Restrictions on export of chemicals as per SCOMET list

Export of Category 1A chemical is prohibited.

Export of chemicals listed in Category 1B is permitted only to States party to the Chemical Weapons Convention after obtaining a license from DGFT. The list of State Parties to the Chemicals Weapons Convention (CWC) and countries which are not State Parties is available on the OPCW website http://www.opcw.org.

 Export of Chemicals in Category 1C  is allowed  to  State  Parties  to the  CWC  without  an export licence subject to the condition that the exporter shall notify within 30 days of export to the National Authority, Chemicals Weapons Convention, Cabinet Secretariat; the Ministry of External Affairs (D&ISA); the Department of Chemicals & Petro-chemicals, and the DGFT of such exports in the prescribed format (Aayat Niryat Form ) along with the End-Use Certificate and submit to the DGFT a copy of the bill of entry into the destination State Party within 30  days of delivery.

   Export of chemicals in Category 1C to states not party to the Chemical Weapons Convention shall continue to be restricted and will be allowed only against an export licence, and in that case also exporters shall submit to the DGFT a copy of the bill of entry into the destination country within 30 days of export.

Export of Military Stores / Munitions from India

 Do I need a license for Export of Military Stores?

Yes, a No Objection Certificate (NOC) from Department of Defence Production is required for Export of Military Stores.

Check out the list here:- http://dgft.gov.in/Exim/2000/NOT/NOT13/not11513.pdf

A Committee under the Chairmanship of Joint Secretary (DIP) having representatives of MEA, PIC Wing of MOD, concerned SHQ(s), DRDO and any other expert, as deemed necessary, examines and makes recommendation on granting NOC for export of military stores in Appendix – II of SOP. 

In case NOC for export is not agreed to by/comments are not received from any of the stake holders, a meeting of this Committee will be scheduled after a gap of 15 days from circulation of application to all members. In case, due to certain sensitivities involved in the proposal due to any reason, the Committee is not in a position to take a final view, the matter will be placed before Defence Exports Steering Committee (DESC), which will be chaired by Secretary (Defence Production).

Cases for export of military stores in Appendix-II of SOP where EUC from Government of end user/ultimate end user country/State are not furnished, are also examined by this Committee on case to case basis and recommended for issue of NOC only if plausible justification is provided.

You can find the Standard Operating Procedure (SOP) for issue of No Objection Certificate (NOC) for Export of Military Stores at the link given below

Please check the link:

http://ddpmod.gov.in/sites/default/files/Standard%20Operating%20Procedure.pdf

Is there a prohibition on transfer of Technology related to SCOMET items?

Section 13(2) and 13(3) of the WMD Act, 2005 provide restrictions on transfer of technology. Section 13(2) clarifies that any transfer of technology of an item whose export is prohibited under this Act or any other relevant Act relating to relevant activity shall be prohibited. Note that it talks about “transfer of technology” and not “export of technology”. Section 13(3) specifies that when any technology is notified under this Act or any other relevant Act, as being subject to transfer controls, the transfer of such technology shall be restricted to the extent notified thereunder.

Transfer of technology may take place through either or both of the following modes of transfer, namely:-

a)                  by a person or from a place within India to a person or place outside India;

b)                 by a person or from a place outside India to a person, or a place, which is also outside India (but only where the transfer is by, or within the control of, person, who is a citizen of India, or any person who is a resident in India).

What are the restrictions on transfer of technology to foreign nationals?

Transfer of any controlled technology is not allowed from

a)      by a person or from a place within India to a person or place outside India;

b)     by a person or from a place outside India to a person, or a place, which is also outside India. (but only where the transfer is by, or within the control of, person, who is a citizen of India, or any person who is a resident in India).

Hence, transfer of controlled technology to foreign nationals is barred by any person who is a citizen of India, or any person who is a resident in India even if it happens outside India.

Meaning of Technology in the Indian export control regime

Para 2(m) of the Foreign Trade (Development & Regulations) Amendment Act, 2010 defines technology as follows:-

(m) “Technology” means any information (including information embodied in software), other than information in the public domain, that is capable of being used in—

(i)                the development, production or use of any goods or software;

(ii)              the development of, or the carrying out of, an industrial or commercial activity or the provision of service of any kind.

Explanation.—For the purpose of this clause—

(a)  when technology is described wholly or partly by reference to the uses to which it (or the goods to which it relates) may be put, it shall include services which are provided or used, or which are capable of being used in the development, production or use of such technology or goods;

(b)  “public domain” shall have the same meaning as assigned to it in clause (i) of section 4 of the Weapons of Mass Destruction and their Delivery System (Prohibition of Unlawful Activities) Act, 2005 (21 of 2005).]

