For a controls regime

German troops specialising in nuclear, biological and chemical warfare detection and decontamination take part in an exercise. A file picture. - CHRIS HELGREN/REUTERS

While effective Indian export controls on dual-use goods are high on the agenda of India-U.S. talks, the U.N. Security Council resolution has lent added urgency to the issue.

A KEY demand of the United States in the ongoing India-U.S. dialogue on cooperation in the high technology sector is the establishment in India of a system of controls on the export of high-tech goods, particularly dual-use items, that conforms to the standards set by U.S. export control laws. Under the initiative of U.S. President George W. Bush in January 2004, labelled Next Steps in Strategic Partnership (NSSP), it has been made clear by visiting U.S. officials that any substantive movement forward in the export of U.S. dual-use goods to India is predicated upon an effective system of controls being put in place.

India does have a comprehensive framework of export controls on strategic goods as part of its Export-Import Policy. First enacted in April 1995, it was revised in April 2000. The U.S. view is that this is not effective. The export, in violation of the established controls, of substances prohibited under the Chemical Weapons Convention (CWC) by some Indian enterprises to certain West Asian countries was cited as proof of the inadequacy of the existing system.

The U.S. attempt at reforming export controls worldwide stems from its concern about the proliferation of weapons of mass destruction (WMD) since the discovery of Iraq's covert nuclear weapons programme. The U.S.' counter-terrorism efforts on a global scale, in the wake of the terrorist attacks of September 11, 2001, has lent an added urgency to it. The focus now includes non-state actors such as terrorist groups and entities involved in the supply and/or brokering of transfers of such goods in various parts of the world. The existing multilateral non-proliferation regimes (such as the nuclear Non-Proliferation Treaty and the CWC) focus only on nation-states and are perceived by the U.S. as inadequate to deal with non-state actors.

Brokering and other intangibles related to transfer of strategic goods and technology acquired a new emphasis in the U.S.' perspective after the discovery in 2003 of the nuclear network of private enterprises across countries established by the Pakistani nuclear scientist A.Q. Khan. The U.S. would like to see effective measures in the control and monitoring of these. The bilateral initiative on high-tech cooperation has provided it an appropriate forum for leveraging its desired objective of ensuring an effective Indian export control system covering these aspects as well.

Indeed, the clout of the U.S. in international politics is such that it influenced the United Nations Security Council to take the unprecedented step of directing all countries to enact and enforce appropriate export control laws and regulations. On April 28, 2004, the 15-member Security Council unanimously adopted Resolution 1540 under Chapter VII of the U.N. Charter (Action With Respect to Threats to Peace, Breaches of the Peace and Acts of Aggression) calling upon all states to enact laws to prevent proliferation of WMD and the means of their delivery, particularly to non-state actors. It also called for establishing appropriate controls over related materials.

The Resolution defines "related materials" as "materials, equipment and technology covered by relevant multilateral treaties (such as the NPT and the CWC) and arrangements (such as the Missile Technology Control Regime and the Nuclear Suppliers Group), or included on national control lists, which could be used for the design, development, production or use of nuclear, chemical and biological weapons and their means of delivery".

The Security Council also decided to establish a committee (comprising all its members) for a two-year period that will report on the implementation of Resolution 1540. It called upon all countries to present a first report to the committee on the steps initiated by each towards implementation of the resolution within six months of its adoption, that is, October 28, 2004.

President Bush's speech on September 23, 2003, at the U.N. General Assembly seemed to have prompted the Security Council to adopt the resolution. In his speech Bush called upon the Security Council to adopt a new anti-proliferation resolution that would "call on all U.N. members to criminalise the proliferation of WMD, to enact strict export controls consistent with international standards, and to secure any and all sensitive materials within their own borders". Significantly, the resolution also requires states to put in place effective border controls and law enforcement "to detect, deter, prevent and combat... the illicit trafficking and brokering in such items".

In a development that went largely unnoticed in the Indian media, on September 14, the Pakistan National Assembly approved a Bill "to provide export control on goods, technologies, materials and equipment related to nuclear and biological weapons and their delivery systems". Pakistan's prompt action in this regard is an effort to demonstrate to the world, the U.S. in particular, that it is equally concerned about the proliferation of WMD and it has initiated measures to ensure that instances of nuclear blackmarketing a la A.Q. Khan do not recur. "By adopting this Bill," the text states, "Pakistan would fulfil its international obligation (under Resolution 1540) and strengthen its credentials as a responsible nuclear weapons state." For Pakistan such a move was particularly important given the international suspicion of its complicity in the activities of A.Q. Khan.

The Pakistani legislation, however, does not cover chemical weapons and their delivery systems. The Bill says that Pakistan already has in place regulations for chemical weapons as required under the CWC. But the controls required by the CWC are only on trade in specified chemicals and not on their delivery systems, and thus the issue of chemical weapon delivery systems - which could include such simple systems as bombs, submunitions, projectiles and spray tanks - have been left unaddressed in the new law.

While the Bill defines "technology" for the purpose of the legislation, a caveat whose meaning and implications are not entirely clear has been included. "Any document or information that is in the public domain or is related to basic scientific research and other peaceful applications of such technology, including that related to its applications for protective purposes" would be exempt from the technology-related controls of the new Pakistan legislation (emphasis added).

