Sanjeev Sachdeva
Sanjeev Sachdeva is a Partner in Luthra
& Luthra Law Offices New Delhi,
India. He primarily deals with Indirect
Taxes (Customs, Central Excise, VAT
and Service Tax) and Foreign Trade
Laws. He has over 32 years of relevant
experience in the field of indirect taxes
and foreign trade. He has advised clients
in diverse sectors, including infra-
structure, oil & gas, energy and retail.
3.
What are the import regulations in
India for U.S. vendors?
The Indian entity or an intermediary
importing nuclear equipment or material
into India from the United States will
usually be responsible for obtaining
requisite import licenses. However, U.S.
vendors should be aware of Indian import
licensing requirements and customs
duties as they enter into contracts with
Indian entities for the sale and purchase
of nuclear equipment and material.
In India, the Ministry of Commerce
are charged with the responsibility for
all matters relating to foreign trade, and
import and export trade policy and control.
The Ministry of Commerce’s Directorate
General of Foreign Trade (“DGFT”) is
responsible for implementing foreign
trade policy and for issuing import and
export licenses and authorizations.
The Foreign Trade (Development
and Regulation) Act, 1992 (“FTDR Act”)
is India’s principal foreign trade law and
provides for development and regulation
of foreign trade. The Government of India
has notified the Foreign Trade Policy, 2009-
2014 (“FTP”) under section 5 of the FTDR
Act. The itemwise export and import policy
is specified in the ITC (HS) Classifications
of Export and Import Items Book (“ITC
(HS)”). There are no general prohibitions
or restrictions with respect to imports into
India from the United States. However,
import of nuclear reactors, equipment and
material is subject to the following import
licensing requirements:
•
Nuclear reactors and their parts
can be imported into India only
under a license issued by DGFT and
is subject to a 25.85% customs duty.
However, the import of reactors and
reactor components for the following
projects are fully exempt from
payment of customs duties: Tarapur,
Kudankulam, Kaiga, Rajasthan,
the Prototype Fast Breeder Reactor
(Kalpakkam) and Kakrapar.
•
Nuclear Fuel
. The import into India
of radioactive material, including
natural and enriched uranium,
thorium and spent irradiated fuel
elements, is subject to a Department
of Atomic Energy licensing
requirement. The effective rate of
customs duty generally leviable on
the import of nuclear fuel ranges
between 12 to 17%. In addition,
the import of non-irradiated nuclear
fuel elements (cartridges) is subject
to obtaining a DGFT license and
carries a 12.03% customs duty.
4.
Have India and the United States
come to an agreement on the liability
issue?
India’s Civil Liability for Nuclear
Damage Act, 2010 (“CLND Act”)
provides a framework for civil liability
for nuclear damage arising from nuclear
incidents at nuclear installations.
Under the CLND Act, the operator
of a nuclear installation is liable to
compensate victims of nuclear damage
up to Indian Rupees (“INR”) 1500 crores
(approximately USD 280 million) and
liability in excess thereof and up to 300
million Special Drawing Rights (SDRs
the reserve assets of the International
Monetary Fund on which member
nations may draw in proportion to their
contribution to the Fund) (approximately
USD 455 million) would be absorbed by
the Central Government.
While the primary thrust of the
CLND Act is towards ensuring an
efficacious compensation regime for
third party victims by channeling liability
to the operator, Section 17 of the CLND
Act provides for an operator’s right of
recourse against the supplier. Under
Section 17, the operator, after paying
compensation for nuclear damage, has
a right of recourse where (a) such right
is expressly provided for in a contract
in writing; (b) the nuclear incident has
resulted as a consequence of an act of
supplier or its employee, including supply
of equipment or material with patent or
latent defects or sub-standard services;
(c) the nuclear incident has resulted from
an act or omission of an individual done
with intent to cause nuclear damage.
Section 17 may be of particular
concern to suppliers of components,
services etc. of relatively lower values
(e.g. a supplier of a component worth
say INR 100 crores may face a potential
risk of being sued for up to INR 1500
crores). Such a risk could be partially
mitigated by the Civil Liability for
Nuclear Damage Rules, 2011 (“CLND
Rules”), a subordinate legislation
framed under the CLND Act. Under
Rule 24(1) of the CLND Rules, where
the operator has an express contractual
right of recourse against the supplier
(as envisaged under Section 17(a) of the
CLND Act), such right of recourse shall
be fixed for an amount not less than the
extent of the operator’s liability (i.e. INR
1500 crores) or the total contract value,
whichever is less. However, Rule 24 has
been challenged in the Supreme Court
of India; one ground of challenge being
that it is not in line with the CLND Act.
Incidentally, the CLND Act itself is also
under challenge in the Supreme Court
and the matter is currently pending.
Recent media reports indicated that the
Attorney General of India issued an
opinion to the effect that the operator (in
this case, the Nuclear Power Corporation
of India (NPCIL)) would be authorized to
(Continued on page 49)
Sanjay Mullick
Sanjay Mullick, Counsel with
Pillsbury Winthrop Shaw Pittman
LLP concentrates his practice in
export controls, economic sanctions,
international regulatory compliance and
international dispute resolution.
Mr. Mullick has a broad range of
experience providing counsel to
companies on export control matters
administered by the Department
of Commerce under the Export
Administration Regulations (EAR),
the Department of State under
the International Traffic in Arms
Regulations (ITAR) and the Department
of Energy under Part 810. He assists
companies in preparing export license
applications and classification requests
for hi-tech and nuclear trade, as well as
in conducting voluntary self-disclosure
internal investigations and designing
and implementing export control
compliance programs.
He is a member of the Firm's India
practice.
Nuclear Plant Journal, September-October 2013 NuclearPlantJournal.com
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