DGFT issues extension of export authorization for SCOMET items involving technology transfer

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DGFT issues extension of export authorization for SCOMET items involving technology transfer

Garima Prakash

@GarimaP

September 21, 2020

Public Policy

387

In a response to the industry’s requests seeking re-validation to export authorizations for SCOMET items, the Directorate General of Foreign Trade (DGFT) has issued Trade Notice 26/ 2020-21 on 31^st August 2020. Please refer to the attachment for a copy of Trade Notice 26.

Earlier, NASSCOM’s request for automatic extension (by four months) of SCOMET authorisation was responded to by the DGFT by introducing certain relaxations in the re-validation process (here). Now the DGFT has introduced a 6-month extension for all SCOMET export authorizations involving technology transfer expiring by 30 September 2020.

This extension has been granted in furtherance of the plethora of requests from the industry seeking re-validation to export authorization issued for technology/software transfer on the grounds that the export of technology/software is an ongoing and continuous process, and within the scope of the terms and conditions agreed to between the parties. After examining this issue, the DGFT has come to a conclusion that export obligations pertaining to technology/software cannot be quantified in terms of value or items of export. However, in order to protect exports from suffering especially in times of a pandemic, DGFT has granted a one-time extension of 6 months only for all SCOMET export authorizations involving technology transfer expiring by 30 September 2020. The procedure for such re-validation entails submitting an application to the DGFT.

Currently, SCOMET authorisations and authorisations for claiming benefits under various schemes in Foreign Trade Policy 2015 – 2020 (FTP) have been placed in the same bucket (see Chapter 2 of the Handbook of Procedures 2015 – 2020). However, SCOMET authorizations are different from authorizations obtained under FTP: (a) they represent an approval or permission by the DGFT for export of dual-use items and technologies that have a specified end-use and end-user; and (b) they are not accompanied with an export obligation. In this context, we are examining the need to establish an independent re-validation mechanism for authorizations issued under SCOMET along with the appropriate procedure for such re-validation.

We would like to engage with the industry on the need for a separate mechanism for issuance of re-validation for SCOMET authorizations. For more information and discussion on this issue, please contact garima@nasscom.in.

technology software FTP DGFT SCOMET dual use export authorization

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Garima Prakash

Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech