International Law Advisory - BIS to Announce List of Approved End-Users and Eligible Items for India

July 1, 2009

In tomorrow’s Federal Register, the Department of the Commerce, Bureau of Industry and Security (“BIS”) will issue a final rule amending the Export Administration Regulations (“EAR”) to include the initial list of end-users in India to receive exports, reexports, and transfers of certain items under the Validated End-User (“VEU”) program. See the advance copy of the Federal Register notice, available here. The VEU program eliminates export licensing requirements for eligible EAR-controlled items sent to authorized end-users.

By way of background, in October 2007 BIS added India to the list of VEU-eligible destinations, which initially only included the People’s Republic of China. At the time, we noted that the development was another step toward easing US controls on exports to India – a trend spurred by bilateral cooperation over the past several years. See our October 3, 2007 advisory “New Export Control Rule for Exports to India”.

The present rule, effective July 2, 2009, will officially authorize GE India and three of its facilities to receive certain aluminides, nickel alloys, technology for the development of certain controlled items, explosives or detonator detection equipment and software for their development, and certain technology related to propulsion systems, space vehicles, and related equipment. The specific facilities and items (by Export Control Classification Number) are listed below:

        GE India
        AIFACS Bldg., 1 Rafi Marg
        New Delhi 110 001 India

        GE India Technology Centre Private Ltd. (GEITC)
        122, EPIP, Phase II Z
        Hoodi Village
        Whitefield Road
        Bangalore, Karnataka 560066 India Z
                    1C002.a.1, 1C002.a.2, 1C002b.1.a and 1C002.b.1.b Z
                    1E001, 2E983,
                    9E003.a.1, 9E003.a.4, 9E003.a.5, 9E003.a.6, 9E003.a.8, Z
                    and 9E003.c

        Bangalore Engineering Centre (BEC)
        c/o GE India Technology Centre Private Ltd. (GEITC)
        122, EPIP, Phase II
        Hoodi Village
        Whitefield Road
        Bangalore, Karnataka 560066 India
                    1C002.a.1, 1C002.a.2, 1C002.b.1.a, C002.b.1.b
                    1E001
                    9E003.a.1, 9E003.a.2, 9E003.a.4, 9E003.a.5, 9E003.a.6,
                    9E003.a.8, and 9E003.c

        GE Fanuc Systems PVT Ltd.
        90/B Electronics City
        Hosur Road
        Bangalore 561229 India
                    2A983
                    2D983

Note that VEU authorization is indefinite, unlike the two-year validity period of an export license, but it may be revised, suspended, or revoked pursuant to Section 748.15(a)(3) of the EAR. There are conditions related to being authorized as a VEU, including an adequate export control compliance program and willingness to allow U.S. Commerce Department representatives to visit on-site. The advance Federal Register notice states that any such visit is to be notified as appropriate to the Government of India.

As mentioned above, the revisions to the EAR will be effective tomorrow (upon publication in the Federal Register). There is no formal comment period for the regulation, but BIS has invited public comments on a continuing basis. Should you have any questions about the new rule or any related export control issues, please contact Ed Krauland (202.429.8083; ekrauland@steptoe.com) in our Washington, DC office.