Navigating UK customs amid Russian iron and steel sanctions

Fri 17 Nov 2023
Posted by: Garima Srivastava and Barbara Barros Garcia
Trade News

Russian sanctions hammer

On September 30, the UK and EU brought into effect added import controls on iron and steel products as part of broader sanctions against Russia.

The primary objective of these controls is to scrutinise the origin and processing of iron and steel used in the production of items classified under Chapters 72 and 73 of the tariff, with emphasis on any potential connection to Russia.

New EU and UK regulations for Russian sanctions

UK and EU importers of iron and steel products are now required to maintain comprehensive records provided by their overseas suppliers. This regulation is the first phase of a multi-phase plan, focusing on iron and steel products listed in Annex XVII of the EU regulations, which have been adopted in the UK as well.

Phase 2 is scheduled to commence on April 1 2024, and will specifically target goods with Combined Nomenclature (CN) codes 7207 11, 7207 12 10, or 7224 90 that have been processed in a third country using steel originating in Russia.

Phase 3 will follow from October 1 2024, extending the controls to CN codes 7207 12 10 and 7224 90.

To assist importers in navigating the new regulations, the UK government has provided comprehensive guidance. The guidance offers insight into different scenarios, outlining the necessity for importers to demonstrate the historical supply chain of their goods.

What should importers of iron and steel products do?

Supply chain information must be backed by proper documentation. The documentation should include details such as the country of origin for the iron and steel products, the dates when these products left their country of origin, and information regarding the countries and facilities where processing has occurred.

For instance, a Mill Test Certificate (MTC) could be considered suitable evidence if they contain the required information.

Importers bear the responsibility of securing this evidence before importing goods that fall under these controls, specifically those categorised within Chapters 72 and 73 of the tariff. While customs authorities may detain goods for examination if the necessary evidence is missing, post-clearance checks are the primary means by which customs authorities will monitor this sanction.

We believe this is the reason why companies have been reporting recent detentions of metal goods at ports by the HMRC.

It is important to note that shipments from Great Britain (GB) into Northern Ireland (NI) will be subject to EU regulations. Therefore, importers should be mindful of this distinction and comply with the relevant regulations when importing into NI.

Consequences of sanctions and non-compliance

These regulations reflect ongoing efforts to ensure that sanctions against Russia are effectively enforced. UK importers must be diligent in collecting and maintaining the required documentation to meet these new regulatory demands.

UK customs authorities will intensify scrutiny on imports of iron and steel products to ensure compliance with the new regulations. Importers can expect more thorough inspections and documentation checks, potentially causing delays in clearance processes. Importers will have to reorganise logistics and inventory management strategies to account for potential delays at ports of entry.

Any non-compliance with regulations may result in UK customs detaining shipments lacking adequate evidence of origin and processing. Therefore, importers must maintain comprehensive and accurate documentation demonstrating the origin and processing of iron and steel products. Failure to provide this evidence can result in post-clearance checks, fines, and potential delays in clearance procedures disrupting the supply chain.

Conclusion

These implications underscore the critical importance of complying with the heightened scrutiny and stringent regulations imposed by UK customs.

Businesses engaged in importing iron and steel products must prioritise compliance, robust documentation practices, and foster collaborative relationships with customs authorities. This is vital for maintaining smooth import operations amid these geopolitical sanctions.