVED AND Export Administration Regulations Amendment to the List of Validated RESERVED] (EAR) to remove one end-user from the End Users (VEU) in the People’s list of validated end-users in the Republic of China (PRC) ■ 3. Remove and reserve part 747. People’s Republic of China (PRC). Removal of the Semiconductor PART 748—[AMENDED] Specifically, BIS amends Supplement Manufacturing International Number 7 to part 748 of the EAR to Corporation (SMIC) From the List of ■ 4. The authority citation for part 748 remove the Semiconductor VEUs in the PRC continues to read as follows: Manufacturing International In this final rule, BIS amends Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. Corporation (SMIC) as a validated end- Supplement No. 7 to part 748 of the 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, user in the PRC. BIS makes this change EAR (Supplement No. 7) to remove the 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, at the company’s request, and not in VEU SMIC from the list of VEUs in the 3 CFR, 2001 Comp., p. 783; Notice of August response to activities of concern. 4, 2016, 81 FR 52587 (August 8, 2016). PRC. Specifically, BIS removes DATES: This rule is effective December 5, information for SMIC from Supplement § 748.1 [Amended] 2016. No. 7. BIS takes this action at SMIC’s ■ 5. Section 748.1 is amended by request. BIS makes this change to FOR FURTHER INFORMATION CONTACT: Supplement No. 7 at the company’s removing the parenthetical phrase ‘‘(other than Special Iraq Reconstruction Chair, End-User Review Committee, request and not in response to activities License applications)’’ from the first Office of the Assistant Secretary, Export of concern. sentence of paragraph (d). Administration, Bureau of Industry and Export Administration Act Security, U.S. Department of Commerce, § 748.7 [Amended] Phone: 202–482–5991; Email: ERC@ Although the Export Administration ■ 6. Section 748.7 is amended by bis.doc.gov. Act expired on August 20, 2001, the removing the parenthetical phrase President, through Executive Order ‘‘(other than Special Iraq Reconstruction SUPPLEMENTARY INFORMATION: 13222 of August 17, 2001, 3 CFR, 2001 Licenses)’’ from paragraphs (a) and (d). Comp., p. 783 (2002), as amended by Background Executive Order 13637 of March 8, PART 762—[AMENDED] Authorization Validated End-User 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August ■ 7. The authority citation for part 762 Validated end-users (VEUs) are 4, 2016, 81 FR 52587 (August 8, 2016), continues to read as follows: designated entities located in eligible has continued the EAR in effect under Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. destinations to which eligible items may the International Emergency Economic 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, be exported, reexported, or transferred Powers Act. BIS continues to carry out 2001 Comp., p. 783; Notice of August 4, (in-country) under a general the provisions of the Export 2016, 81 FR 52587 (August 8, 2016). authorization instead of a license. The Administration Act, as appropriate and § 762.2 [Amended] names of the VEUs, as well as the dates to the extent permitted by law, pursuant they were so designated, and their to Executive Order 13222 as amended ■ 8. Section 762.2 is amended by by Executive Order 13637. respective eligible destinations removing and reserving paragraph (facilities) and items are identified in Rulemaking Requirements (b)(17). Supplement No. 7 to part 748 of the Dated: November 23, 2016. 1. Executive Orders 13563 and 12866 EAR (15 CFR part 748). Under the terms Kevin J. Wolf, direct agencies to assess all costs and described in that supplement, and in benefits of available regulatory Assistant Secretary for Export conformity with section 748.15 of the Administration. alternatives and, if regulation is EAR, VEUs may obtain eligible items necessary, to select regulatory [FR Doc. 2016–29056 Filed 12–2–16; 8:45 am] without an export license from BIS. BILLING CODE 3510–33–P approaches that maximize net benefits Eligible items vary between VEUs, and (including potential economic, may include commodities, software, and environmental, public health and safety DEPARTMENT OF COMMERCE technology, except items controlled for effects, distributive impacts, and missile technology or crime control equity). Executive Order 13563 Bureau of Industry and Security reasons on the Commerce Control List emphasizes the importance of (CCL) (part 774 of the EAR). quantifying both costs and