APPENDIX 16
Exporters
should project a good image of the Country abroad to promote exports. With this objective in mind, an enduring
relationship with foreign buyers is of the utmost importance, and trade
disputes, whenever they arise, should be settled as soon as possible.
The
majority of complaints from foreign buyers are with regard to quality. Other complaints are usually for unethical
commercial dealings on the part of Indian exporters and can be categorised as
non-supply of goods after confirmation of the orders, non-payment of agreed
commission, non-adherence to the delivery schedule etc. The work relating to dealing such complaints
of foreign buyers has been centralised
with the 'Nodal Officer' and its assisting Cell viz., the Trade Disputes
Cell in the office of the Director
General of Foreign Trades, Ministry of Commerce, Udyog Bhawan, New Delhi.
A.
Enforcement action in the office of Director General of Foreign
Trade against erring exporters can be taken under the existing Rules & Regulations depending on the offence as
follows:-
Non-payment of commission, supply of sub-standard goods,
non-adherence of delivery schedules, indulgence in unethical commercial
dealings, amount to breach of contract for which action can be taken under
clause 7 of the Export (Control) Order, by which the Central Government or
Director General of Foreign Trade or an authorised officer may debar an
exporter from exporting any goods if he commits a willful breach of
contract. This applies to the cases
pertaining to a period prior to 19-6-1992.
However, cases pertaining to a period on or after, 19.6.1992 enforcement
action is taken in terms to Foreign Trade (Development & Regulation) Act,
1992 and Rules framed thereunder namely:
(i)
Section 8 empowers the Director General
of Foreign Trade to suspend or cancel the Importer/ Exporter Code Number which
is a prerequisite for any export or import, where the Director General of Foreign Trade has inter-alia reason to
believe (a) that the exporter has committed an economic offence as specified by
the Government or (b) that any person has made an export/import in a manner
gravely prejudicial to the trade
relations of India with any foreign country or to the interests of other
persons engaged in imports or exports or has brought disrepute to the credit or
the goods of the country.
(ii)
Section 9(4) empowers the Director
General of Foreign Trade or the officer authorised by him to grant licence, to
suspend or cancel any licence granted under the Act. Rule 10 of the Foreign Trade (Regulation) Rules, 1993 lays down
the conditions for such cancellation under Section 9(4) of the said Act. This includes cases where the licence has
been obtained by fraud, suppression of facts or misrepresentation and where the
licensee has contravened any law relating to Custom or Foreign Exchange or the
Rules & Regulations relating thereto.
(iii)
Section 11(2) of the Act provides for
imposition of fiscal penalty in cases where a person makes or abets or attempts
to make any import or export in contravention of any provisions of the Act, any
Rules or Orders made thereunder or the Export-Import Policy. Rule 11 of the Foreign Trade (Regulation)
Rules 1993 requires an exporter to state in the shipping bills or any other
documents prescribed under the Customs Act, 1962, the value, quality and
description of export goods to the best of his knowledge and belief and to
certify that the quality and specification of the goods are in accordance with
the terms of the export contract and has also to subscribe a declaration at the
foot of such a document that the statements made by him are true.
(iv)
Paragraph 14.6 of the
Export-Import Policy AM 1997-2002
empowers the Director General of Foreign Trade to take action against an
exporter, if it comes to his notice or he has reason to believe, has made an
export in a manner gravely prejudicial to (1) trade relations of India with any
foreign country; (2) to the interests of other persons engaged in exports or
imports and (3) has brought disrepute to the credit or the goods of the
country.
(v)
The Director General of Foreign Trade
has powers under para 13.9 of chapter 13 of the Hand Book of Procedures
A.M. 1997-2002 formulated in exercise of powers conferred under Section
5 of the Foreign Trade (Development & Regulation) Act, 1992, to direct any
Registering Authority to register or deregister an exporter or otherwise issue
such directions to them consistent with and in order to implement the provisions
of the Act, the Rules & Orders made thereunder, the Policy or the Hand
Book. Besides , the Registering Authorities viz. Export Promotion Councils,
Commodity Boards etc. may also take appropriate necessary action and view on
the application furnished by the exporters for registration if, prima-facie,
there are reasons to believe that he has indulged in any form of unfair,
corrupt or fraudulent practice.
Adequate Opportunity is to be provided to the exporter to explain his
stand before resorting to penal action by way of issuance of Show Cause Notice,
personal hearing etc., as per rules.
B.
