An Overview

The Foreign Trade Policy (FTP) of India, governs the export and import of goods and services. Under the FTP, a list of items whose export is to be controlled has been identified. This is because of the nature of an item that may be used in military applications or weapons of mass destruction. They are dual-use items that can be used for both civilian/industrial and military application purposes. They are therefore called Dual-use goods and munitions goods. The list of these dual-use and munitions goods is called SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies).

The SCOMET items can be found in Appendix 3 of Schedule 2 of the ITC (HS). On the SCOMET list are items that require a license from the DGFT  HQ or the National Authorities.

Why the SCOMET Exports License is mandatory to export SCOMET items?

The Government of India and the export-import industry have a responsibility to ensure that exports are not accessed by proliferators, terrorist groups, and non-state actors. Any export that inadvertently lands up in the wrong hands may have implications for our national security and affect the name of the country in the international market. SCOMET is an important step to address such concerns.

Further, International supply chains are increasingly interconnected; our Import-Export partners would like to be assured that India’s regulations are in line with the highest standards. Adoption of these regulations is expected to act as an enabler for a greater role for Indian industry in global supply chains for high technology and value-added items and strategic sector items.

SCOMET Exports License items categories:

There are nine categories of items in SCOMET License.

Here are the SCOMET items categories and licenses that are issued by their respective licensing authority:

[SCOMET License List items classified in 9 categories]

SCOMET License items Export Control Licensing Agencies :

SCOMET items authorizations are issued by the following three agencies:

1. Directorate General of Foreign Trade (DGFT)
2. Department of Defence Production (DDP)
3. Department of Atomic Energy (DAE)

[Licensing of SCOMET items]

Validity Period of SCOMET Exports License?

The validity period of the SCOMET license is 24 months and it can extend for six months and a maximum of up to 1 year through revalidation by the DGFT regional office on the approval of DGFT Headquarters.

Customs Department has started strict checking w.r.t. SCOMET and hence it becomes necessary for all the exporters to understand this topic and its concept in detail in order to stay compliant. So after watching this video, you will be very clear as to What is SCOMET? How to check if the export product is falling under SCOMET or not? Where and how to apply? What are documents required? And finally what are the penal provisions if SCOMET Compliance is not followed. So let’s get started and we request you to Please watch this video till the end.

What is the Inter-Ministerial Working Group (IMWG) in DGFT?

The Inter-Ministerial Working Group (IMWG) is the authority of the group for granting the export license for SCOMET items. It evaluates applications for export licenses for SCOMET items (i.e. not on the nuclear "trigger" list and not in defence stores).

The members of the IMWG are as follows:

• • • • • Additional DGFT In charge of SCOMET (chair)
        • Representative of Ministry of External Affairs
        • Representative of Cabinet Secretariat
        • Representative of the Department of Atomic Energy
        • Representative of Defence Research Development Organization  (DRDO)
        • Representative of Department of Defense Production
        • Representative of Department of Indian Science Research Organization (ISRO)
        • Representative of Department of Biotechnology
        • Representative of Department of Chemicals
        • Representative of National Authority, Chemical Weapons Convention
        • Representative of Drug Controller General of India

The Meetings of the IMWG are held on average once a month, under the leadership of the Additional DGFT. The above member's NOC/Comments are required in respect of cases specific to their Department/Organization for SCOMET Export License.

What is the Global Authorisation for Intra-Company Transfers (GAICT) policy for SCOMET Exports License Items?

The policy on Global Authorisation for Intra-Company Transfers (GAICT) was introduced under the Indian export control regime to grant an advance bulk licence for re-export of certain SCOMET items/software/technology to overseas group companies availing of license exception for original exports of such items to India.

The GAICT policy does not require pre-export authorisation for intra-company re-exports of imported SCOMET items, software and technology under SCOMET category 8.

The GAICT policy covers the services as: design, encryption, research, development, delivery, validation & testing. The GAICT policy is valid for three (3) years from the date of issuance.

