Amendment in Paragraph 2.79F in the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 to lay down the procedure for Global Authorization for Intra-Company Transfer (GAICT) of SCOMET items/software/technology - DGFT - 14/2015-2020

MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (DIRECTORATE GENERAL OF FOREIGN TRADE) PUBLIC NOTICE NO. 14 /2015-20 New Delhi, the 13th June, 2022 Subject : Amendment in Paragraph 2.79F in the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 to lay down the procedure for Global Authorization for Intra-Company Transfer (GAICT) of SCOMET items/software/technology F.No. 01/91/180/18/AM17/EC(S) (Computer No. 2862) .-In exercise of the powers conferred under Paragraph 1.03 of the Foreign Trade Policy (FTP) 2015-20 , the Directorate General of Foreign Trade (DGFT) hereby makes amendments in Paragraph 2.79 F to Handbook of Procedures (HBP) of FTP 2015-20 with immediate effect. 2. Existing entry at sub- Para 2.79F of the HBP of FTP 2015-20 shall be substituted as under: Para 2.79F - Global Authorisation for Intra-Company Transfers (GAICT) of SCOMET Items/Software/Technology A. Scope and Eligibility : Pre-export authorization will not be required, for export and/or re-export of SCOMET items including software and technology under SCOMET Category 8 (except items listed in Annexure-I), subject to the following conditions: i. where the export is an Intra-company transfer from the Indian parent company (applicant exporter) to its foreign subsidiary company or from the Indian subsidiary of foreign company (applicant exporter) to its foreign parent/another subsidiary of foreign parent company and; Note : In case of third party involvement in the supply chain, the end user has to be a foreign parent / another subsidiary of foreign parent company or a subsidiary company of Indian company. ii. where the transfer fulfils the conditions mentioned at (a) to (f) below: a. The items/software/technology to be exported/re-exported is based on a Master Service Agreement / Contract between the Indian parent company/Indian subsidiary of foreign company and foreign subsidiary of Indian company/foreign parent company of Indian subsidiary for carrying out certain services but not limited to design, encryption, research, development, delivery, validation, calibration, testing, related services, etc.; Note 1 : As a result of the service carried out by the Indian exporter in case of re-export, the items/software/technology should not undergo change in classification. Note 2 : The list of services mentioned above is illustrative, not exhaustive. However, the final decision to approve a GAICT authorization lies with the relevant authority. b. These items including software and technology are to be exported/re-exported to the countries listed in Table 1 below (entire supply chain including any third party should be in the countries listed in Table 1 to this Public Notice); Table 1 Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, United States. Note : However, IMWG on a case to case basis may allow countries other than those listed in Table 1 considering description/end use/end user of the item. c. The applicant exporter declares that the exported items would be used for the purposes for which it is intended by the foreign subsidiary of Indian company / foreign parent company / another subsidiary of foreign parent company, as the case may be; d. The applicant exporter furnishes either a certified/approved Internal Compliance Programme (ICP) or demonstrates compliance to the ICP of the foreign parent company or ICP certified by the Compliance Manager of the company or certified by any Government agency such as Authorized Economic Operator (AEO) scheme etc. e. The exporter agrees to allow on-site inspection, if required by the DGFT or authorized representatives of Government of India; f. No export authorization would be granted for UNSC sanctioned destinations or countries; g. No export authorization shall be granted to an exporter specified at (i) above if they have come to adverse notice previously; h. The exporter is granted a Global Authorisation for Intra-Company Transfers (GAICT) as per procedure mentioned in para 2.B below. B. Procedure for grant of Global Authorization for Intra-Company Transfers (GAICT) Filing and Assessment of Application a. In respect of export/re-export of SCOMET items including software and technology ,the applicant exporter shall submit an application for GAICT through online SCOMET portal and attach information in proforma - ANF 2O(b); b. The application would be assessed for the issue of GAICT by Inter-Ministerial Working Group (IMWG) based on the submission of the application and other supporting documents by the applicant exporter in the prescribed proforma; i. Documentary proof of the corporate relationship between the Indian parent company (applicant exporter) and its foreign subsidiary company or between the Indian subsidiary of foreign company (applicant exporter) and its foreign parent / another subsidiary of foreign parent company ; ii. Classification of item including software and technology in SCOMET (indicating SCOMET category and sub-category); iii. Documentary proof of License Exception /Temporary license from the country of the parent company abroad or from subsidiaries of the parent company abroad, if available (optional) iv. Detailed description of the item intended to be exported with relevant technical details with specifications, such as model, part number, etc. and in case of software/technology, relevant details like encryption algorithm, key length, encryption functionality, eligibility under cryptography note etc. to be provided (if applicable); v. In case of third party involvement in the supply chain, a clear contract /service agreement/ Purchase order has to be furnished specifying SCOMET item description. vi. Certified/approved ICP of the Indian parent company or self-certified copy of the ICP of the foreign parent