The Commerce Ministry on Monday further tightened the norms for obtaining registration certificates for wheat exports with a view to curbing fraudulent practices such as submission of improper documents by scrupulous traders.
On May 19, the DGFT issued guidelines to all its regional authorities (RAs) for strict compliance before issuance of Registration Certificates (RCs) to the eligible exporters.
These instructions, by the Directorate General of Foreign Trade (DGFT), are being issued as it has received information from sources that fraudulent back dated L/C showing date of issuance as on or prior to May 13, 2022, are being submitted by some unscrupulous exporters for issue of RCs.
Exporters will have to submit the message exchange date with foreign banks along with a valid irrevocable letter of credit (L/C), issued on or before May 13, to obtain registration of contracts (RC) to ship their consignments.
The government is allowing wheat shipments for which irrevocable letters of credit (LoC) were issued on or before May 13, when the ban of the export of the food grain was imposed.
In a trade notice, the DGFT said that in spite of these steps and due diligence exercised by RAs in the process, it has been apprehended that some of the exporters are applying for RCs based on "improper documents", so more checks are needed to be put in the system.
"In order to plug the loopholes, it has been decided that RAs will do a physical verification of all L/Cs, whether already approved or under process and for that if necessary, help of a professional agency may be taken. While doing physical verification, validation/endorsement of recipient banks may be ensured," it said.
Further in cases where the L/C date is prior to May 13, but the swift message exchange date between the Indian and foreign bank is after May 13, the directorate suggested the RAs to conduct full investigation (if required, through external experts).
"And if these are found to be ante-dated, immediately proceedings under Foreign Trade (Development and Regulation) Act, 1992 needs to be initiated against the exporter," it said adding such cases will be further examined for referring to enforcement agencies like Economic Offence Wing pr Central Bureau of Investigation.
In case of complicity of any banker in cases where ante-dating is established, necessary proceedings as per law will be initiated.
"Henceforth all RC applications found eligible for approval after physical verification of the LCs by the RAs, would be sent to a two-member committee of additional DGFTs constituted in DGFT (headquarters) for further checking and approval," it said.
After approval of this committee only, the concerned RA would issue RC to the exporter, the notice said.
"RAs are requested to process all such applications with due diligence and in compliance with the instructions," it said.
