US embassy cable - 05NEWDELHI3270

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 003270 
 
SIPDIS 
 
E.O. 12958: DECL: 04/30/2015 
TAGS: ETTC, KNNP, KOMC, KSTC, PGOV, IN, GOI, Export Control Initiatives 
SUBJECT: NEW INDIAN EXPORT CONTROL LAW IN THE MAKING 
 
 
Classified By: Charge Robert O. Blake, Jr., for Reasons 1.4 (B, D) 
 
1.  (SBU) Summary:  A front page article in the April 26 
"Indian Express" reported details of an ambitious draft 
export control bill giving the GOI far-reaching authority to 
investigate and enforce stricter controls on WMD-related 
items and technologies.  Entitled "The Weapons of Mass 
Destruction and their Delivery Systems (Prevention of 
Unlawful Activities) Bill, 2005," the draft legislation 
proposes to regulate all manner of trade and transfer of 
sensitive dual-use goods and technology which is lacking in 
the current Foreign Trade and Development Regulation Act. 
Fundamental questions arise regarding who will implement the 
legislation and whether adequate resources will be allocated 
for enforcement.  GOI contacts have offered to brief the USG 
on the contents of the proposed law, but have not committed 
to provide us with a copy before it goes to Parliament. 
 
2.  (C) Indicating broad GOI support, MEA Joint Secretary 
(Americas) S. Jaishankar was optimistic that Parliament would 
pass the law quickly, but previewed the possibility that the 
current fractious atmosphere among MPs may delay 
consideration until the next session (August-September). 
Former BJP FM Sinha and members of the Indo-US Parliamentary 
Forum told Charge the law should not encounter significant 
opposition.  If the article is generally accurate and the 
text is not diluted during the comment process, its passage 
will be a major milestone toward greater cooperation on all 
aspects of our strategic relationship.  End Summary. 
 
Outline of Pending Export Control Legislation 
--------------------------------------------- 
 
3.  (U) Authored by Shishir Gupta, a journalist with very 
good access within the MEA, the article outlines the 
jurisdiction, application, and enforcement of the proposed 
legislation.  The bill seeks to limit any transfer of WMDs or 
their delivery systems by trade, transfer, re-transfer, 
transit, and trans-shipment of materials, equipment or 
technology to any state or non-state entities.  The law would 
apply to any mode of transport in India, its Exclusive 
Economic Zone (360 km from its coast), or registered in India 
but located elsewhere.  Indian citizens anywhere in the 
world, foreigners in India, and "persons in Indian service, 
within and beyond the country" as well as "all associates, 
branches or subsidiaries outside India of companies 
registered in India" would be subject to the law.  Finally, 
Gupta lists penalties for violations ranging from a minimum 
fine of five lakh rupees (approx. $11,000) to life 
imprisonment.  (Full text of article in para 12.) 
 
4.  (U) Preceding this report, the Indian Business Standard 
on April 19 briefly outlined some procedural aspects of the 
pending law.  According to that article, introduction of the 
new bill has been delayed so that Commerce and Industry 
Minister Nath can discuss its provisions with the recently 
constituted Board of Trade.  The article also states that a 
decision would soon be made on which ministry -- either MEA 
or the Ministry of Home Affairs -- would "pilot" the 
legislation. 
 
GOI Seeking Comments? 
--------------------- 
 
5.  (SBU) The article states that comments are currently 
being sought from relevant GOI agencies, including DRDO, 
before the draft bill goes to Parliament.  Embassy's contacts 
at DRDO, ISRO, and the Ministry of Commerce, however, told us 
that they had not yet seen a copy of the proposed law. 
 
6.  (SBU) In view of keen USG interest in the legislation, 
Jaishankar told Charge in an April 27 meeting that he would 
suggest to MEA Additional Secretary for International 
Security, Meera Shankar, that she brief Mission on bill, but 
did not guarantee that we would see a copy before it goes to 
Parliament.  (Note:  Although the GOI has sought public 
comment on a few recent pieces of pending legislation that 
have broad economic impact, such as the Food Safety and 
Standards Bill and  the Patent Amendment Bill, it still 
maintains a close hold on most pending legislation until 
passed by the Lok Sabha.  End Note.) 
 
Initial Questions 
----------------- 
 
7.  (SBU) Our reading of the article raises several initial 
questions, which we will pose if/when we receive the briefing 
we have requested: 
 
-- The article states, "The government may set up a 
regulatory authority to implement rules and regulations under 
this Act."  Would 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) be 
given new authority? 
 
