Transcript No Slide Title

U.S.-India Dual-Use Export
Policies and Procedures
November 2004
Purpose of U.S. Export Controls
• Export controls are used to further U.S.
– National security,
– Foreign policy, and
– Economic interests
U.S. Export Control Regime
• Controls on “dual-use” items – commodities, software,
and technology that have both commercial and military
application – are administered by the U.S. Department of
Commerce.
• Controls on munitions items are administered by the
Department of State.
Dual-Use Export Controls
• The U.S. Export Administration Regulations (EAR) set forth a
list of dual-use and commercial items that are subject to
control – called the Commerce Control List (CCL).
• Items that are listed in the CCL are controlled for various
reasons, including national security (NS), nuclear proliferation
(NP), missile technology (MT), chemical/biological (CB), and
anti-terrorism (AT) reasons.
• Depending on the reason for control of the item and the
country of destination, a license may be required for an export.
• A license exception may be available depending on the nature
of the transaction.
• All dual-use items not specifically listed on the CCL are
categorized as EAR99 items, which generally do not require a
license to most destinations.
General Licensing Requirements for India
• There are no sanctions currently in place against India. As
with exports to other countries, certain exports to India may
require licenses.
• Most dual-use items exported to India do not require licenses.
• Many commodities controlled on the CCL may be exported to
India using a license exception.
– Computer technology and software are eligible for certain
license exceptions.
– More than 75 percent of encryption products are eligible
for export to India under a broad license exception.
General Licensing Requirements for India (Cont.)
• EAR99 items (items not specified on the CCL) may be shipped
to most end users in India without an export license. The vast
majority of U.S. commercial exports fall into this category.
– Exports of EAR99 items to end users on the Entity List,
except for Indian Space Research Organization
subordinates, require a license.
– During Fiscal Year 2004, over one third of dual-use license
applications processed for India were for EAR99 items. The
United States approved approximately 83 percent of these
applications that required a license.
Nuclear Missile and Chemical Biological Items
• A license is required to export to India items controlled for
nuclear (NP), missile (MT), or chemical/biological weapons
(CB) proliferation reasons.
– Such licenses are reviewed on a “case-by-case” basis and
are not subject to a policy of denial.
– Such licenses generally are approved unless the export
would make a material contribution to nuclear, missile, or
chemical/biological programs of concern, or pose an
unacceptable risk of diversion to such programs.
The Entity List
• Items intended for Indian companies on the Entity List still
require an export license.
– There is 1 primary Indian organization and 14 subordinate
Indian organizations on the Entity List.
– There is a “presumption of approval” for applications to
export EAR99 items to most listed entities. Recent
regulatory changes have removed EAR99 license
requirements for some Indian entities.
– Applications to export other items are subject to a “caseby-case” review.
– The complete list of Indian end users identified on the
Entity List is located at:
http://www.bis.doc.gov/Entities/Default.htm
“Catch-All” Controls for Missile Programs
• On November 8, 2004, a new missile “catch-all” rule that strengthens
and expands the current missile end-use/end-user controls was
published. The rule eliminates references to specific missile projects
of concern.
• An exporter or reexporter must obtain a license for any item subject
to the EAR if the exporter or reexporter knows or is informed that:
─ the item is going to a country in group D:4 for use on a rocket or
unmanned air vehicle (UAV) capable of achieving a minimum
range of 300 kilometers;
─ the item is going any where in the world for use on a rocket or
UAV to delivery chemical, biological, or nuclear weapons; or
─ the item is going to a country in group D:4 for use on a rocket or
UAV for which the range and payload characteristics or the
intended end use cannot be determined by the exporter.
•
Exports to Indian missile programs of concern will be denied.
“Catch-All” Controls for Nuclear Programs
• U.S. exporters must apply for a license if they know or have
reason to know that their export will be used in certain nuclear
activities in India.
– Items intended to ensure the safety of safeguarded civilian
nuclear power facilities generally will be reviewed
favorably.
– Exports of all EAR99 items – including “balance of plant”
commodities – generally will be reviewed favorably for use
in safeguarded facilities.
– Exports to specified unsafeguarded nuclear activities and
to nuclear weapons programs will be denied.