Certain export products have been
notified for Compulsory Quality Control & Pre-shipment Inspection prior to
their export. Penal action can be taken under the Export (Quality Control &
Inspection) Act, 1963 as amended in 1984, against exporters who do not conform
to the standards and or provisions of Act as laid down for such products.
Besides
Foreign Trade (Development & Regulation) Act and Export (Quality Control
& Inspection) Act and Export ( Quality Control & Inspection) Act, there
are other laws such as Indian Coffee Act, Tea Act, Coir Industry Act, Dangerous
Drugs Act.Customs Act. etc. to ensure that only Quality products are exported.
Inspite of these provisions, there are complaints from foreign buyers. It has,
therefore, been decided by the Ministry of Commerce that in order to develop
our export on a sustained and enduring basis and at the same time improve the
image of our exports in international market, it is essential that such
complaints are checked, sorted out and resolved quickly and amicably before
taking recourse to penal action. At the same time ways and means should be
found to reduce complaints/disputes to the minimum.
Information
regarding trade complaints and disputes are being received by various
organizations/ departments, such as:
¨ Indian Missions abroad;
¨ Government of India, Ministry of Commerce;
¨ Export Promotion Councils, Chamber of Commerce & Industry
including FIEO;
¨ Commodity Boards;
¨ Indian Trade Promotion Organisation;
¨ Export Inspection Council and Export Inspection Agencies;
¨ Directorate General of Commercial Intelligence and Statistics;
¨ Reserve Bank of India and in respect of food items exported to USA,
detentions published by USFDA and sent to the Government of India.
To
initiate prompt and effective steps for redressing the grievance of overseas
complainants and to avoid unnecessary correspondence, detailed information
regarding the complaint should be furnished by the complainants in the first
instance itself. This will not only help the investigation but will also
minimise the time in examination of the complaint and in turn it's settlement.
It has, therefore, been decided that complaints as far as possible, should be
made in the prescribed proforma as per Annexure I & II, as the case may be,
duly supported by photo copies or relevant documents preferably in duplicate.
The
Export Commissioner/Joint Director General of Foreign Trade in the office of Director General of Foreign Trade, Udyog Bhavan,
Maulana Azad Road, New Delhi-110 011 has been designated as the 'Nodal Officer'
for the purpose of dealing with trade disputes and complaints. It is
imperative, therefore, that all information concerning a particular trade
dispute or complaint is received by the 'Nodal Officer' so as to arrange for
its just and amicable settlement within a specified period.
Different
Authorities including Missions are dealing with or referring the trade disputes
and complaints to different agencies in Government of India. No uniform
procedure is being followed which makes their monitoring difficult. It has now
been decided by the Ministry of Commerce that all trade disputes and complaints
including those registered with the Missions should be sent to the 'Nodal
Officer' in the office of Director General of Foreign Trade, Udyog Bhavan, New
Delhi who would take follow up action on these references. Details of such
trade disputes and complaints sent to the 'Nodal Officer' however may continue
to be incorporated in the reports being sent to the respective Territorial
Divisions in the Ministry of Commerce. In many cases, such issues are referred
to different agencies/Ministries in the Government of India without keeping the
concerned Territorial Division in the Ministry of Commerce informed of the same
and this affects the coordinating work of the Territorial Division in the
Ministry of Commerce, who are expected to function as the nodal point for all
matters relating to international trade relations with respect to their
territory.
Complaints
received by the 'Nodal Officer' in the office of Director General of Foreign
Trade, Ministry of Commerce, Udyog Bhavan, New Delhi would be initially
scrutinised and examined in the Trade Disputes Cell of this office specially
created for the purpose and to assist the 'Nodal Officer' to discharge this
function. Complaints would be broadly categorised into the following three
categories:-
(i)
Quality complaints;
(ii)
Complaints other than quality
complaints against registered exporters; and
(iii)
Complaints other than those at (I)
& (ii) above.
For
complaints involving quality as well as other commercial considerations i.e.
mixed complaints, the factor chiefly responsible for the complaint would form
the basis for determining the authority to whom the complaint is to be referred
for investigation and disposal.
I.
