Identifier
Created
Classification
Origin
05NEWDELHI3603
2005-05-12 12:27:00
CONFIDENTIAL
Embassy New Delhi
Cable title:  

ASSESSING OF INDIA'S DRAFT EXPORT CONTROL

Tags:  PREL ETTC MNUC IN GOI 
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C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 003603 

SIPDIS

PASS TO NRC

E.O. 12958: DECL: 05/13/2015
TAGS: PREL ETTC MNUC IN GOI
SUBJECT: ASSESSING OF INDIA'S DRAFT EXPORT CONTROL
LEGISLATION

REF: A. NEW DELHI 3529

B. NEW DELHI 3392

C. NEW DELHI 3270

Classified By: Charge Robert O. Blake, Jr., for Reasons 1.4 (B, D)

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 003603

SIPDIS

PASS TO NRC

E.O. 12958: DECL: 05/13/2015
TAGS: PREL ETTC MNUC IN GOI
SUBJECT: ASSESSING OF INDIA'S DRAFT EXPORT CONTROL
LEGISLATION

REF: A. NEW DELHI 3529

B. NEW DELHI 3392

C. NEW DELHI 3270

Classified By: Charge Robert O. Blake, Jr., for Reasons 1.4 (B, D)


1. (SBU) Summary: Our initial review of the "Weapons of
Mass Destruction and their Delivery Systems (Prohibition of
Unlawful Activities) Bill, 2005" (Bill No. 70),suggests the
draft legislation is a comprehensive statute that meets NSSP
Phase Two requirements that the GOI introduce stronger export
control legislation. Although we have to see how the
legislation is implemented, the bill is ambitious and the
speed with which it has sailed through the government is a
major achievement for the GOI and a clear indicator of its
commitment to nonproliferation and the US-India relationship.
The legislation was introduced in Parliament on May 10, and
debate began on May 12. The government is pushing hard for
passage before Parliament adjourns on May 13. A copy of the
document has been transmitted to SA/INS. End Summary.


2. (SBU) Following its rapid approval by the GOI Cabinet
(Ref B),Embassy received an advance copy of the WMD bill on
May 10. An initial review of the text indicates that earlier
reporting on the contents of the bill was fairly accurate
(Ref C),and that the law is ambitious in its scope and
contains stringent penalties for violation of its provisions.
(Note: One difference in the draft bill from previous
reporting is a reduction in the minimum fine for a violation
from five lakh rupees (approx. $11,000) to three lakh rupees
(approx. $7000). End Note.)


3. (SBU) The scope and application of the bill is extensive,
indicating that the GOI is determined to enshrine its
self-described "pristine" nonproliferation record in law.
The law also seems to seek to establish India as a
self-declared "Nuclear Weapons State," abiding by its
international commitments, i.e., UNSCR 1540, and the Chemical
Weapons and Biological Weapons Conventions.


4. (C) The bill appears to meet the requirements outlined in
Phase Two of the NSSP, namely, to introduce export control
legislation that covers intangible technology transfers,

brokering, transit, re-export, and catch-all controls. A
copy of the text of the bill has been transmitted to SA/INS.
Its major elements are described below:

Objectives: NWS and Nonproliferation
--------------


5. (U) Notably, the GOI declares itself a "Nuclear Weapons
State" in the opening sentence of the Preamble and reiterates
its commitment to nonproliferation: "Whereas India is
determined to safeguard its national security as a Nuclear
Weapons State; and whereas India is committed not to transfer
nuclear weapons or other nuclear explosive devices, or to
transfer control over such weapons or explosive devices, and
not in any way to assist, encourage, or induce any other
country to manufacture nuclear weapons or other nuclear
explosive devices..."

Extent and Application of Law
--------------


6. (U) The bill claims broad jurisdiction over the area and
entities subject to the law. Clause 3 states the law applies
to every person in India and its Exclusive Economic Zone (360
km from its coast),as well as to "citizens of India outside
India; companies or bodies corporate, registered or
incorporated in Indian or having their associates, branches
or subsidiaries, outside India; any ship, aircraft or other
means of transport registered in India or outside India,
wherever it may be; foreigners while in India; and persons in
the service of the Government of India, within and beyond
India."