What all documents are required to apply for SCOMET Exports License?

• • • • • IEC
        • DGFT valid login credentials
        • Active Firm's Bank account
        • Purchase Orders of firms involved in the supply chain of the SCOMET products
        • Contract Agreement/Statement of work/Master Service agreement from foreign buyers, Consignee and End user
        • Technical Specification for each items to be exported
        • Copies of Bills of Entry into the destination country for items exported during last one year
        • Original End-use-cum-End user Certificate (EUC) from all the organizations involved in the supply of the products
        • Copy of DGFT Authorization letter for the same product, if any in case of application

How does the SCOMET Exports License process work internally?

Following the step-by-step procedures for SCOMET items Export License:

1. 1. 1. The exporters submit the application online through the DGFT website or submit a hardcopy to DGFT HQ.
      2. Then the license application is received by the DGFT through E-COM and then it is automatically forwarded to IMWG.
      3. The IMWG issues a No Objection Certificate (NOC) for SCOMET items Export License application
      4. If any IMWG agencies refuse to issue a NOC then DGFT will automatically reject the application.
      5. The exporter can get the SCOMET items Export License from the DGFT HQ, Udyog Bhawan, New Delhi

[SCOMET items Exports License Procedure]

How to apply for SCOMET Authorisation?

See the following steps to apply for SCOMET Authorization:

1. 1. 1. Go to the DGFT website Home page (dgft.gov.in)
      2. Services → Export Management System → > Licence for SCOMET exports
      3. Apply for Export Authorization of SCOMET Item, Software/Technology (ANF 2O(A))
      4. Apply for New Authorization
      5. An online application needs to be filed which is considered on a case-by-case basis
      6. Click on the "Start Fresh Application" button
      7. If you have existing draft then : click on "Proceed with Existing Application" Button
      8. Now you can add the 'item for export' manually
      9. Upload the required documents
      10. Make the payment and then click on the "Submit" button.
      11. To apply for Revalidation: Click on Apply for Revalidation of SCOMET authorisation
      12. To apply for Site Visit: Click on Apply for Site Visit of SCOMET authorisation
      13. To apply for Post Reporting for SCOMET Authorisation: Click on Apply for Revalidation of SCOMET authorization

What are the criteria considered for approval of SCOMET Exports items?

Before SCOMET Items are allowed to be exported, a thorough review of the end-use of the application is conducted. The following are the mandatory criteria for approval of SCOMET items:

1. 1. 1. The DGFT will verify the credentials of the end-user
      2. DGFT examines the credibility of the declaration of the end-use application of SCOMET products exported.
      3. As part of its assessment, the DGFT will examine the potential of items or technologies to be used in ways that do not align with India's national security or foreign policy goals.
      4. The declaration regarding the end-usage of the SCOMET items should be submitted to the DGFT.
      5. A risk assessment will be done on the likelihood that the exported items will fall into the hands of terrorists, terrorist groups, and non-state actors.

What if SCOMET products are exported without a SCOMET License?

How Afleo Consultants will help you to get SCOMET Items Export License/Authorization?

• • • We are a team of DGFT experts who can analyze the feasibility of the SCOMET items.
    • We assist our clients in the collection of the required documents.
    • After receiving the required documents, we verify the documents and prepare the application as per DGFT mandate.
    • We submit the application.
    • Our team coordinates with DGFT/Customs for expediting the licensing procedure.
    • We will draft replies to queries/deficiencies raised by the DGFT in regard to the export of SCOMET items.
    • In the stipulated time frame, we obtained the export license for SCOMET items.

• Circular No. 35/2015-20 dated 23.04.2020:
  Extensions in Import Validity period and Export obligation period in Advance Authorisations/DFIA notified due to COVID-19 Pandemic.

• Notification No. 57/2015-20 dated 31.03.2020:
  As per the above Notification, “Imports against Advance Authorisations for physical exports are exempted from Integrated Tax and Compensation Cess up to 31.03.2020” is extended up to 31.03.2021.