India becomes first South Asian country to get access to America's cutting-edge technology

What in news:

  The US had recognized India as a major defense partner - a move which paved the way for country's STA-1 status.

  Both the countries had reached an understanding under which India would receive license-free access to a wide range of dual-use technologies.

Context:

  The United States designated India as a Strategic Trade Authorization-1 (STA-1) country - a status that will allow the country to buy highly advanced and sensitive technologies from America.

  With such coveted designation, India will now be at par with the United States' closest allies and partners such as NATO.

  In a statement, US Commerce Secretary Wilbur Ross said that this new designation reflects India's membership in three of the four multilateral export control regimes, as well the development of its national export control system.

  "US companies will be able to more efficiently export a much wider range of products to Indian high technology and military customers.

  India's new status will benefit US manufacturers while continuing to protect its national security.

  STA Tier 1 treatment will expand the scope of exports subject to the Export Administration Regulations (EAR) that can be made to India without individual licenses.

  This regulatory change will enhance the bilateral defense trade relationship and result in a greater volume of US exports to India.

  Currently there are 36 countries on STA-1 list. India is the only South Asian country to be on the list.

  Other Asian countries designated as STA-1 are Japan and South Korea.

  STA-1 provides India greater supply chain efficiency, both for defense and for other high-tech products, that will increase activity with US systems, the interoperability of the systems, and will reduce time and resources needed to get licensing approved.

  Both the countries had reached an understanding under which India would receive license-free access to a wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.

  STA-1 designation authorizes the export, re-export and transfer (in-country) of specified items on the Commerce Control List to destinations posing a low risk of unauthorized or impermissible uses.

 

License Exception Strategic Trade Authorization (STA)

  A part of the ongoing Export Control Reform is the license exception Strategic Trade Authorization (STA).

  This type of U.S. Government authorization allows a controlled item to be exported under defined conditions without a transaction-specific license.

  The defined conditions for any license exception allow for an audit trail to ensure the U.S.

  Governments ability to enforce the controls. Eligibility to ship under a license exception is not a de-control.

  The STA permits the export of a defined set of items on the Commerce Control List to Allies and certain other friendly countries without a specific license.

  These items include certain dual-use items and certain less significant munitions items, predominantly parts and components. The STA Imposes enhanced compliance requirements by requiring foreign importers to certify in advance of receipt of STA-eligible items that they will abide by U.S. export control regulations, including the need to obtain a U.S. license to export or re-export outside of STA-eligible countries.

License Exception STA Decision Tool

  The U.S. Department of Commerce, Bureau of Industry and Security (BIS) offers a tool to users of License Exception STA to help them determine if they are eligible to use and will be in compliance with License Exception STA.

  This tool serves as a checklist to identify and verify the key eligibility and compliance requirements of the license exception.

  The STA exception is only relevant to exports, reexports, and transfers for which a license is required under the EAR.

  Thus, if the EAR does not impose an obligation to apply for and receive a license before exporting, reexporting, or transferring an item subject to the EAR, STA is not relevant to the transaction and this tool is not relevant to you.

Expected prelims question:

Consider the following statements

1.      The United States designated India as a Strategic Trade Authorization-1 (STA-1) country

2.      The STA permits the export of a defined set of items on the Commerce Control List to Allies and certain other friendly countries without a specific license

Which of the given statements are/is correct?

a)      Only 1

b)      Only 2

c)      Both 1 and 2

d)      None of above

Ans - c

Expected mains question:

What do you mean by License Exception Strategic Trade Authorization (STA).critically analyse the reasons whyUnited States designated India as a Strategic Trade Authorization-1 (STA-1) country