On January 15, 2025, the Directorate General of Foreign Trade (DGFT) issued guidelines outlining the Standard Operating Procedure (SOP) for the voluntary disclosure of non-compliance or violations concerning the export of Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) items. SCOMET items are dual-use goods, serving both civilian and military purposes, and their export is strictly regulated.
Key Aspects of the Voluntary Disclosure Guidelines:
- Eligible Violations for Disclosure: The DGFT encourages exporters to voluntarily disclose certain violations, including:
- Exporting SCOMET items without prior authorization.
- Unintentional exports to entities or individuals sanctioned by the United Nations Security Council (UNSC).
- Diversion of items not controlled under SCOMET for the manufacturing of weapons of mass destruction or their delivery systems.
- Use of export authorizations in the name of entities resulting from mergers, acquisitions, or name changes without proper amendments.
- Failure to obtain necessary licenses for facilitating site visits, on-site verifications, or access to records by foreign organizations.
- Non-compliance with reporting or bookkeeping requirements.
- Situations where exporters apply for regularization based on communications received from DGFT, Customs, or other government authorities.
- Disclosure Process: Exporters aware of any non-compliance are encouraged to promptly submit a voluntary disclosure to the DGFT, detailing the nature of the violation and any corrective actions taken. This proactive approach demonstrates a commitment to compliance and may mitigate potential penalties.
- Evaluation of Disclosures: An Inter-Ministerial Working Group (IMWG) within the DGFT reviews each voluntary disclosure on its merits. The IMWG considers factors such as:
- Whether the violation was intentional or inadvertent.
- The extent of cooperation demonstrated by the exporter.
- The implementation of corrective measures to prevent future violations.
- Potential Outcomes: While voluntary disclosures may lead to more favorable outcomes, the DGFT clarifies that such disclosures do not automatically exempt exporters from penalties. Depending on the case's specifics, penalties, administrative actions, or criminal prosecutions may still apply.
These guidelines aim to promote transparency and encourage exporters to adhere strictly to export control regulations, thereby strengthening India's position in international export control regimes.
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