Census Updates AES Codes to Reflect BIS VEU Changes
The Census Bureau alerted exporters this week about changes to Automated Export System codes that were previously used for certain validated end users, noting that the updates reflect an August rule from the Bureau of Industry and Security that removed China-based facilities as VEUs.
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Exporters can no longer use AES code C57 for those VEUs and must instead use new code C79, Census said in an email to industry this week. Exports to fabs that had previously been VEUs, such as Chinese affiliates of Samsung and SK hynix, "must now be made under a validated license for routed transaction issued by BIS to the Fab" and be filed in AES with code C79, Census said.
If BIS grants the license, "the fabs will present to any company exporting, reexporting, or transferring (in-country) items subject to the [Export Administration Regulations] with the appropriate license number that begins with the letter H for use in AES filing," Census said. "Any terms and conditions of the license relevant to the exporter, reexporter, or transferor (in-country) will also be relayed to them by the fabs prior to the export, reexport, or transfer (in-country). When using one of these H licenses, the exporter must use new AES code C79."
C79 can be used with all Export Control Classification Numbers except for 3B001.f.1.a and items controlled for missile technology and crime control reasons, and the code can be used only for exports to China. All export information codes can be used except for UG (gift parcels), and all modes of transportation are allowed except 70 (fixed transport).
Census added that the use of code C79 doesn't "determine what is reported as the 'Is this a Routed Transaction' (routed) indicator in the AES," and that indicator should be reported in line with the Foreign Trade Regulations. "Therefore, the routed indicator should only reflect 'Yes' when the Foreign Principal Party in Interest authorizes a U.S. agent to facilitate export of items from the United States on its behalf and prepare and file the Electronic Export Information."
The Census message was sent about four months after BIS removed Chinese affiliates of foreign tech companies from its VEU List, making them ineligible for a general authorization that had allowed them to receive certain controlled technology for their Chinese factories (see 2508290006). BIS at the time called the VEU program a "loophole" that had allowed a "select group of foreign semiconductor manufacturers to export most U.S.-origin goods, software, and technology license-free to manufacture semiconductors in China."