Government of India

Ministry of Commerce & Industry

Department of Commerce

Udyog Bhawan

Public Notice No. 07/2015-20

New Delhi, the 17 May, 2017

Subject:- SCOMET Export permission for ‘Stock & Sale’ purposes

In exercise of the powers conferred under Paragraph 1.03 of the Foreign Trade Policy, 2015- 20, the Director General of Foreign Trade, hereby makes the following amendments in Para 2.79A of the Handbook of Procedures, 2015- 2020 with immediate effect:

2. The revised Para 2.79A would read as follows:

2.79A. Export permission for “Stock and Sale”

i)  ‘Stockist’ refers to the entity abroad to whom the SCOMET items are originally exported by Indian principal/ wholly owned subsidiary. The Stockist entity should be a subsidiary/ principal company abroad of the Indian exporter.

ii) Applications for grant of authorization for export of SCOMET items for ‘Stock & Sale’ purpose shall be evaluated/ considered by IMWG subject to the conditions prescribed as under.

a) Application for Authorization for Export of SCOMET items for ‘Stock & Sale’ purpose to the Stockist

i. Export shall be permitted only from the principal company/the wholly owned subsidiary in India to their subsidiaries/ principal company abroad on the basis of an End Use cum End User certificate (EUC) from the latter for ‘stock & sale’ purposes (as per Appendix 2S(iii)), when considered appropriate from the point of view of security and other critical considerations. The exhaustive list of countries to which exports would be done by the stockist needs to be indicated in the EUC for ‘stock & sale’ purposes. Documentary proof regarding relationship between exporter and stockist entity needs to be submitted at the time of application.

ii. The Stock & Sale Authorization holder would submit a statement of exports made from India, inventory with the stockist and transfers made to final end-users as on December 31st of each calendar year by 31st January of the following year. A consolidated statement would be required to be submitted within a period of 3 months from the expiry of the Stock & Sale Authorization.

iii. The items exported to the stockist entity under this authorization should be transferred to the final end-user within the validity period of the authorization. The authorization may be re validated as per the procedure mentioned in para 2.80 of HBP.

iv. No applications for Authorization for Export of SCOMET items for ‘Stock & Sale’ purpose would be considered for items falling in Category 0, 1C and 6 of the SCOMET list.

v. No export Authorization for ‘Stock & Sale’ purpose shall be issued for ‘Technology’ in any category.

(b) Application for permission for re-export/re-transfer from ‘Stockist to Ultimate end-user(s)

(i) Applications for re-export/re-transfer of items from the stockist entity) to the end-user to be submitted to DGFT(Hq) as per ANF 2O(a) along with the following documents (hereinafter referred to as required documents):-

a) End-use/ End- user certificate from each link in the supply chain as per Appendix 2S (i)/2S(ii), as applicable

b) Purchase orders/ Invoices

c) Technical specifications of the product to be transferred (only if there is any value addition in the product by the stockist)

(ii) Re- transfer within the same country by the stockist:-

a) For any further transfer of these items by the stockist entity to whom the items are originally exported by Indian principal/ wholly owned subsidiary) to entity (ies), including end users, in the same country, the former shall obtain the required documents from each link in the supply chain and forward the same to the Indian applicant/ licensee for the purpose of submission to DGFT(Hq) for seeking prior permission for such transfer. The IMWG may, however, relax this requirement of prior permission based on a Risk Assessment for such within same country sale/transfer.

b) In case of same country sale/ transfer by the stockist entity where IMWG has agreed to relax the requirement of prior permission, the required documents shall be submitted by the Indian applicant/ licensee within 3 months of any such transfer. In such case, no link in the supply chain should be an entity outside the country and items should remain within the country.

c) Country would denote an independent sovereign entity which is a distinct national entity in political geography. Hence, transfers within an economic union or a customs union would not qualify as “same country transfers”.

(iii) Re- export outside the country by the stockist :- Application for re-export by the stockist entity to entity(ies) outside its country, shall be forwarded by the stockist entity to the Indian applicant/ licensee, with the required documents from all links in chain of supply for the purpose of submission to DGFT(Hq) for seeking prior permission for such transfer.

(iv) Applications for re- export/ re- transfer of SCOMET items from the stockist entity to the end-user for repeat orders shall be considered by IMWG on automatic basis, subject to the condition that the product along with the technical specifications; the foreign buyer; the consignee or the intermediaries, if any; the end user; the end use and the country of destination, shall be the same as the earlier permission.

3. ANF 2O(a), required for application for re-export/re-transfer of items from the stockist entity to the ultimate end-user, is being annexed with this Public Notice.

4. Appendix- 2S (iii), the format for the End use cum End User Certificate (EUC) in case of export of SCOMET items for stock and sale purpose, is being annexed with this Public Notice.

5. Effect of this Public Notice: The provision of SCOMET export authorization for “Stock and Sale” has been clarified and the procedure to be followed when seeking permission for re-export/ re transfer of SCOMET items by the stockist entity to the ultimate end- user has been framed.

(A.K. Bhalla)

Director Gen of Foreign Trade

E-mail: dgft@nic.in

(Issued from F.No.01/91/162/40/AM12/EC(S)

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