Tougher checks for port SEZs

NEW DELHI: If you thought special economic zones (SEZ) would be a free-for-all, think again. Port-based SEZs will be subjected to stringent security checks and monitoring by Customs officials. The government is planning to modify the SEZ rules to allow this. Adani-promoted Mundra SEZ, Balaji Infra Projects in Raigad, Kakinada SEZ and Kandla may feel the heat with the new regulation.

This comes close on the heels of the revenue department raising concerns about the Mundra SEZ having a functioning port in place, before getting notified as a zone. No existing unit can covert into a SEZ under the present rules. The commerce ministry, however has argued that ports were on par with other infrastructure like roads and rail roads. While both the ministries examine the issue of Mundra port converting into SEZ, they have decided to address other regulatory defects.

“The rules will have to be amended to create a regulatory mechanism which will allow customs to carry out all security checks and other necessary functions,” a government official said. India is bound by international obligations with regard to security and other regulations which govern the movement of vessels at ports. At present, the SEZ rules only detail out cargo clearance norms. It is silent on all other regulatory issues like clearance of vessels for landing or disembarking, checking of vessels before landing, filing of papers with details of cargo, which a port confronts on a daily basis.

For example, the authority manning a port has to give a specfic permission to any vessel which wishes to dock there. The vessel also has to be thoroughly checked before it can dock. Its import or export general manifest, which lists out the goods in the cargo, has to be verified and the containers sealed. All these functions are carried by Customs authorities world over.