company being adopted by Indian subsidiary of foreign company along with an undertaking thereon; vii. Undertaking on the letterhead of the firm duly signed and stamped by the authorised signatory: a. To allow on-site inspection, if required by the DGFT or authorized representatives of Government of India; b. The applicant exporter declares that the exported items would be used for the purposes for which it is intended by the foreign subsidiary of Indian company / foreign parent company / another subsidiary of foreign parent company, as the case may be; c. The applicant exporter declares that subsequent to issue of export authorisation, if the licensee has been notified in writing by DGFT or if they know or has reason to believe that an item may be intended for military end use, the exporter would not be eligible for GAICT for export of that/those item(s) and would apply separately to DGFT for a fresh authorisation in terms of regular policy. [DGFT s PN No. 27 dated 21.09.2017 for catch-all policy may also be referred]. viii. The Company must ensure that: a. They shall submit original End User Certificate in the prescribed format within 30 days of filing application and in case of subsequent exports, within 30 days of delivery at destination point, after issue of export authorisation; b. They have Agreement/purchase order, excerpt of contract from entity (consignee) receiving the items which states the export is for a permitted use ; c. The documents include the name contact number and email id of the authority signing the EUC. ix. A precise and clear contract /service agreement/ Purchase order has to be furnished indicating item description in case of third party involvement in the supply chain (if applicable) x. Additional details, if any, sought by DGFT C. Post reporting for re-export of items/software/technology under GAICT a. The Indian exporter shall submit post-shipment details of each transfer/consignment of exports of SCOMET items/software/technology under GAICT to the SCOMET Division of DGFT (Hqrs), New Delhi, via E-mail ([email protected]) or a procedure as prescribed by DGFT, on quarterly basis (March / June / September / December), by the end of subsequent month of each quarter, in respect of the exports made in the previous quarter; b. The post-shipment details shall be submitted in proforma ANF 2 O (c) along with a copy of EUC in Appendix 2S (iv) within the timelines mentioned above, from the foreign subsidiary company or foreign parent company / another subsidiary of foreign parent company; c. Failure to do so may entail imposition of penalty and / or suspension/revocation of GAICT. Note: Revised ANF (Aryat Niryat Form) - ANF 20(b), ANF 20(c) and End Use Certificate proforma Appendix 2S (iv) enclosed with this Public Notice. D. Record Keeping The exporter will be required to keep records of all the export documents, in manual or electronic form, in terms of Para 2.73 (c) of HBP, for a period of 5 years from the date of GAICT issued by DGFT. E. General conditions a. GAICT would not be issued in case of items including software and technology to be used to design, develop, acquire, manufacture, possess, transport, transfer and / or used for chemical, biological, nuclear weapons or for missiles capable of delivering weapons of mass destruction and their delivery system; b. GAICT would not be issued for countries or entities covered under UNSC embargo or sanctions list or to the countries or entities assessed for risk of proliferation concern, based on national security and foreign policy considerations; c. In case of inclusion or amendment of items (including software and technology) or inclusion of new companies or amendment in existing companies in the supply chain, the applicant exporter will obtain prior permission of DGFT with relevant details; d. IMWG shall reserve the right to deny issuance of authorization GAICT for any reason and also relax any provision of the policy, if so required in exceptional cases. F. Re-exports / re-transfer of the items including software and technology (processed or incorporated) Further re-exports / re-transfers of the items including software and technology (processed or incorporated) from the foreign subsidiary company or foreign parent company / another subsidiary of foreign parent company to end users in other countries would be subject to the export control regulations of the country of the foreign subsidiary of Indian company or foreign parent company / another subsidiary of foreign parent company. G. Validity a) GAICT issued for intra-company transfers of SCOMET items including software and technology shall be valid for a period of three years from the date of issue of GAICT; b) GAICT cannot be revalidated in terms of Paragraph 2.80 of HBP of FTP 2015-20 . H. Suspension / Revocation GAICT issued shall be liable to be suspended by the DGFT on receipt of intimation about initiation of any inquiry from the country concerned or from any domestic agency. GAICT shall be revoked on receipt of an adverse report on proliferation concern or for non-submission of mandatory reports/documents within the prescribed timelines or for non-compliance of any of the condition of this Public Notice. 3. Effect of this Public Notice : Existing entry at Paragraph 2.79F has been substituted in the Handbook of Procedures (HBP) of the Foreign Trade Policy (FTP) 2015-20 to amend the procedure for issue of Global Authorisation for Intra-Company Transfer (GAICT) of SCOMET items including software and technology. Henceforth, GAICT policy would be applicable only for export / re-export of items, including software and technology under SCOMET Category 8 (except items listed in Annexure-I), and to only the countries listed in Table 1 above. Revised ANF (Aayat Niryat Form) - ANF 20(b), ANF 20(c) and End Use Certificate proforma Appendix 2S (iv) for applying for GAICT also notified. SANTOSH KUMAR SARANGI, Director General of Foreign Trade Ex-officio Addl. Secy.