RESOLUTION OF DISPUTES ARISING OUT OF INTERNATIONAL TRADE TO BE FACILITATED BY DGFT: ONLINE METHODOLOGY INTRODUCED EFFECTIVE FROM 11.02.2019
- Maintaining an enduring relationship with foreign buyers and suppliers is of utmost importance to create confidence in the business environment of India. So, whenever any disputes related to International trade arise, it is in the interest of all that the same is settled amicably at the earliest.
- In view thereof, the CQCTD (Committee on Quality Complaints and Trade Disputes) has been formed under The Ministry of Commerce and Industry, Government of India.
- Prior to this, there was no such mechanism which dealt with resolving such disputes. In an endeavor to resolve such complaints or trade disputes effectively, The Ministry of Commerce and Industry, has come up with the CQCTD by way of introducing Chapter 8 to the Foreign Trade Policy 2015-2020 to be read with Handbook of Procedures 2015-2020 Volume III.
- The said chapter of the Foreign Trade Policy provides for the mechanism where an online module has been created to facilitate filing and tracking of complaints before CQCTD. Such mechanism is provided in the Trade Notice and such is effective from 11/02/2019.With effect from 11/02/2019 any complaint and dispute related to quality or trade disputes arising out of international trade must necessarily be filed online on the given portal.
- It must be noted that the CQCTD proceedings are only re-conciliatory in nature and the aggrieved party, whether the foreign buyer or the Indian importer are free to pursue any legal recourse against the other party.
CQCTD: COMMITTEE ON QUALITY COMPLAINTS AND TRADE DISPUTES
- CQCTD will be constituted in 22 offices of DGFT, and the jurisdiction is mentioned under Chapter 8 of the Handbook of Procedures 2015-2020 Volume 3, which will precisely deals with such disputes.
Functions of the CQCTD
- The CQCTD will be responsible for inquiring and investigating into all Quality related complaints and other trade related complaints falling under the jurisdiction of the respective Regional Authorities. The jurisdictional Regional Authorities will take prompt and effective steps to redress and resolve the grievances of the importers, exporters and overseas buyers, preferably within 03 months of receipt of the complaint. Wherever required, the Committee (CQCTD) may take the assistance of the Export Promotion Councils/FIEO/Commodity Boards or any other agency as considered appropriate for settlement of these disputes.
In case of complaint against Indian Exporter.
- In case of a complaint filed before the CQCTD, the Indian Exporter will be called for providing its explanation and thereafter post granting of opportunity to the parties i.e, complainant and the Indian Exporter, the CQCTD will decide accordingly.
- Various actions may be taken against the erring exporters under the Foreign Trade ( Development and Regulations) Act, 1992 which are provided hereunder-
(a) Section 8 of the Act empowers the Director General of Foreign Trade or any other person authorized by him to suspend or cancel the Importer Exporter Code.
(b) Section 9 (2) of the Act empowers the Director General of Foreign Trade or an officer authorized by him to refuse to grant or renew a license, certificate, scrip or any other instrument bestowing financial or fiscal benefit granted under the Act.
(c) Section 9(4) empowers the Director General of Foreign Trade or the officer authorized by him to suspend or cancel any License, certificate, scrip or any instrument bestowing financial or fiscal benefit granted under the Act.
(d) 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 provision of the Act, any Rules or Orders made there under or the Foreign Trade Policy.
10. Not to mention that the Indian party must have violated the relevant legal provisions for imposition of penalty and initiating punitive actions.
In case of complaint against the foreign exporter
11. After receiving the complaint the respective RA, will forward a copy of the complaint so received to the concerned Foreign Trade Division in the Department of Commerce. Then, the Department of Commerce will take up the complaint with the concerned Embassy/ High Commissioner in India for effective resolution of the complaint
12. The committee can also authorize the Export Inspection Agency or any technical authority to assess whether there has been any technical failure of not meeting the standards, manufacturing/ design defects, etc. for which complaints have been received.
MATTERS FOR WHICH COMPLAINTS CAN BE FILED ARE AS FOLLOWS–
A. Complaints received from foreign buyers in respect of poor quality of the products supplied by exporters from India;
B. Complaints of importers against foreign suppliers in respect of quality of the products supplied; and;
C. Complaints of unethical commercial dealings categorized mainly as
*non-supply/ partial supply of goods after confirmation of order;
*supplying goods other than the ones as agreed upon;
*non-adherence to delivery schedules, etc.
FORMAT OF LODGING COMPLAINT
13. To file a complaint, the complainant has to visit the DGFT website and fill the Online Application Form along with the relevant documents to support the complaint. The relevant screenshot of the page is extracted hereunder for reference-
14. After filling the above form, same has to be submitted to the jurisdictional RA of DGFT/SEZ as mentioned in Appendix 1 of the Handbook of Procedures. Complaints filed by foreign entity against Indian exporter shall reach the Regional Authorities of the said Indian Exporter and necessary actions can be initiated by the concerned Regional Authorities.
15. In view of this new mechanism introduced by the Government, it can be very well interpreted that the government is highly focusing on increasing foreign trade and reducing any disputes arising thereof. In order to make international trade more effective and efficient and secure a sense of trust in the business environment, such mechanism will certainly benefit the country in the years to come.
16. However, it must be kept in mind by the executive while deciding upon such complaints that the domestic industry is not harmed unreasonably and that actions are not taken with a preconceived notion against the Indian traders.