The Directorate General of Foreign Trade ( DGFT ) has released a Standard Operating Procedure ( SOP ) for voluntary disclosure concerning non-compliance with Special Chemicals, Organisms, Materials, Equipment, and Technologies ( SCOMET ) regulations.
SCOMET items are sensitive products that include dual-use goods and technologies, capable of both civilian and military applications. The regulation of their trade is critical for national security, international obligations, and non-proliferation objectives. Non-compliance with these regulations can lead to severe penalties, including suspension of licenses, legal action, and loss of credibility for businesses.
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The newly notified SOP outlines the procedure for exporters to voluntarily disclose instances of non-compliance. By adopting this mechanism, the DGFT seeks to promote transparency and encourage self-correction among exporters.
The framework provides clarity on submitting disclosures, timelines, and resolution procedures, emphasizing a balanced approach to enforcement and support for honest businesses.
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Under the SOP, exporters who voluntarily report violations before the initiation of enforcement actions may benefit from reduced penalties, subject to the nature and extent of non-compliance. This initiative aligns with global best practices, reflecting India’s commitment to improving export compliance standards.
Speaking on the development, trade experts have lauded the move as a progressive step that will boost India’s trade reputation globally.
Exporters dealing with SCOMET items are advised to thoroughly review the DGFT guidelines and align their practices with the prescribed standards. Additionally, regular training and audits are advisable to avoid inadvertent violations in the future.
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The Inter-Ministerial Working Group (IMWG) within the Directorate General of Foreign Trade (DGFT), tasked with reviewing export applications for SCOMET items, may take voluntary disclosures into account as a mitigating factor when determining administrative penalties, if applicable.
Each case will be evaluated on its individual merits in line with the Export and Import Policy outlined by the Central Government, as per the Foreign Trade (Development and Regulation) Act and related orders.
However, voluntary disclosure provisions do not apply to non-compliance or violations involving items under SCOMET Category 0 or the Chemical Weapons Convention (CWC) Schedules (SCOMET Categories 1A, 1B, and 1C).
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All voluntary disclosure submissions, complete with supporting documentation, will be forwarded by the DGFT to the IMWG for consideration during its subsequent meetings. The IMWG will assess each case based on its specific circumstances while adhering to the Export and Import Policy and the relevant legal and regulatory framework established by the Central Government.
The DGFT has urged stakeholders to seize the opportunity responsibly and contribute to strengthening India’s export control framework.
The SOP is available below.
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