U.S.India DualUse Export Policies and Procedures

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U.S.-India Dual-Use Export Policies and
Procedures
November 2004
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Purpose of U.S. Export Controls

• Export controls are used to further U.S.
• National security,
• Foreign policy, and
• Economic interests

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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.

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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.

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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 e
ligible for certain license exceptions.
More than 75 percent of encryption products are
eligible for export to India under a broad
license exception.
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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.
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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 unle
ss 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.
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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 ap
plications 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 case-by-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
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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 reexp
orter 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 countr
y in group D4 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 g
roup D4 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.
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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 saf
eguarded 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 nu
clear activities and to nuclear weapons programs
will be denied.
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Catch-All Controls forChemical/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.
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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
  

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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.
  
  

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Dual-Use License Applications for Exports to India
Fiscal Year 2003 (October 2002-September 2003)
Approved 619 (57 million) Denied 72 (15 mil
lion) TOTAL 691 (72 million) Returned Withou
t Action 229 (36 million) Total Fiscal Year 200
3 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) Returne
d Without Action 264 (28.3 million)
Fiscal Year 2004 U.S. trade with India
approximately 5.7 billion
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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 app
lications, dual-use export license applications
continue to be processed in approximately 40-45
days.
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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 requir
e a license. Of the cases that are returned witho
ut action, most are returned to the applicant
because the exports were eligible for shipment
under a license exception or no license was
required.
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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 Res
earch Organization (ISRO) Headquarters from the
Entity List Removing licensing requirements fo
r low-level dual-use items exported to ISRO
subordinate entities listed on the Entity List
and Expanding the presumption of approval po
licy 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.
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Effect of Phase One
Phase One licensing changes are expected to
Reduce the number of applications for ISRO subor
dinate 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.
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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-by-case 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.