India overhauls SCOMET list
Export control laws in India have been significantly overhauled by the Directorate General of Foreign Trade (‘DGFT’) with effect from 1 May 2017, write the team at Indian law firm Economic Laws Practice.
The amendments among other things seek to revise the Special Chemical, Organisms, Materials, Equipment and Technologies category (‘SCOMET’) relating to dual-use goods and technologies. These changes have been brought about as part of India’s continuing obligations as a member of the Missile Technology Control Regime and as an adherent to the Nuclear Suppliers Group guidelines. It also seeks to align with the guidelines and control lists of the Wassenaar Arrangement (‘WA’) and the Australia Group, two multilateral export control regimes that India wishes to join.
Some of the key changes include:
- The export of SCOMET items (S.No. 5 of Table A) are now classified as ‘Prohibited/Restricted’ and specific conditions/restrictions in respect of the each of the SCOMET categories have been separately provided.
- A ‘Commodity Identification Note’ has been added to the SCOMET List to facilitate proper classification and licensing jurisdiction. The earlier SCOMET Glossary for the definition of terms has been substituted with a more detailed Glossary.
- Some procedural aspects relating to the SCOMET List have been streamlined. For instance, the period for processing SCOMET applications has been cut short to 30 days from 45 days earlier. Furthermore, now every SCOMET authorisation holder has to maintain specified records for five years. The format for end use/end-user certificate inter alia required for export of SCOMET items is also revised.
- Amendments have been made in Category 1C which relates to the export of chemicals. It now states that specified chemicals to countries not party to the Chemical Weapons Convention would now need a government signed end-use certificate in addition to the export licence. There was no such requirement earlier.
- Category 1D has been newly inserted which lists 25 chemicals that can be exported to specified countries without a prior authorisation in form of an export licence. The specified countries are those who are the members of the Australia Group. However, exports are subject to the condition that the exporter will notify the Department of Chemical & Petrochemicals, Ministry of External Affairs (D&ISA) and the DGFT within 30 days of such export in the prescribed format along with the end-use certificate and submit to the DGFT a copy of the bill of entry into the destination country within 30 days of the delivery.
- In Category 3, earlier entries 3D001 to 3D005 have been replaced with revised entries. A note to revised entries now specifically states that the controls under 3D001 (heat exchangers, valves, pumps, incinerators, etc.) do not apply to equipment specially designed for use in civil applications which render them inappropriate for use related to chemical warfare agents.
- A new Category 8 has been inserted for ‘Special Materials and Related Equipment, Material Processing, Electronics, Computers, Telecommunications, Information Security, Sensors, And Lasers, Navigation and Avionics, Marine, Aerospace and Propulsion’. The same has been inserted to align India’s export control list with the Wassenaar Arrangement. The category inter-alia includes specially designed robots, mobile telecommunication jamming equipment and underwater survey equipment.
At a time when India is aggressively pushing for membership of Nuclear Suppliers Group, the Wassenaar Arrangement and the Australia Group, the amendments are a welcome step forward and are likely to bring in the much-needed clarity. The purpose is also to make Indian companies more compliant and to ensure that a robust mechanism is in place to check and/or regulate proliferation of dual-use items.