DGFT Guideline for Export of Scomet Items
GUIDELINES FOR EXPORT OF SCOMET ITEMS
Export of dual-use items and technologies under India’s Foreign Trade Policy is regulated. Export of dual-use items and technologies is either prohibited or is permitted under a licence. In Foreign Trade Policy, dual-use items have been given the nomenclature of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET). Export Policy relating to SCOMET items is given in Appendix 3 of Schedule 2 of ITC (HS) Classification and Paragraph 2.49 of Hand Book of Procedures Vol.-I, 2009-14. Appendix 3 of Schedule 2 of ITC (HS) Classification contains a list of all dual-use items and technologies export of which is regulated. (For Appendix 3 please click here.) (Please also refer to Notification No. 27 (RE 2007)/2004-2009) dated 7th September, 2007 and Notification No. 122 (RE-2008)/2004-2009 dated 19th August, 2009).
2. List of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) items
In the list as appearing in Appendix 3 of Schedule 2 of ITC (HS) Classification, SCOMET items are listed under eight (8) categories as follows:
Category 0 : Nuclear materials, nuclear-related other materials, equipment and technology. (The licensing authority for this category is the Department of Atomic Energy)
Category 1 : Toxic chemical agents and other chemicals
Category 2 : Micro-organisms, toxins
Category 3 : Materials, Materials Processing Equipment, and related technologies
Category 4 : Nuclear-related other equipment, assemblies and components; test and production equipment; and related technology, not controlled under Category 0
Category 5 : Aerospace systems, equipment including production and test equipment, related technology and specially designed components and accessories thereof.
Category 6 : (Reserved)
Category 7 : Electronics, computers, and information technology including information security. Each category contains exhaustive listing of items covered under that category. Special conditions applicable to items under different categories are mentioned under each category.
3. Procedure for Filing applications for Export Licence for SCOMET items.
To obtain a licence for export of SCOMET items, an exporter must apply in the prescribed Aayat Niryat Form (ANF 2E and ANF 1) along with the prescribed documents to DGFT (Headquarters), Udyog Bhawan, New Delhi. These forms can be downloaded from the DGFT website www.dgft.gov.in. Detailed guidelines for filing the application have been given at the end of ANF 2E.
4. Procedure for Processing of Applications for licence for export of SCOMET items
All applications for licence for export of SCOMET items are considered on merits by an Inter-Ministerial Working Group (IMWG) in the DGFT under the Chairmanship of Additional Director General of Foreign Trade as per guidelines and criteria laid down in Para 2.49 of the Handbook of Procedure Vol. 1. Once the case is approved by the IMWG, permission letter is issued to the exporter for obtaining export authorization from the concerned Zonal/Regional office of the DGFT. Relevant extract of Para 2.49 of HBP Vol. 1 is reproduced here:
Paragraph 2.49 of HBP Vol. 1
Applications for licences to export items or technology on SCOMET List are considered case-by-case, based inter alia on the following general criteria: -
I. Following factors, among others, are taken into account in the evaluation of applications for export of items on SCOMET List:
a. Credentials of end-user, credibility of declarations of end-use of the item or technology, integrity of chain of transmission of item from supplier to end user, and the potential of item or technology, including timing of its export, to contribute to end uses that are not in conformity with India’s national security or foreign policy goals and objectives, objectives of global non-proliferation, or its obligations under treaties to which it is a State party.
b. Assessed risk that exported items will fall into hands of terrorists, terrorist groups, and non-State actors;
c. Export control measures instituted by recipient State;
d. The capabilities and objectives of programmes of recipient State relating to weapons and their delivery;
e. Assessment of end-uses of item(s);
f. Applicability to an export licence application of relevant bilateral or multilateral agreements to which India is a party.
II. A condition for consideration of an application for an export licence is submission of stipulated certifications to the effect, inter alia, that:
a. The item will be used only for the stated purpose and that such use will not be changed, nor items modified or replicated without consent of Government of India;
b. Neither the items nor replicas nor derivatives thereof will be re-transferred without consent of Government of India;
c. End-user shall facilitate such verifications as are required by Government of India. Government of India may also require additional formal assurances, as appropriate, including on end-use and non-retransfer, from State of recipient.
III. Licensing authority for items in Category 0 in Appendix 3 to Schedule 2 of ITC (HS) is Department of Atomic Energy. Applicable guidelines are notified by that Department under Atomic Energy Act, 1962. For certain items in Category 0, formal assurances from recipient State will include non-use in any nuclear explosive device. Licences for export of certain items in Category 0 will not be granted unless transfer is additionally under adequate physical protection and is covered by appropriate International Atomic Energy Agency (IAEA) safeguards, or any other mutually agreed controls on transferred items.