benefits, 15 CFR Part 748 VEUs are reviewed and approved by reducing costs, harmonizing rules, and [Docket No. 161005927–6927–01] the U.S. Government in accordance with promoting flexibility. This rule has been the provisions of section 748.15 and determined to be not significant for RIN 0694–AH16 purposes of Executive Order 12866. Supplement Nos. 8 and 9 to part 748 of 2. This rule involves collections Amendment to the Export the EAR. The End-User Review previously approved by the Office of Administration Regulations: Removal Committee (ERC), composed of Management and Budget (OMB) under of Semiconductor Manufacturing representatives from the Departments of Control Number 0694–0088, ‘‘Multi- International Corporation From the List State, Defense, Energy, Commerce, and Purpose Application,’’ which carries a of Validated End-Users in the People’s other agencies, as appropriate, is burden hour estimate of 43.8 minutes to sradovich on DSK3GMQ082PROD with RULES Republic of China responsible for administering the VEU prepare and submit form BIS–748; and program. BIS amended the EAR in a for recordkeeping, reporting and review AGENCY: Bureau of Industry and final rule published on June 19, 2007 requirements in connection with Security, Commerce. (72 FR 33646), to create Authorization Authorization VEU, which carries an ACTION: Final rule. VEU. estimated burden of 30 minutes per SUMMARY: In this rule, the Bureau of submission. Total burden hours Industry and Security (BIS) amends the associated with the Paperwork VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1

Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations 87427 Reduction Act of 1995 (44 U.S.C. 3501 be the result of a VEU or VEU facility Supplement No. 7 to Part 748— et seq.) (PRA) and OMB Control Number no longer meeting the eligibility criteria [AMENDED] 0694–0088 are not expected to increase for Authorization VEU, and may thus significantly as a result of this rule. ■ 2. Amend Supplement No. 7 to Part lead the U.S. Government to modify or Notwithstanding any other provisions of 748 by removing the entire entry for revoke VEU authorization. VEUs or VEU law, no person is required to respond to, ‘‘Semiconductor Manufacturing facilities that undergo material changes nor be subject to a penalty for failure to International Corporation,’’ in ‘‘China that result in their no longer meeting the comply with a collection of information (People’s Republic of)’’. criteria to be eligible VEUs must, subject to the requirements of the PRA, according to the VEU program, have Dated: November 23, 2016. unless that collection of information their VEU status revoked. Here, Kevin J. Wolf, displays a currently valid OMB Control however, SMIC requested removal from Assistant Secretary for Export Number. the VEU program. Consequently, BIS is Administration. 3. This rule does not contain policies removing SMIC from the list of VEUs. [FR Doc. 2016–29057 Filed 12–2–16; 8:45 am] with Federalism implications as that Public comment on whether to make the BILLING CODE 3510–33–P term is defined under Executive Order removal is unnecessary. 13132. Section 553(d) of the APA generally 4. Pursuant to the Administrative provides that rules may not take effect DEPARTMENT OF STATE Procedure Act (APA), 5 U.S.C. earlier than thirty (30) days after they 553(b)(B), BIS finds good cause to waive are published in the Federal Register. 22 CFR Parts 120, 121, 122, 124, 126 requirements that this rule be subject to However, BIS finds good cause to waive and 127 notice and the opportunity for public the 30-day delay in effectiveness for this comment because they are unnecessary. [Public Notice: 9757] rule pursuant to 5 U.S.C. 553(d)(3) In determining whether to grant or because the delay would be contrary to RIN 1400–AE05 remove VEU designations, a committee the public interest. BIS is simply of U.S. Government agencies evaluates removing SMIC as a VEU. In this rule, Amendment to the International Traffic information about and commitments BIS amends the EAR consistent with in Arms Regulations: Corrections and made by candidate companies, the established objectives and parameters Clarifications nature and terms of which are set forth administered and enforced by the in 15 CFR part 748, Supplement Nos. 8 AGENCY:Department of State. responsible designated departmental and 9. The criteria for evaluation by the Final rule; request for ACTION: representatives to the End-User Review committee are set forth in 15 CFR comments. Committee. Delaying