Poor drafting – on amendments to the Customs Act

News: Budget 2022-23 has proposed to amend the Customs Act. It will criminalize the publishing of any information relating to the value or classification or quantity of goods entered for export from India, or import into India, or the details of the exporter or importer of such goods.

What is the objective of the proposed amendment?

It intends to protect the trade secrets of exporters and importers that may be stolen and sold with an aim to compromise competitiveness and commercial advantage. The aim is to protect the privacy of specific transactions of Indian businesses.

Why criminalizing publishing of Customs data is a bad idea?

First, It shows administrative steps taken to end the information leakage are not efficient.

Second, there is no existing clause under which such data leaking can be prosecuted. Also, there is no internal accountability mechanism for such leakage.

Third, the drafting by CBIC is done in a careless manner and lack of attention has been given to possible negative consequences.

For instance, the intent should be specifically mentioned. The amendment has used broad and vague meaning words which can be interpreted differently by investigative agencies and others.

Lastly, if the aim of such amendment is to protect the privacy of specific transactions of Indian businesses, proposed data privacy laws would be an appropriate law.

What is the way forward?

First, data on Indian exports should be disaggregated and timely available to allow for analysis in an anonymized form.

Second, the state should not overreach, and it must draft new regulations, laws, and statutes narrowly with clearly defined objectives to avoid handing over excessive powers to police persons, tax officials, or other agencies of the state.

Source: This post is based on the article “Poor drafting” published in Business Standard on 8^th Feb 2022.