The Foreign Trade (Development & Regulation) Act, 1992, has been amended. The amendments will come into force on such date as the central government may, by notification in the Official Gazette, appoint. Here are some of the salient features of the amendments that the trade should take note of.
The government will now have powers to regulate, prohibit or restrict import or export of services and technology but this provision will apply only when the service or technology provider is availing of any benefits under the Foreign Trade Policy (FTP) or when he is dealing with specified services or technologies. A detailed definition of specified goods, services or technologies is added in the Act mainly to enable India live up to its international commitments under various treaties and obligations as a nuclear weapons state.
The definition of services includes all services covered under the General Agreement on Trade in Services (GATS). The four modes of delivery of services given in the GATS agreement also are covered in the definition of imports and exports of services.
At present, surge in imports that causes serious injury to domestic trade is reason enough to impose safeguard duty. As a further measure of safeguard, the Act envisages imposition of quantitative restrictions in such cases. In other words, in case increased imports of any item hurt the domestic industry, the government can not only impose safeguard duty but also restrict or prohibit imports of that item. Rules will specify the procedures to be followed for imposition of quantitative restrictions.
In regard to controls on exports of specified goods, services and technology, the Act mandates application of Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act of 2005. The provisions for transfer controls, catch-all controls, suspensions and cancellation of licenses, offences and penalties have been spelt out. No court can take cognizance of offences punishable in regard to specified goods, services and technology without the previous sanction of the central government.
The minimum penalty for contravention of any provisions of the Act, Rules and Orders made under the Act, or the Foreign Trade Policy has been raised from rupees thousand to rupees ten thousand. The penalty or any amount due under a bond can be recovered by deducting the same from any money owing to such person by the licensing authorities or Customs or by selling any goods belonging to such person or by recovering it through the district collector as if it were an arrear of land revenue. The provisions for search, seizure and suspension or cancellation of Importer Exporter Code number or licences have also been strengthened to include goods relating to provision of services and technology. Some provisions are widened to cover licence, certificate, scrip or any other instrument bestowing financial or fiscal benefits.
The amendments strengthen the hands of the government in dealing with importers and exporters of specified services and technology and of goods connected with specified services and technology, in dealing with a surge in imports of any goods and in dealing with any contravention or even default in fulfilling export obligations.
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The government should now take a careful look at some of the outdated provisions of Foreign Trade (Development and Regulation) Rules, 1993, and Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993.
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