this action’s 748.15(a)(2) and the authority to remove effectiveness would likely cause SUMMARY: The Department of State is VEU designations is contained in 15 confusion regarding which items are amending the International Traffic in CFR 748.15(a)(3). The information, authorized by the U.S. government, and Arms Regulations (ITAR) to clarify commitments, and criteria for this in turn stifle the purpose of the VEU extensive review were all established recent revisions made pursuant to the program. Accordingly, it would be President’s Export Control Reform (ECR) through the notice of proposed contrary to the public interest to delay rulemaking and public comment initiative. This rule clarifies the scope of this rule’s effectiveness. disclosure of information submitted to process (71 FR 38313 (July 6, 2006) No other law requires that a notice of (proposed rule), and 72 FR 33646 (June the Directorate of Defense Trade proposed rulemaking and an Controls (DDTC), clarifies the policies 19, 2007) (final rule)). In publishing this opportunity for public comment be final rule, BIS removes a VEU from the and procedures regarding statutory given for this final rule. Because a debarments, and corrects administrative list of VEUs in the PRC, at the request notice of proposed rulemaking and an of the VEU, similar to past requests by and typographical errors. opportunity for public comment are not DATES: This Final rule is effective on other VEUs, approved by the End-User required under the APA or by any other Review Committee. This change has December 5, 2016. The Department will law, the analytical requirements of the accept comments on the Final been made within the established Regulatory Flexibility Act (5 U.S.C. regulatory framework of the VEU regulation up to January 4, 2017. 601et seq.) are not applicable. As a program. Further, this rule does not ADDRESSES: Interested parties may result, no final regulatory flexibility abridge the rights of the public or submit comments within 30 days of the analysis is required and none has been eliminate the public’s option to export date of publication by one of the prepared. under any of the forms of authorization following methods: set forth in the EAR. List of Subjects in 15 CFR Part 748 • Email: Publication of this rule in other than Administrative practice and DDTCResponseTeam@state.gov with the final form is unnecessary because the procedure, Exports, Reporting and subject line, ‘‘ITAR Corrections and procedure for revocation of a VEU or recordkeeping requirements. Clarifications.’’ facility from the Authorized VEU list is • Internet: You may view this Final similar to the license revocation Accordingly, part 748 of the EAR (15 rule and submit your comments by procedure, which does not undergo CFR parts 730–774) is amended as visiting the Regulations.gov Web site at public review. During the VEU follows: www.regulations.gov, and searching for revocation procedure, the U.S. PART 748—[AMENDED] docket number DOS–2016–0070. Government analyzes confidential Comments received after that date sradovich on DSK3GMQ082PROD with RULES business information according to set ■ 1. The authority citation for part 748 will be considered if feasible, but criteria to determine whether a given continues to read as follows: consideration cannot be assured. All authorized VEU entity remains eligible Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. comments (including any personally for VEU status. Revocation may be the 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, identifying information or information result of a material change in 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, for which a claim of confidentiality is circumstance at the VEU or the VEU’s 3 CFR, 2001 Comp., p. 783; Notice of August asserted in those comments or their authorized facility. Such changes may 4, 2016, 81 FR 52587 (August 8, 2016). transmittal emails) will be made VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1


Document Created: 2016-12-03 00:25:55
Document Modified: 2016-12-03 00:25:55
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis rule is effective December 5, 2016.
ContactChair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, U.S. Department of Commerce, Phone: 202-482- 5991; Email: [email protected]
FR Citation81 FR 87426 
RIN Number0694-AH16
CFR AssociatedAdministrative Practice and Procedure; Exports and Reporting and Recordkeeping Requirements
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