“Catch-All” Controls for
Chemical/Biological Weapons Activities
• U.S. exporters must apply for a license if they know or have
reason to know that their export will be used in certain
chemical/biological weapons activities.
– A license is required for any export or reexport if at the
time of export or reexport you know that the item will be
used in the design, development, production, stockpiling,
or use of chemical/biological weapons.
– License applications will be reviewed to determine if the
export or reexport would make a material contribution to a
program of concern.
Technology Exports To India
• As a Group B Country, India is eligible to receive advanced
technology, software, and know-how without a license (e.g.,
under license exceptions TSR and CTP):
– Computer Technology and Software
– Semiconductor Design and Manufacturing Technology
Deemed Exports
• A “deemed export” is the release in the United States of
controlled technology or source code to a foreign national.
• Indian nationals can work the United States in high technology
firms in many cases without Government approval (under
license exception).
• Where deemed export licenses have been required for Indian
nationals, BIS processed 65 cases without a denial during
FY2004.
• The average processing time for new deemed export cases was
approximately 46 days during FY2004.
Dual-Use License Applications for Exports to India
• Fiscal Year 2003 (October 2002-September 2003)
– Approved: 619 ($57 million)
– Denied: 72 ($15 million)
– TOTAL: 691 ($72 million)
– Returned Without Action: 229 ($36 million)
• Total Fiscal Year 2003 U.S. trade with India: approximately $4.8
billion
• Fiscal Year 2004 (October 2003-September 2004)
– Approved: 912 ($90 million)
– Denied: 103 ($13.6 million)
– TOTAL: 1,015 ($103.7 million)
– Returned Without Action: 264 ($28.3 million)
– Fiscal Year 2004 U.S. trade with India: approximately $5.7
billion
Analyzing the Statistics
• Most trade with India does not require a license.
– The United States requires a license for only a small percentage
of overall trade with India. Approximately one percent of all U.S.
trade with India requires an export license.
• The United States approves a vast majority of exports that require a
license.
– In Fiscal Year 2004, the United States approved approximately
90 percent of the applications that required an export license.
• License application processing is timely and efficient.
– Despite the increasing number of applications, dual-use export
license applications continue to be processed in approximately
40-45 days.
Analyzing the Statistics (continued)
• Fewer export license applications are denied for India each year.
– Of the export applications that required a license in FY 2003
and 2004, only 10 percent were denied – down from 15
percent in FY 2002.
• Many submitted applications do not require a license.
– Of the cases that are returned without action, most are
returned to the applicant because the exports were eligible
for shipment under a license exception or no license was
required.
U.S.-India Next Steps in Strategic Partnership (NSSP)
• In September 2004, the United States published a regulation
implementing the Phase One of the NSSP export licensing
commitments. The regulatory changes include:
– Removing the Indian Space Research Organization (ISRO)
Headquarters from the Entity List;
– Removing licensing requirements for low-level dual-use items
exported to ISRO subordinate entities listed on the Entity List;
and
– Expanding the “presumption of approval” policy for all dual-use
items not controlled by the Nuclear Suppliers Group (NSG), if
intended for export to the “balance of plant” portion of an Indian
nuclear facility subject to international safeguards.
Effect of Phase One
• Phase One licensing changes are expected to:
–
Reduce the number of applications for ISRO subordinate
entities by approximately 250 applications per year, or
approximately 75 to 85 percent.
–
Reduce the total number of applications for all dual-use
exports to India by approximately 20 to 25 percent.
–
Since the implementation of this new licensing policy in
September, the Department of Commerce has returned
over 23 license applications for exports to these end
users because a license was no longer required.
Summary
• Export licensing requirements apply to only a very small
percentage of overall U.S.-India trade.
• Many items subject to export controls can be exported to India
without a license or under a license exception.
• Exports of controlled items to India will be approved provided that
such items do not contribute to or pose a risk of diversion to
Indian nuclear or missile programs.
• Applications for controlled items are reviewed on a “case-bycase” basis; there is no longer any policy of denial.
• The United States and India are committed to working toward
enhancing a qualitatively transformed relationship and continuing
efforts to stimulate bilateral high-technology commerce.