Export Control Tightens: End of the Validated End-User Program and New Licensing Obligations for Semiconductors

The U.S. Bureau of Industry and Security (BIS) has announced a major regulatory shift that will significantly impact companies exporting semiconductor manufacturing equipment and related technologies. The agency has decided to end the Validated End-User (VEU) program, a framework that allowed certain foreign companies to receive controlled items without a specific export license.

Beginning December 31, 2025, all foreign companies previously covered by the VEU program will now be required to obtain an export license for any transaction involving semiconductor manufacturing equipment, components, software or technology destined for China. This marks a substantial tightening of export control rules under the Export Administration Regulations (EAR).

This measure will require exporters to strengthen their internal compliance programs, particularly regarding the verification of end users and the assessment of export destinations. Companies must be able to document their due-diligence procedures, justify their classification decisions and demonstrate that the required licenses have been obtained before shipping any controlled item.

To remain compliant, exporters must reassess their supply chains and review their classification workflows to determine which products will now require prior authorization. It is equally essential to verify whether existing partnerships or customer relationships involve entities located in China or operating on behalf of Chinese companies, as these transactions may now involve additional licensing constraints.

In a regulatory environment that is evolving rapidly, anticipation has become critical. Companies that take the time to understand the new rules, adapt their internal processes and strengthen their export control monitoring will be better equipped to avoid delays, penalties and commercial disruptions.