(b)

Note:- Clause (i) of section 4 of WMD Act, 2005 defines Public Domain as

"Public domain" means domain that has no restrictions upon dissemination of information within or from it; the existence of any legal rights to intellectual property in that information does not remove such information from being in public domain;”

Penalties for exporting SCOMET items without a license

These are the important legal provisions related to penalties for exporting SCOMET items without a license

Section 14E of the Foreign Trade (Development & Regulations) Amendment Act, 2010 delineates the offences and penalties:-

14E. Offences and penalties.—

(1) In case of a contravention relating to specified goods, services or technologies, the penalty shall be in accordance with the provisions of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (21 of 2005).

(2) Where any person contravenes or attempts to contravene or abets, any of the provision(s) of this Chapter in relation to import or export of any specified goods or services or technology, he shall, without prejudice to any penalty which may be imposed on him, be punishable with imprisonment for a term stipulated in the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (21 of 2005).

(3) No court shall take cognizance of any offence punishable under this Chapter without the previous sanction of the Central Government or any officer authorised in this behalf by the Central Government by general or special order.]

In addition, Section 8 of the FTDR Act specifies suspension or cancellation of IE Code of the person who imports or exports specified goods services or technology in contravention of any provision of the Act or any rule or orders made thereunder.

Penalties specified in the WMD Act, 2005?

Sections 14 to 22 are relevant for understanding penalties and offences under the WMD Act, 2005. They can be briefly summarized as follows. For the legal version, see the WMD Act, 2005.

·         Offences and penalties.-Any person who contravenes, or attempts to contravene or abets, the provisions of section 8 or section 10 of the WMD Act, shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine.

·         Punishment for aiding non-State actor or terrorist.- Any person who, with intent to aid any non-State actor or terrorist, contravenes the provisions of section 9 of this Act, shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine.

·         Punishment for unauthorized export:-

§  Any person who knowingly contravenes, abets or attempts to contravene, the provisions of subsection (4) of section 13 of this Act, shall be punishable with fine which shall not be less than three lakh rupees and which may extend to twenty lakh rupees.

§  If any person is again convicted of the same offence under subsection (1), then he shall be punishable for the second and every subsequent offence with imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine.

·         Punishment for violation of other provisions of the Act.-

o   Where any person contravenes, or abets or attempts to contravene, any provision of this Act other than the provisions under sections 8, 9, 10 and 13(4) of this Act, he shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine.

o   For the second and every subsequent offence with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine.

·         Penalty for using false or making forged documents, etc. Punishable with fine which shall not be less than five lakh rupees or five times the value of the materials, equipment, technology or services, whichever is more.

·         Punishment for offences with respect to which no provision has been made. Punishable with imprisonment for a term which may extend to one year, or with fine, or with both.

In the case of offences by a company, who is liable?

Section 20 of the WMD Act, 2005 clarifies this. It says that where an offence has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. For the legal version, see WMD Act, 2005

All relevant Notifications/Public Notices/Circulars for SCOMET

Notifications/Public Notices	Date	Subject	Link
Notification no. 19	4.8.2016	Import/export policy for Human Biological Samples for commercial purposes	http://dgft.gov.in/Exim/2000/NOT/NOT16/noti1916.pdf
Notification no. 13	29.6.2016	Exports and Imports to Iran	http://dgft.gov.in/Exim/2000/NOT/NOT16/noti1316.pdf
Public notice no. 19	29.6.2016	Exports and Imports to Iran	http://dgft.gov.in/Exim/2000/PN/PN16/pn1916.pdf
Notification no. 5	29.4.2016	Updation of SCOMET list	http://dgft.gov.in/Exim/2000/NOT/NOT16/noti0516.pdf
Public notice no. 60	03.2.2016	Export permission for 'Stock & Sale' purpose and for export of spare parts	http://dgft.gov.in/Exim/2000/PN/PN15/pn6016.pdf
Notification no. 116	13.3.2015	Updation of SCOMET list	http://dgft.gov.in/Exim/2000/NOT/NOT13/not11613.pdf
Notification no. 115	13.3.2015	Export of Military Stores	http://dgft.gov.in/Exim/2000/NOT/NOT13/not11513.pdf
Notification no. 26	3.7.2013	Updation of SCOMET list	http://dgft.gov.in/Exim/2000/NOT/NOT13/not2613.htm
Notification no. 37	14.3.2013	Updation of SCOMET list	http://dgft.gov.in/Exim/2000/NOT/NOT12/not3712.htm

Guidelines on India's export control

Check out the guidelines from the DGFT website along with FAQs

http://dgft.gov.in/exim/2000/scomet/scomet2016.pdf