-- Will the proposed law include "catch-all" provisions and 
end-use monitoring?  (Note: UK PolOff recounted to PolMilOff 
recent discussions by a Missile Technology Control Regime 
(MTCR) delegation with MEA Additional Secretary 
(International Security) Meera Shankar.  Shankar asserted 
that India's current export control law is sufficient to 
regulate most sensitive dual-use items.  When pressed by the 
MTCR delegation, however, she acknowledged that the GOI may 
not consistently scrutinize the end-use of a controlled item, 
according to UK PolOff.  Embassy is unaware of any case where 
the GOI has denied a dual-use license application, nor of any 
GOI end-use checks.  End Note.) 
 
-- Would the law include product lists?  (Note:  Currently 
there is confusion among officials as to what items are 
considered "dual-use" and should require controls.  End Note.) 
 
-- Would India begin end-use verifications checks?  Would 
pre-license checks of end-users also be required?  (Note: 
The current law allows for end-use checks, but to Embassy 
knowledge, these checks are not carried out.  Currently, 
Indian end-use "verification" merely requires that both the 
supplier and user submit a certificate to the Director 
General for Foreign Trade stating that the item has been 
transferred and received.  End Note.) 
 
-- Will adequate resources be allocated for effective 
implementation and enforcement? 
 
Broad Support 
------------- 
 
8.  (SBU) MEA contacts were hopeful that the legislation 
would be introduced in the current session of Parliament, but 
MEA Director Venu Rajamony noted in an April 26 meeting with 
PolCouns that this bill may not get through Parliament's 
agenda in the current session because of ongoing battles 
about domestic issues.  The April 19 "Business Standard" 
article cited unnamed officials who speculated that the bill 
would not be tabled in the current budget session of 
Parliament.  Despite discord among legislators on other 
issues, Jaishankar was optimistic that the legislation would 
pass quickly when it is introduced.  "Even the Left has 
figured out that it is to India's advantage to have a good 
reputation on export controls," Jaishankar told Charge on 
April 27. 
 
9.  (C) So far, we have seen no evidence of Parliamentary 
resistance to this new legislation.  Rather, the main 
objections that MEA is facing appear to come from within 
elements of the Indian scientific establishment that are 
skeptical of US motives.  In an April 26 meeting with the 
Charge, BJP spokesman and former Foreign Minister Yashwant 
Sinha emphasized that the BJP had no major differences with 
the Congress on foreign policy, especially as regards 
relations with the US.  Indeed, he argued that the main 
constraint on Congress foreign policy options was its 
reliance on the Left parties, many of which remain stuck "in 
a Cold War mindset."  He cited an ongoing debate over pension 
reform to argue that the Congress is unwilling to advance 
legislation with BJP support if that means parting ways with 
the Left.  Referring to the NSSP, Sinha said he was happy 
that US-India initiatives launched by the BJP are now bearing 
fruit, and welcomed the Administration's intention to develop 
a broader framework for cooperation, as outlined in the 
Department's March 25 South Asia Initiative.  Pressed by 
PolCouns regarding the importance of speedy passage of an 
export control bill, Sinha stated that "we'll be supportive, 
there should be no issue with the BJP."  Regarding the US, 
Sinha said the BJP's concerns for now focus on the Pakistan 
F-16's package, to include questions about how many aircraft 
and what configuration would be offered. 
 
IUPF Support 
------------ 
 
10.  (SBU) We received similar signals of support during an 
April 27 Charge-led briefing for members of the Indo-US 
Parliamentary Forum.  The Charge walked through the March 25 
initiatives and the results  of Natwar Singh's follow-on 
meeting with the Secretary, emphasizing the Administration's 
intention to take our bilateral relationship to an entirely 
new level.  The Charge and other Country Team members placed 
considerable importance on the export control bill, noting 
that progress on such legislation would allow the US to move 
forward more quickly on issues of importance to India such as 
defense technology transfer, civil nuclear cooperation, and 
satellite collaboration.  MPs from several different parties, 
including Congress, the Congress-allied NCP, the BJP and the 
NDA-affiliated Biju Janata Dal welcomed the prospect of 
deeper US-India partnership in these areas and indicated that 
necessary export control legislation should move ahead 
quickly.  Among this self-selecting, pro-US group (several of 
whom were educated in America) there was none of the 
defensiveness about India's existing export control regime 
that we occasionally see among GOI officials. 
 
