Export Controls on Specified Goods: the WMD Chapter

In one line

Chapter IVA, inserted by the Amendment Act of 2010, takes the export of goods, services and technology connected with weapons of mass destruction out of the ordinary trade regime and hands it to the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act 2005. Section 14A applies that Act; section 14B imposes transfer controls; section 14C is a catch-all turning on the exporter's knowledge of the intended end use; section 14D allows a licence to be suspended without a prior hearing; and section 14E borrows the penalties, including imprisonment, and requires the previous sanction of the Central Government for a prosecution.

Why a separate chapter

Because export control for security is a different exercise from export control for economics. The rest of the FTDR Act balances development against regulation: it asks whether trade in a commodity should be free, restricted or canalised, and the answer changes with the balance of payments and industrial policy. This chapter asks a different question, whether a shipment will help someone build a nuclear, chemical or biological weapon, and there the answer does not change with the trade cycle.

The immediate cause was India's international position. India is a Nuclear Weapon State outside the Non-Proliferation Treaty, and its access to advanced dual-use technology depends on persuading supplier countries that its own export controls are as good as theirs. United Nations Security Council Resolution 1540 (2004) required every State to establish domestic controls to prevent non-State actors acquiring weapons of mass destruction, and India's answer was the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act 2005. Chapter IVA of this Act, inserted in 2010, wires that statute into the trade machinery, so that the Directorate General of Foreign Trade administers the licensing and the WMD Act supplies the substantive prohibitions and the punishments.

The strategy worked. India joined the Missile Technology Control Regime in 2016, the Wassenaar Arrangement in 2017 and the Australia Group in 2018, and its control list is aligned with theirs. Membership of the Nuclear Suppliers Group has still not followed.

The operative list is the SCOMET list, that is Special Chemicals, Organisms, Materials, Equipment and Technologies, published as Appendix 3 to Schedule 2 of the ITC (HS) Classification of Export and Import Items. It is arranged in numbered categories running from nuclear materials at one end through toxic chemicals, micro-organisms and toxins, materials and materials-processing equipment and aerospace systems, to the munitions list and the dual-use electronics and information security items at the other. An export of anything on that list requires an authorisation from the Directorate.

The definitions that govern the chapter

"Specified goods or services or technology", section 2(l), means goods, services or technology the export, import, transfer, re-transfer, transit and transshipment of which is prohibited or restricted because of imposition of conditions on the grounds of their being pertinent or relevant to India as a Nuclear Weapon State, or to the national security of India, or to the furtherance of its foreign policy or its international obligations under any bilateral, multilateral or international treaty, covenant, convention or arrangement relating to weapons of mass destruction or their means of delivery to which India is a party, or its agreement with a foreign country under the foreign trade policy.