Commerce says proposed ?trusted customer? rule near

Commerce says proposed ôtrusted customerö rule near Christopher Padilla, the U.S. assistant secretary for export administration, said the Commerce Department will soon implement its validated end-user rules for Chinese companies seeking to buy U.S. technology.
   The proposed rules promise fewer administrative burdens for American shippers who would otherwise require a license to export to these Chinese firms.
   These same rules may eventually be extended to commercial end-users of U.S. products in other countries, Padilla told attendees at the American Conference Institute Export Control Conference in Washington on May 15.
   The proposed validated end-user (VEU) rule, also called the 'trusted customer' program, was initially proposed by the Commerce Department's Bureau of Industry and Security on July 6 as an effort to reshape and clarify existing export control rules pertaining to China.
   The Bush administration and some lawmakers on Capitol Hill are concerned that 'dual use' American-made products, or technologies with both commercial and military application, may help fuel China's armed forces. The problem for U.S. regulators and companies doing business in China is that many Chinese state-owned firms manufacture products for both commercial and military purposes.
   While promoting trade with China, the Bush administration said it wants regulations in place to prevent dual-use items from getting into the hands of the Chinese military. 'Our export controls must reflect the duality inherent in this policy and must distinguish between different kinds of customers within a large and diverse economy,' Padilla said.
   Prospective validated end-users would need to meet a number of criteria. They must demonstrate a compliant track record with U.S. export control regulations and have no connection to weapons development programs. Other evaluation criteria include:
   * Ability to comply with the VEU requirements.
   * Agreement to on-site compliance reviews by U.S. officials.
   * Provide insights into relationships with U.S. and overseas companies.
   Participation in the VEU program is voluntary.