THE Pakistani initiative does not, however, imply that India has been lagging behind in this international obligation. Given the country's increasing capabilities in strategic areas of technology that made India a user and producer of dual-use goods, materials and technologies, it had established a comprehensive regime of controls a decade ago. The first controls over such materials were, in fact, instituted as early as1947 with regard to control of export of monazite and thorium nitrate. Under the present U.S. urging and Resolution 1540 new dimensions of brokering and intangibles in high-tech trade have become important.

The legal basis for exercising export controls is provided by the following Indian laws: the Explosive Substances Act (1908), the Narcotic Drugs and Psychotropic Substances Act (1986), the Environment Protection Act (1986), the Atomic Energy Act (1962), the Customs Act (1962), the Arms Act (1959) and the Arms Rules (1962), and the Foreign Trade Development and Regulation (FTDR) Act (which last came into force in 1992). The last Act covers items not regulated by any other act.

The development of a formal system and an institutionalised framework was initiated in 1993 when the government constituted the Small Group on Strategic Export Controls (SGSEC). The group finalised a list of items called `Special Materials, Equipment and Technology (SMET)', whose export was subject to licensing. This was made part of the Exim Policy of 1995. Separately, but effective from the same date of April 1, 1995, the Department of Atomic Energy (DAE) issued gazette notifications under the Atomic Energy Act listing the prescribed equipment and substances that are subject to its export licensing.

Following India's endorsement of the CWC in January 1993, the Director General of Foreign Trade (DGFT) specified a list of dual-use chemicals, corresponding to the chemicals contained in the three schedules annexed to the CWC, the export of which is either prohibited or permitted only under licence. This was done through a Public Notice, effective March 31, 1993.

With the growing importance of biotechnology, the export of micro-organisms also began to be controlled under the Environment Protection Act. The gazette notification of 1989 details the rules for the manufacture, use, import, export and storage of hazardous micro-organisms and genetically engineered organisms or cells.

This regime was further strengthened when a second SGSEC was constituted in 1999 to review the implementation of the existing system and make recommendations to enhance its effectiveness. Following this, the DGFT, through a notification effective April 1, 2000, specified a list of Special Chemicals, Organisms, Materials, Equipment and Technology (SCOMET), the export of which is either prohibited or permitted only under licence. The current SCOMET list contains all dual-use items and technologies in eight categories. The grant of export licence for these depends on end-use and end-user certification.

According to sources connected with the SGSEC, the technology component in SCOMET has not been defined comprehensively enough to include intangibles. It is this exercise that is currently engaging the group. The issue of brokering too has to be appropriately incorporated into the regulations. The FTDR Act will also have to be accordingly amended to include these.

While these aspects were being discussed under the Indo-U.S. High Technology Cooperation Group (HTCG) and the NSSP - the issue of brokering being somewhat contentious - with the adoption of Resolution 1540 by the Security Council, it is now beyond the realm of the bilateral. It is now binding on all countries to adopt and enforce laws that include these aspects.

THOUGH there is an apparent general consensus on the Resolution, its introduction was not without criticism. Many members, including India and Pakistan, questioned the basis of the Security Council directing all countries, including non-members of the Security Council, to adopt specific legislation.

In the Security Council's open debate on WMD on April 22, which preceded the adoption of the Resolution and formed the basis for it, India's representative Vijay K. Nambiar voiced concern over the Security Council's increasing tendency in recent years to assume new and wider powers of legislation on behalf of the international community. He pointed out that the Security Council was seeking both to define a non-proliferation regime and monitor its implementation.

"Export controls were not an issue on which the Council should prescribe norms. The flip side of export controls was indiscriminate technology denials to states with legitimate needs," he said. He added that its exercise of legislative functions, combined with recourse to Chapter VII mandates, could disrupt the balance of power between the Security Council and the General Assembly. Further, the exclusive focus on non-proliferation did a disservice to the principle of the mutually reinforcing link between disarmament and non-proliferation.

The representative of Pakistan - which is a member of the Security Council until December 2005 - questioned the Council's right to prescribe legislative action for all member-states. South Africa's representative said that any far-reaching assumption of authority by the Security Council to enact global legislation requiring each member state to modify its legal system and modify its policies would be unjust and unsustainable. He also voiced concern about the fact that the draft resolution made only a passing reference to disarmament, despite the unequivocal undertaking given by the nuclear weapon states to eliminate their arsenals.

This passing reference is contained in the opening words of the Resolution, which states: "Reaffirming, in this context, the Statement of its President adopted at the Council's meeting at the level of Heads of State and Government on 31 January 1992, including the need for all Member States to fulfil their obligations in relation to arms control and disarmament and to prevent proliferation in all its aspects of all weapons of mass destruction... "

While the Resolution, in the main, has to do with horizontal proliferation, the text implies an obligation on nuclear weapon states to end vertical proliferation as well. Its inclusion in a presidential statement of the Security Council lends added weight to it. So if the U.S. points to the Resolution for putting in place effective export controls, the above statement could be held out to the U.S. and told that non-proliferation cannot be achieved without disarmament.