A."Standing Committee" under
the chairmanship of the Additional Secretary/Chief Controller of Imports and
Exports, Ministry of Commerce (Now Director General of Foreign Trade) was set
up by the Ministry of Commerce in July, 1978 to examine complaints regarding
the export of sub-standard goods and determine ways and means to eliminate
them. The Export Inspections Agency-Bombay (which is under the administrative
and technical control of Export Inspection Council of India, Ministry of
Commerce) was made central point to collect quality complaints from all sources
and forward them to the respective agencies for investigation and further
action. In May, 1981, 'Regional Committees' at Mumbai, Calcutta, Kochi, Delhi
and Chennai were setup. Five more regional Committees have also now been set up
to augment and to investigate quality complaints at Ahmedabad, Bangalore,
Kanpur, Ludhiana and Hyderabad and who will examine quality complaints
pertaining to their region and initiate prompt and effective steps to redress
the grievances of the overseas buyers. These Committees will also be
responsible to suggest steps for arresting recurrence of such complaints and to
decide effective and appropriate penal action against the erring exporters and
those found guilty and/or primarily responsible for attracting the complaints.
The 'Regional Committees' are composed of:
1.
Joint Director General of Foreign Trade
-Chairman
2.
Bureau of Indian Standard-Member
3.
Office of Agricultural Marketing
Advisor-Member
4.
Small Industries Service
Institute-Member
5.
Reserve Bank of India-Member
6.
Officer-in-charge of Export Promotion
attached to the office of Jt.DGFT-Member
7.
Export Promotion Council/Commodity
Board/Trade Association-Invitees
8.
Export Inspection
Agency-Member-Secretary.
The 'Regional Committees' will examine, consider and decide quality
complaints in accordance with the guidelines for the purpose,
II.
The 'Nodal Officer' or the Trade
Disputes Cell in the office of Director General of Foreign Trade New Delhi will
forward one copy of the complaint received to the 'Regional Committee' on
Quality Complaints for speedy investigation, settlement and report and endorse
a copy of this letter to the concerned Territorial Division in the Ministry of
Commerce.
III.
The 'Regional Committees' will
investigate and make all possible efforts to settle the dispute amicable within
three months from the date of receipt of complaint. Where required, the
'Regional Committee' may take the assistance of the Export Promotion
Councils/Commodity Boards for settlement of the trade disputes.
IV.
If the disputes are settled to the
satisfaction of foreign buyers through conciliations and/or if the 'Regional
Committee' after considering the facts of the case, decides that there is no
fault on the part of the Indian Exporter/Manufacturer and/or that the complaint
is not genuine, the case will be treated as closed. A report will be sent to
the 'Nodal Officer' or the Trade disputes Cell, office of Director General of
Foreign Trade with a copy to the Concerned Territorial Division in Ministry of
Commerce.
V.
In cases where the 'Regional Committee'
fails, to settle a dispute amicable and conciliation does not take place and
the matter does not go for arbitration etc. in terms of contract and the
'Regional Committee' find that the fault lies with the Indian Exporters or that
they are not cooperating, such cases will be transferred to the 'Nodal Officer'
or the Trade Disputes Cell with a copy to the Territorial Division in Ministry
of Commerce along with their recommendation/report for further necessary action
as per policy including in appropriate cases, legal action. Deliberate
malpractices on the part of the exporter shall be dealt with under the penal
and adjudication provisions of the Export (Quality Control & Inspection)
Act, 1963 as amended in 1984, erstwhile Import and Export (Control) Act, Export
(Control) Act, 1992 and such other laws as may be found appropriate.
VI.
The 'Nodal Officer' will consider such
cases reported by the 'Regional Committees' and after examination, initiate
appropriate penal action to de-register/debar the exporter and/or take such
action as per law as considered necessary, including, in appropriate cases,
legal action depending upon the gravity of the offence.
VII.
These Committees will submit monthly
reports to the 'Nodal Officer' who will monitor the progress of action taken
for settlement of complaints and disputes.
VIII.
As mere settlement of the complaints
and dispute would not be enough, the quality complaints and disputes would also
be examined by the Export Inspection Agency (Which is under the administrative
and technical control of the Export Inspection Council of India, Ministry of
Commerce) as a Member-Secretary of the 'Regional Committee" from technical
point of view, to assess whether there had been any technical failure for which
a complaint had been received. Such technical failure may be with regard to
technical deficiency of not meeting the standard, manufacturing/design defects,
etc. To eliminate such failures and avoid such complaints in future proper
technical advice may be extended by the Export Inspection Agency to the
manufacturers. This authority will also examine the aspect whether the
incidence of complaints have increased by way of circumvention of the law
and/or change of procedures and suggest remedial measures. This would enable stricter
enforcement of the statutes to upgrade the quality and thereby image of
country's export. A report in this regard would be sent to the 'Nodal Officer'
in the office of the Director General of Foreign Trade and also to the
concerned Division of Ministry of Commerce.
