Any company in India may apply for the VEU program. Generally, companies that will benefit the most are those that place multiple orders for controlled dual-use items, like chemicals and electronic components, with U.S. exporters.
The applicant can choose which and how many of its production or R&D facilities are included in its application for VEU status. A facility authorized to receive items under VEU may not transfer the U.S. items imported under its VEU authorization to any other location that has not been specifically approved for VEU status, even if that other location is part of the same company. Only facilities that engage in the production of items for civil use may be approved for VEU.
Items controlled by the U.S. government for missile technology (MT) or crime control (CC) reasons may not be exported under VEU, and items exported under VEU may not be used for any activities described in part 744 of the Export Administration Regulations (EAR).
Companies can apply directly to the Department of Commerce for VEU authorization, or U.S. companies may file an application on behalf of Indian companies. There are certain criteria that a firm will be evaluated against during the applications process. Once a firm applies for the VEU program, a committee composed of representatives from multiple U.S. Government agencies reviews the application and determines:
1) If the applicant is a reliable recipient of U.S. controlled items;
2) If the applicant meets the VEU criteria; and
3) If approved, which controlled exports the firm should be able to receive under the VEU program.
In exchange for receiving controlled items under VEU authorization, the Indian firm agrees to allow the U.S. Government to conduct an inspection of the facility or facilities in which the U.S. origin items are being used. This inspection is known as an “on-site visit,” and is very similar to the existing “End-Use Checks” that the U.S. government routinely conducts at facilities in India that have imported licensed U.S.-controlled items.
Under VEU authorization the company in India must certify to the U.S. Government that the concerned items will be used in accordance with VEU program restrictions, and must provide additional information on how it will ensure that it is in compliance with the VEU program (e.g., an intracompany control plan). Additional information may be requested by the U.S. Government when a VEU application is being reviewed.