Thursday, 12 January 2017

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.

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