7. (U) Clause 3 goes on to define the application of the law
to "export, transfer, re-transfer, transit and transshipment
of material, equipment or technology of any description as
are identified, designated, categorized or considered
necessary by the Central Government, as pertinent or relevant
to India as a Nuclear Weapon State, or to the national
security of India, or to the furtherance of its foreign
policy or its international obligations under any bilateral,
multilateral or international treaty, Covenant, Convention or
arrangement relating to weapons of mass destruction or their
means of delivery, to which India is a Party."

Intangible Technology Transfers
--------------


8. (U) The bill consistently references limits on any
material, equipment, or technology that may be used in the
design or manufacture of WMD. The concept of "intangible
technology transfer" is encompassed by the definition of
"technology" in Clause 4 which includes "all items and
services which are provided or used, or which are capable of
being used, in the development, production or use of such
(WMD) technology or goods."

Brokering
--------------


9. (U) Brokering is specifically cited in Clause 12: "No
person who is a resident in India shall, for consideration
under the terms of an actual or implied contract, knowingly
facilitate the execution of any transaction which is
prohibited or regulated under this Act."

Transit and Re-export
--------------


10. (U) Various forms of transit and transfer are defined in
Clause 4, as follows:

-- "'Brought in transit' means to bring goods from any
country into India by land, air or amphibious means of
transportation, where the goods are to be taken out from
India on the same conveyance on which they are brought into
India without any landing in India."

-- "'Retransfer' means transfer of any item notified under
this Act from any country or entity to which it has been
exported from India, to yet another country or entity."

-- "'Transship' means to remove goods from the conveyance on
which they were brought into India and to place the goods on
the same or another conveyance for the purpose of taking them
out of India, where these acts are carried out on a "through
bill of lading,' 'through airway bill,' or 'through
manifest.'"


11. (U) Clause 13 of the bill regulates transit and transfer
activities:

-- "(A) No item notified under this Act shall be exported,
transferred, re-transferred, brought in transit, or
transshipped except in accordance with the provision of this
Act or any other relevant Act;

-- (B) Any transfer of technology of an item, whose export is
prohibited under this Act or any other relevant Act related
to relevant activities shall be prohibited;

-- (C) When any technology is notified under this Act or any
other relevant Act, as being subject to transfer controls,
the transfer of such technology shall be restricted to the
extent notified thereunder;

-- (D) The Central Government may notify any item as being
subject to the provisions of this Act, whether or not it is
covered under any other relevant Act, and when such item is
exhibited, sold, supplied or transferred to any foreign
entity or a foreigner who is resident, operating, visiting
studying, or conducting research or business within the
territorial limits of India, or in its airspace or Exclusive
Economic Zone, it shall constitute an offense."

Capturing the "Catch-All" Concept
--------------


12. (U) Although the term "catch-all" is not specifically
used in the text, the concept is captured in several
references to GOI authority to designate items of concern,
such as in Clause 11: "No person shall export any material,
equipment, or technology knowing that such material,
equipment, or technology is intended to be used in the design
or manufacture of a biological weapon, chemical weapon,
nuclear weapon or other nuclear explosive device, or in their
missile delivery systems." The law also seeks to grapple
explicitly with the cutting edge problem of proliferation
involving non-state actors in Clause 9: "No person shall,
directly or indirectly, transfer to a non-State actor or
terrorist, any material, equipment and technology notified
under this Act or any other Act related to relevant
activity." The bill goes on to specify punishment for any
person caught aiding and abetting non-State actors, ranging
from a jail term of five years to life imprisonment.

Delegation of Powers
--------------


13. (U) Clause 7 states, "The Central Government shall have
the power to direct or assign to any authority, in such
manner as it may deem appropriate, such powers as may be
necessary to implement the provisions of this Act."

Pending Questions
--------------


14. (SBU) Our initial reading of the bill raises several
questions about the law and its implementation:

-- Per Clause 7, will the GOI create a new entity to
implement this law or would a current body (e.g., the
Inter-Ministerial Working Group that currently reviews export
licenses or the Director General of Foreign Trade) be given
new authority to implement the bill's provisions?

-- Will adequate resources be allocated for effective
implementation and enforcement?

-- Will the GOI issue a list of controlled items under this
law, and if so, will that list be harmonized with existing
international lists?

-- Will the GOI begin to systematically monitor its ports to
ensure compliance, i.e., without outside notification or
intervention?


