The Commerce Department’s Bureau of Industry and Security (BIS) recently announced its much anticipated and discussed changes to the US dual-use export licensing policy for certain high-tech exports to the People’s Republic of China. These changes include the removal of individual license requirements for certain authorized customers in China, while imposing new licensing requirements for a targeted list of items related to China’s military modernization. Following is a link to the announcement: Commerce Department Announces Updated Export Controls for China
The new regulations create a Validated End-User (VEU) program that will permit qualified companies, referred to as "trusted customers," located in China to receive certain US-controlled items without the need to obtain an individual export license. The Department of Commerce expects to publish an initial list of approved Validated End-Users as early as next month.
An application for VEU designation may be submitted either by the Chinese company directly or through the U.S. exporter. Factors which will be taken into consideration in reviewing VEU applications include the Chinese company’s business operation, record of compliance, agreement to allow U.S. Government on-site review and relationship with U.S. and foreign companies.
New controls will be placed on a focused list of items if they are destined for military end-uses in China. The list of items covers 20 product categories and associated technologies and software, as described in 31 entries on the Commerce Control List, and includes aircraft and aircraft engines, avionics and inertial navigation systems, lasers, depleted uranium, underwater cameras and propulsion systems, certain composite materials, and some telecommunications equipment for space communications or air defense.
Following is a link to the BIS Fact Sheet: Updated China Dual-Use Export Regulations, including Items Subject to Military End-Use Control
The phrase "military end-use" means an item incorporated into: a military item described on the U.S. Munitions List (USML) or the International Munitions List (IML); commodities listed under ECCNs ending in "A018"; or any item that is designed for the "use", "development", "production", or deployment of military items as described above.
The term "military end-user" means the national armed services, the national guard, the national police, government intelligence or reconnaissance organizations, or any person or entity whose actions or functions are intended to support "military end-uses."
See BIS Q & A on China Policy Rule website.