Introduction: The International Financial Services Centres Authority (IFSCA) has released Circular 415/IFSCA/Consolidated Operating Guidelines/2023-24 on December 13, 2023. This circular addresses the import of UAE Good Delivery (UAEGD) Gold through the India International Bullion Exchange (IIBX) by valid India-UAE Tariff Rate Quota (TRQ) holders. This article provides an in-depth analysis of the key points outlined in the circular.
Detailed Analysis:
1. Background and Regulatory Update: The article begins by providing background information on the India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) and its implications on the import policy for ITC(HS) Code 71081200. The regulatory update from DGFT on November 20, 2023, is highlighted, allowing valid India-UAE TRQ holders to import gold through IIBX.
2. Eligibility Criteria for India-UAE TRQ Holders: The circular outlines the eligibility criteria for entities holding India-UAE Tariff Rate Quota (TRQ) licenses. These entities, as allotted by DGFT, can now apply to be notified as ‘India-UAE TRQ holders’ by IFSCA, enabling them to participate in IIBX for UAEGD gold imports.
3. Participation Process on IIBX: Valid India-UAE TRQ holders can participate on IIBX through Bullion Trading Members, with a focus on ‘buying’ UAEGD gold. Quota limitations and other terms and conditions are emphasized to ensure a regulated and transparent trading environment.
4. Standard Operating Procedures (SOPs): The article highlights the collaborative effort between IIBX and India International Depository IFSC Limited (IIDI) in establishing Standard Operating Procedures (SOPs) for onboarding valid India-UAE TRQ holders. This includes compliance with AML CFT guidelines and relevant regulations.
5. Compliance and Import Guidelines: Import by valid India-UAE TRQ holders through IIBX is to adhere to TRQ Scheme guidelines and Handbook of Procedures under the Foreign Trade Policy prescribed by DGFT and Customs. Compliance with RBI regulations, including the ‘Master Direction – Import of Goods and Services,’ is crucial.
6. Withdrawal of Previous Circular: The article mentions the withdrawal of the previous IFSCA Circular (Ref: 415/IFSCA/Consolidated Operating Guidelines/2022-23) dated January 11, 2023, emphasizing the importance of adhering to the updated guidelines in the current circular.
7. Legal Basis and Contact Information: The circular’s legal basis under the International Financial Services Centres Authority Act, 2019, and relevant regulations is explained. Contact information for Kamlesh Sharma, Chief General Manager of the Department of Metals and Commodities, is provided for further clarification.
Conclusion: The IFSCA Circular provides a comprehensive framework for the import of UAEGD Gold through IIBX by valid India-UAE TRQ holders. Market participants, including Bullion Exchange, Bullion Clearing Corporation, Bullion Intermediaries, and Vault Managers in the International Financial Services Centre, are urged to familiarize themselves with the guidelines and ensure strict adherence for a smooth and compliant trading process. For further details, stakeholders can refer to the complete circular available on the IFSCA website.
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International Financial Services Centres Authority
CIRCULAR
415/IFSCA/Consolidated Operating Guidelines/2023-24
December 13, 2023
To
Bullion Exchange in the International Financial Services Centre (IFSC)
Bullion Clearing Corporation in the IFSC
Bullion intermediaries in the IFSC
Vault Managers in the IFSC
All market participants on the Bullion Exchange in the IFSC
Entities holding TRQ allotted by DGFT under India-UAE CEPA
Dear Sir/Madam
Import of UAEGD Gold through IIBX by valid India-UAE TRQ holders
1. The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, Government of India, vide Notification No.44/2023 dated November 20, 2023, has, inter alia, amended the import policy condition for ITC(HS) Code 71081200 of Chapter 71 of ITC(HS) 2022, Schedule -I (Import Policy) stating that ‘valid India-UAE TRQ holders as notified by IFSCA can import gold through IIBX against the TRQ and can obtain physical delivery of the same through IFSCA registered vaults located in SEZs as per the guidelines prescribed by the IFSCA’.
2. The India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) signed on February 18, 2022, includes, inter alia, the promotion of bilateral trade in bullion, and gems and jewellery
3. With a view to facilitating their participation on the India International Bullion Exchange (IIBX) for import of UAE Good Delivery (UAEGD) Gold under the India- UAE CEPA, it has been decided that the valid holders of India – UAE Tariff Rate Quota (TRQ) license / authorisation as allotted by DGFT shall now be eligible to apply for being notified as ‘India-UAE TRQ holders’ by the IFSCA, for the purpose of such imports.
4. After being notified by the IFSCA, such valid India-UAE TRQ holders shall be permitted to participate on IIBX, through Bullion Trading Members, for transacting in (‘buying’ only) UAEGD gold for import under the India-UAE CEPA, subject to the quota, and other applicable terms and conditions.
5. QJs that hold valid TRQ licence/authorization under the India-UAE CEPA shall also be permitted to import UAEGD gold through IIBX under the India-UAE Such QJs shall not be required to apply separately for being notified as ‘India-UAE TRQ holders’ by the IFSCA.
6. IIBX, in co-ordination with India International Depository IFSC Limited (IIDI), shall prescribe the Standard Operating Procedures (SOPs) for the process of onboarding the valid India-UAE TRQ
7. IIBX, in coordination with IIDI, shall ensure that the onboarding of valid India-UAE TRQ holders is as per the guidelines prescribed under the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022, as amended from time to time. The valid India-UAE TRQ holders shall also undertake to abide by the “AML CFT guidelines for dealers in precious metals and precious stones, 2023” issued by the Directorate General of Audit Indirect Taxes and Customs under the Prevention of Money Laundering Act, 2002, as amended from time to
8. The import by valid India-UAE TRQ holders through IIBX, under the India-UAE CEPA, shall be in accordance with the TRQ Scheme governed by the applicable guidelines and Handbook of Procedures under the extant Foreign Trade Policy prescribed by DGFT and Customs on import of gold through
9. The valid India-UAE TRQ holders shall ensure that they undertake the import of UAEGD gold through IIBX, including the remittance of funds for the purpose, in compliance with the provisions of the ‘Master Direction – Import of Goods and Services’ and other relevant Circulars/Guidelines/Notifications issued by the RBI from time to time regarding the import of
10 .The IFSCA Circular (Ref: 415/IFSCA/Consolidated Operating Guidelines/2022-23) dated January 11, 2023, shall stand withdrawn from the date of issuance of this
11. This Circular has been issued in exercise of the power conferred under Section 12 of the International Financial Services Centres Authority Act, 2019 r/w Regulation 58 of the International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020 and in pursuance of DGFT Notification mentioned in Para 1 of this Circular.
12. A copy of this Circular is available on the website of International Financial Services Centres Authority at ifsca.gov.in at “Legal →Circulars”.
Yours faithfully
(Kamlesh Sharma)
Chief General Manager
Department of Metals and Commodities
email: kamlesh.sharma27@ifsca.gov.in
Tel: +91 79 6180 9810