15. (SBU) Dr. G. Balachandran, an independent consultant who
has done extensive research on Indian, US, and international
export control regimes, assessed the draft legislation in a
discussion with PolMilOff on May 11. He noted that the broad
jurisdiction of the law closely follows similar provisions in
US export control law, e.g., applicable to all US citizens,
regardless of their location. He raised similar questions as
above about how the bill would be implemented, and especially
about the need for the GOI to revise its control lists.
According to Dr. Balachandran, the GOI is currently drafting
a new control list which should be released "soon." He did
not know whether the new list would be harmonized with
current international lists or whether it would simply be an
annex to India's existing control list, SCOMET. Dr.
Balachandran believed that there is broad support for the
draft bill and did not foresee problems with passing it, even
in the short time left of the current session of Parliament.

Race Against the Clock
--------------


16. (U) The bill was introduced in the Lok Sabha (Lower
House) late in the day on May 10 and in the Rajya Sabha
(Upper House) on May 12. Both houses may either discuss and
vote on the bill or send it to their respective Standing
Committee for hearings (where some bills languish). The Lok
Sabha debate began on May 12. If both houses pass the bill
with a two-thirds majority, it will become law. If either
house sends the bill to its respective Standing Committee,
the bill will not re-surface until the "Monsoon session" of
Parliament in July.


17. (U) If Parliament does not vote on the bill, the Prime
Minister may intervene and sign the bill into law temporarily
as an Ordinance (as happened for the Patent Act, and the
Prevention of Terrorism Act). Passing a bill by Ordinance is
only a temporary measure, however, because the law expires
six weeks after the next session of Parliament. Further,
signing a bill into law as an Ordinance would have to be done
before the bill is sent to the Standing Committee.


18. (U) The May 12 "Indian Express" reports that an
agreement was reached among Left parties and the Ministers of
External Affairs, Defense, and Parliamentary Affairs, among
others, to push the bill through both houses of Parliament
before adjournment. According to the May 10 "Indian
Express," before the bill was introduced, the UPA sought a
waiver to prevent the bill from being referred to the
standing committees to ensure a vote before Parliament
adjourns.

Opposition Recognizes Spin-off Benefits
--------------


19. (U) An editorial in the pro-BJP "Pioneer" on May 12
highlights reasons for passage of this bill (albeit, with the
participation of Opposition parties that are currently
boycotting Parliament). First, to prove -- namely, to the US
-- that New Delhi is a mature nuclear power with an
established command-and-control structure to safeguard
against black-marketing of sensitive technology. Second, to
overcome the "technical obstacles" enshrined in the Nuclear
Suppliers Group (NSG) guidelines that limit India's access to
civil nuclear technology and reactors. According to the
"Pioneer," the law would facilitate Russia's potentially
very lucrative involvement in the Kundakulam reactor project
for which India has sought four additional reactors:
"Indeed, if Moscow does not allow itself to be distracted by
Washington, it could initiate a hugely upgraded nuclear
cooperation program with New Delhi designed to meet India's
energy concerns through civilian nuclear power." Finally,
passage of the law, coupled with India's adherence to other
control regimes, would augment India's bid for permanent
Security Council membership, according to the editorial.

Comment
--------------


20. (C) Embassy believes the draft legislation meets --
perhaps even exceeds -- NSSP Phase Two requirements that the
GOI strengthen its export control law. The speed with which
it sailed through the normally cumbersome inter-agency
process indicates high-level support and, if passed by
Parliament, would demonstrate broad political consensus for
New Delhi's nonproliferation objectives. The devil, of
course, will be in the details of implementing this ambitious
legislation and, ultimately, allocating adequate resources.

21. (C) Save for a handful of articles in the Indian press,
the rapid movement of this bill seems to have eluded most
Indian media, as well as our interlocutors on various issues
affected by export controls. Emboffs' contacts at the
Ministry of Commerce and the Department of Energy (Ref A) had
not seen the proposed bill before it was introduced in
Parliament. Presumably, the process for establishing the
regulations to implement the law will involve more labored
consultations.


22. (C) In any case, this is a major step found on an issue
that has been pending in our bilateral relationship since the
1990s. As we noted in Ref B, this would not have happened
without a significant investment of political capital by the
Prime Minister and his senior advisors. In this sense, this
law is one more bellwether of the considerable importance
that NPA government has assigned to its relationship with
Washington.
BLAKE