IX.
The 'Regional Committee' will also send
a consolidated quarterly report in respect of all cases referred to it with
details of action taken to the Trade Disputes Cell in the office of Director
General of Foreign Trade.
(i)
The 'Nodal Officer' will arrange to
forward one copy of the complaint received from the Trade Disputes Cell in the
office of Director General of Foreign Trade in the prescribed format or
otherwise to the respective Registering Authority viz. Export Promotion
Council/Commodity Board etc. as the case may be for investigation, settlement
and report endorsing a copy of the letter to the concerned Territorial Division
in the Ministry of Commerce for information.
(ii)
The Export Promotion Council/Commodity
Board (Registering Authority) would arrange to get these considered and
examined through a 'complaint Panel/Committee' specially constituted for this
purpose.
(iii)
The 'Complaint Panel/Committee' would
investigate and make efforts to settle the complaint amicable within three
months from the date of receipt of the complaint from the office of the 'Nodal
Officer' viz. Trade Disputes Cell.
(iv)
The Council/Board will submit monthly
reports to the 'Nodal Officer' who will monitor the progress of action taken
for settlement of the dispute.
(v)
If the disputes are settled to the
satisfaction of the foreign buyer through conciliation, and/or of the Complaint
Panel/Committee, after considering the facts of the case, decide that the Indian
Exporter/Manufacturer is not to be blamed and/or that the complaint is not
genuine, the case will be closed and a report sent to the 'Nodal Officer' with
a copy to the concerned Territorial Division in the Ministry of Commerce.
(vi)
In cases when the 'Complaint
Panel/Committee' fails to resolve a dispute amicably and conciliation does not
take place and the Panel/committee feels that the fault lies with the Indian
Exporter who is not cooperating, on its recommendation, Councils/Commodity
Boards will take action to de-register such exporter after issue of show cause
notice and a hearing. The 'Nodal Officer' will be informed of the action taken
and also of further action if warranted in the case.
(vii)
If the dispute is covered by an
arbitration clause in the export contract or where the firms concerned agree to
arbitration and a large financial stake is involved, the same will be
transferred to the "Indian Council of Arbitration" for consideration
who will send a report to the 'Nodal Officer' with a copy to the Territorial
Division in the Ministry of Commerce.
(viii)
In cases where there is no arbitration
clause or firms do not want arbitration and the sum involved is not significant
and even on the recommendation of the Complaint Panel/Committee of/export
promotion council/Commodity board, it has not been possible to resolve the
mater or to take any action against the erring exporter, such cases will be
reported to the 'Nodal Officer' for taking further necessary action as
recommended by the "Complaint Panel/Committee etc.
(ix)
The 'Nodal Officer' will consider such
cases reported by the 'Complaint Panel/Committees' and after due examination
and investigation and after exhausting reconciliation efforts take action to
de-register/debar the defaulting exporters by issue of show cause
notice/hearing etc. and/or take such action as necessary, as per rules &
regulation in force including in appropriate cases legal action, depending upon
the gravity of offence.
(x)
The Export Promotion Council /Commodity
Boards will send a consolidated quarterly report in respect of all cases
referred to them with details of action taken to the Trade Disputes Cell in the
office of Director General of Foreign Trade.
(i)
The 'Nodal Officer' will have these
cases examined and dealt with in the trade disputes cell in the office of
Director General of Foreign Trade. Initially efforts will be made to arrange
for settlement of the complaint amicably, failing which action will be taken
against the erring firms in terms of the Foreign Trade (Development &
Regulation) Act. In cases where it is felt that action has to be taken by any
other authority in Government of India, such cases will be referred to
respective competent authority for suitable action as per the gravity of the
offences.
(ii)
The 'Nodal Officer' will send a report
of action taken in such cases against the exporters to the concerned
Territorial Division in the Ministry of Commerce. Efforts will be made to
concretise action in such cases within three months of the receipt of the
complaint.
(iii)
These complaints shall be analysed to
ascertain their cause and evolve remedial measures by way of reference to the
concerned authority to avoid recurrence of such complaints in future.
The
Secretariat of the 'Nodal Officer' viz the Trade Disputes Cell in the office of
the Director General of Foreign Trade shall also maintain a data base of
importers lodging complaints against Indian exporters, as well as, data base of
such exporters against whom complaints have been received. It shall also
identify commodities for which the incidence of quality complaints are frequent
and will interact with the concerned Commodity Division in the Ministry of
Commerce for evolving measures to arrest their incidence.