IV. Additional end-use conditions may be stipulated in licences for export of items or technology that bear possibility of diversion to or use in development or manufacture of, or use as, systems capable of delivery of weapons of mass destruction.
V. Applications for transfer of “Technology” for any item on the List will be considered as an application for export of the item itself.
VI. Licences for export of items in SCOMET List (other than those under Category 0, 1 and 2) solely for purposes of display or exhibition shall not require any end-use or end-user certifications. No export licence for display or exhibition shall be issued for ‘Technology’ in any category or for items under Categories 0, 1, and 2.
VII. Export of items not on SCOMET List may also be regulated under provisions of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005.
Note 1: Export or attempt to export in violation of any of conditions of licence shall invite civil and/or criminal prosecution.
Note 2: Licences for export of items in this List for display or exhibition abroad are subject to a condition of reimport within a period not exceeding six months. Exporters are entitled to apply for an export licence for such items exhibited abroad if exhibitor intends to offer that item for sale during exhibition abroad. Such sale shall not take place without a valid licence.
Note 3: Export of items in Category 2 of this list may also be controlled by other applicable guidelines issued from time-to-time.
Note 4: Exporters are entitled to apply for a ‘destination licence’ for countries and / or groupings of countries for export to which only re-transfer conditions need be imposed.
Note 5: Exporters are entitled to request that only such conditions need be imposed as are subject of government-to-government instruments of accord over export of items on SCOMET List.
Note 6: ‘Technology’ (see also entry ‘Technology’ in glossary in Appendix 3 to Schedule 2 of ITC (HS)): Approval of export of an item on the SCOMET List also authorizes the export to same end-user of minimum ‘technology’ required for installation, operation, maintenance and repair of the item.
DGFT in association with Administrative Ministries /Departments and Trade Associations will organize Industry Outreach Programme on regular basis for an effective awareness among the exporters /importers dealing with trade, in particular, in SCOMET items.
5. Advice to Exporters Attention of exporters is drawn to the following important provisions of Policy/ Procedures:-
(i) Export of SCOMET items is permitted only against a licence, in accordance with the policy contained in Appendix 3 to Schedule 2 of ITC (HS). It is not permitted under an Advance Authorisation or any other licence issued (under a duty exemption or remission scheme) by the DGFT.
In this connection, attention is drawn to para 4.1.13 of the Foreign Trade Policy, 2009-14 :
“….prohibited items of exports mentioned in ITC(HS) shall not be exported under Advance Authorisation / DFIA scheme. Export of restricted items shall be subject to all conditionalities or requirements of Export Authorisation or permission, as may be required, under Schedule II of ITC (HS).”
It has been clarified vide Policy Circular No. 99(RE-08)/2004-2009 dated 11th August, 2009 that in case of applications for Advance Authorisation where export item is a SCOMET item, and where the applicant so requests, Advance Authorisation may be issued prior to issue of SCOMET licence, subject to the following condition: -
“In case SCOMET licence is not granted within four (4) months of the issue of the Advance Authorisation, then the exporter would pay customs duty and applicable interest on the imported goods and thereafter close the Advance Authorisation. This condition would be incorporated in the Advance Authorisation. The applicant would also give an LUT in this regard.”
(ii) Exporters are required to submit to the DGFT (SCOMET Division), Udyog Bhawan, New Delhi, copies of Bills of entry into the importing country within 30 days of the shipment of SCOMET items as given in Appendix 3 of Schedule 2 of ITC (HS).
(iii) Category 1 (of SCOMET List) chemicals : Exporters must go through the provisions very carefully before undertaking to export chemicals under Category 1. Export of Category 1A chemicals is prohibited.The list of State Parties to the Chemicals Weapons Convention (CWC) and countries which are not State parties is available on the OPCW website (www.opcw.org).
Contact Information:
Exporters wishing to apply for licence for export of SCOMET items are advised to go through the provisions of Foreign Trade Policy as detailed above for removal of any doubts. However, in case of any further information/clarification please contact:
Vibha Bhalla,
Joint Director General of Foreign Trade,
Directorate General of Foreign Trade,
Room No.107, Udyog Bhavan
(011) 23062240
Ramanand Meena
Deputy Director General of Foreign Trade,
Directorate General of Foreign Trade,
Room No.485, Udyog Bhavan,
(011) 23061562 Extn.276