Comment 
------- 
 
11.  (C) Comment:  If the article is generally accurate and 
the text is not diluted during the comment process, its 
passage will be a major milestone toward greater cooperation 
on all aspects of our strategic relationship.  End Comment. 
 
Text of Article 
--------------- 
 
12.  (U) Begin text of April 26 "Indian Express" article: 
 
Government Ready with Law against Smuggling WMDs, N-Material, 
by Shishir Gupta 
 
Bill:  Strict checks, life penalty for offenders as India 
assures world of commitment to non-proliferation 
 
Seven years after India conducted the Shakti series of 
nuclear tests at Pokhran, the UPA government is bringing in 
legislation that steel-clads the non-proliferation framework 
and imposes punishment, up to life imprisonment, on those 
found involved in proliferating weapons of mass destruction 
and missile delivery systems to terrorists, non-state players 
and other countries. 
 
Authoritative sources indicated that the legislation called 
'The Weapons of Mass Destruction and Their Delivery Systems 
(Prevention of Unlawful Activities) Bill, 2005' has been 
drafted and comments are being sought from the DRDO and other 
agencies to make it foolproof. 
 
Though Parliament goes into summer recess from May 13 * it 
was on this day in 1998 when India conducted the last two of 
the five detonations at Pokhran * efforts are being made to 
get the legislation introduced and cleared this session 
itself. 
 
The legislation has acquired urgency as private players will 
soon come into the civilian nuclear energy sector and there's 
greater emphasis on private involvement in the defense 
sector. 
 
This export control legislation will also help India convince 
the international community that its non-proliferation record 
is impeccable and provide impetus to countries such as US and 
Russia towards sharing of nuclear technology with New Delhi. 
 
The bill provides for cast-iron commitments by India, as a 
nuclear weapons or other nuclear explosive devices and not to 
assist or encourage any other state to manufacture or acquire 
WMDs (sic). 
 
With the broader objective of global disarmament, the bill 
says that India is committed to prevent terrorists and 
non-state players from acquiring nuclear devices, chemical or 
biological weapons and their delivery systems. 
 
If cleared, this legislation will be in addition to the 
existing non-proliferation rules already in force. This law 
will apply to the entire country, including its Exclusive 
Economic Zone which is 360 km (200 nautical miles) from the 
coast, and to all Indian citizens wherever they are residing. 
 
The bill will apply to any ship, aircraft or any other medium 
of transport registered in India, wherever they may be. Its 
jurisdiction will extend to all foreign persons residing in 
India and persons in Indian service, within and beyond the 
country. 
 
All associates, branches or subsidiaries outside India of 
companies registered in India will also come under its ambit. 
 
The draft apparently states that the Act will apply to trade, 
transfers, re-transfers, transit and trans-shipment of 
materials, equipment or technology (including software) of 
any description as identified by the government. 
 
The bill defines in details WMDs, biological weapons, 
chemical weapons, munitions and devices, radioactive 
material, fissile material and delivery systems and indicates 
that the government may set-up a regulatory authority to 
implement rules and regulations under this Act. 
 
It gives full powers to the Central government and protects 
the law enforcers of this Act from any counter-litigation, 
prosecution or any other legal proceedings. The draft 
prohibits any person other than government to deal with WMDs, 
bans any transfer of nuclear technology or radioactive 
material to terrorists. And imposes a ban on export of 
materials, equipment or technology relating to manufacture of 
biological, chemical or nuclear weapon. 
 
The stringent law imposes heavy penalties on violators as 
deterrence. Any person found dealing with WMDs or radioactive 
material will be sentenced to a minimum of five years in jail 
to a maximum of life imprisonment. 
 
Any person who is found with an intent to aid any terrorist 
or possesses a nuclear device can be punished for a minimum 
of five years to a maximum of life imprisonment with a hefty 
fine. 
 
The proposed law also bars Indians from exhibiting, selling 
or supplying WMDs to any foreign national, who is a resident, 
operating, visiting or studying or conducing research within 
the territorial limits of the country including the EEZ and 
the airspace. 
 
Any contravention of this rule will invite a minimum penalty 
of five lakh rupees. The second or every subsequent offence 
will be punishable with an imprisonment not less than six 
months but can be extended to five years.  End text. 
BLAKE