While
the respective Territorial Division in the Ministry of Commerce will be the
repository of all complaints received in respect of their territory and for
coordination work relating thereto as the nodal point for all matters relating
to international trade of their territory, it shall be the 'Nodal Officer' in
the office of Director General of Foreign Trade, Udyog Bhavan, New Delhi who
would be following up on these complaints for their redressal and remedial
measures.
The
complaints of Indian exporters/importers against their importers/exporters
abroad received in the office of the 'Nodal Officer' in the office of Director
General of Foreign Trade will be referred to the concerned Missions abroad for
arranging for their amicable settlement. The Missions shall keep the 'Nodal
Officer' informed of the action taken on such reference with an endorsement
directly to such complainants and respective EPCs/CBs for any follow-up action
such as publication of the names of such defaulting Importers/Exporters in
their journal by way of information/warning to all concerned Exporter and
Importer firms. A data base of such cases shall also be maintained in the Trade
Disputes Cell in the office of Director General of Foreign Trade, Udyog Bhavan,
New Delhi.
ANNEXURE-I
(To be filled in by the complainants)
1.
Complaint lodged by
(Name & full Address)
2.
Against whom
(Name & full Address)
3.
Whether the supplier is a merchant
exporter or a manufacturer exporter
4.
Particulars of complaint
(Attach separate sheets if required)
5.
Total quantity & value of
consignment
(Please furnish copy of shipping invoices)
6.
Quantity & amount of claim, if any
7.
Particulars of contract/L.C. if any
giving details of technical requirements stipulated (copy may be furnished)
8.
Whether any sample was approved?
(Give particulars)
9.
Whether any agency was nominated for
inspection prior to shipment.
10.
Date of arrival of goods at the
destination port.
11.
Condition of the goods at destination
port.
12.
Bill of Lading/Airways Bill No.(Copy
may please be furnished)
13.
Whether consignment was in sealed
condition? If so, give particulars of seal used.
14.
Whether exporter forwarded copy of
inspection certificate(Please furnish copy)
15.
A) Whether any independent survey of
the goods was done(Please furnish copy of every report)
b) Whether survey was carried out with or without the consent of
supplier?
16.
Whether quality defects were also
covered by insurance(for perishable goods)
17.
Whether imports were effected from this
supplier/exporter in the past?
18.
Any complaints on past supplies &
its mode of settlement.
19.
Whether further orders have been placed
with this supplier/exporter subsequently?
20.
Any other information that may be of
assistance in investigation of this complaint.
The
foregoing information/particulars are true to the best of our knowledge and
belief.
Place
Date
Signature………………
(Name
in Capital Letters)
Designation
Seal with address & name of firm
ANNEXURE-II
(Other
than Quality complaints)
1.
Complaint lodged by (Name & full
address)
2.
Against whom(Name & Full address)
3.
Whether the supplier is a merchant
exporter or a manufacturer exporter?
4.
Particulars of complaint(Please furnish
details)
(a)
Non-payment of Commission
i)
Export order/LC(Copy may be furnished)
ii)
Agency agreement(copy may be furnished)
iii)
Export invoice(copy may be furnished)
iv)
Amount & due date as commission
v)
Copies of correspondence
exchanged(Furnish)
vi)
Any complaint in the past and mode of
settlement
(b)
Non-execution of export order
(i)
Export order/LC(Copy may be furnished)
(ii)
Whether any sample was approved(Give
details)
(iii)
Copies of correspondence exchanged.
(iv)
Was anything pending from your end?
(v)
Reasons for delay/non-execution, as for
as known
(c)
Short supplies
(i)
Whether any agency was nominated for
inspection prior to export?
(Furnish details including inspection certificate, if any)?
(ii)
Short landing survey certificate(copy
may be furnished)
(iii)
Whether any survey was carried out at
port of destination
(Please enclose copy)
(iv)
Packing list(Please enclose copy)
(v)
Reason for short landing as for as
known.
(vi)
Copies of correspondence exchanged.
5.
Whether imports were effected from the
same exporter in the past?
6.
Any complaint on post suppliers and
mode of settlement
7.
Whether further orders have been placed
with the same exporter?
8.
Any other information that would help
in investigation of the complaint.
The
forgoing information/particulars are true to the best of out knowledge and
belief.
Place Signature
Date Name
Designation
Seal with address
& name of firm