Regulatory intelligence for US exporters

BIS Looking to Increase Use of Validated End-User Program, Official Says

The Bureau of Industry and Security is looking to expand its validated end-user program, which it hopes will allow more U.S. exporters to sell products to credible foreign customers without having to first apply for a license, said Thea Kendler, the agency’s assistant secretary for export administration.

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Kendler said BIS is searching for “creative approaches” to working with U.S. allies, which may include making more use of the agency’s VEU program. Foreign companies that are certified as validated end-users can receive expedited shipments of export-controlled items under a VEU authorization, which allows the U.S. exporter to skip the BIS license application process for certain items.

A company certified as a VEU in India, for example, “is eligible to receive advanced tech exports without waiting for suppliers to obtain” a BIS license, Kendler said in remarks prepared for a speech at the agency’s annual conference in Washington last week. She said that process “allows for more certainty and reliability regarding the receipt of items subject to the” Export Administration Regulations. She also noted that a VEU authorization, unlike a license, doesn’t expire.

“We are working through different scenarios to see how authorization VEU could be further utilized around the world,” Kendler said. “We welcome your feedback on this.”

She asked companies to share with BIS where they are “seeking new opportunities” to help BIS determine whether it could possibly use its VEU program for customers in those countries. “That's probably closely held corporate strategy information, but I encourage you to share that information with us … within the bounds of” Freedom of Information Act “protections and business confidentiality, so that we can incorporate that information into our outreach to governments on export controls,” she said.

BIS updated its VEU List last year to allow U.S. exporters to send certain export-controlled semiconductor equipment to South Korean chip companies. The move added Samsung and SK Hynix’s fabrication facilities in China to the list (see 2310130016).

“Increasingly, we’re thinking about ensuring that the items subject to our controls are readily accessible in countries eager to join the United States in using advanced technology responsibly,” Kendler said.

Kendler said BIS also is looking at other ways to reduce restrictions on technology trade with close allies, including by studying the State Department’s ongoing work to lower licensing burdens around defense trade with Australia and the U.K. as part of the AUKUS agreement (see 2402150046). She said BIS is “working on incorporating the premise of AUKUS into dual-use export controls,” but she didn’t give more details.

“In light of the AUKUS partnership and these new tech protection measures our allies have implemented,” Kendler said, “we are considering what we can do to streamline trade controls with the UK and Australia.”