EU import licences required for fasteners from 31st May
25 May 2016
From 31st May many steel and some stainless steel fasteners will require a licence before they can enter the EU market. Without a licence these goods, originating from any country outside the EU and EEA, will not clear customs and will remain in the docks until one is obtained.
The prior-surveillance regime was enacted through European Commission Implementing Regulation 2106/670 published on 29th April, which gave EU member states, importers and agents 21 days to begin applying for licences.
The measure was introduced in response to the political and media furore over the penetration of low cost, subsidised imports of steel from China. However, following the repeal in February of anti dumping measures on steel fasteners from China, the Commission also included, alongside a wide range of steel products, fourteen CN or tariff codes covering steel and some stainless steel threaded screws, bolts, nuts and washers. While steel has previously been subject to prior-surveillance it is unprecedented on fasteners.
Prior-surveillance requires EU member states to report data on imports of the products under scrutiny to the Commission every month, accelerating the rate at which it can build a picture of the pattern of trade. Change in the pattern of trade is a fundamental basis to initiate anti dumping and/or anti subsidy investigations. Having been forced to repeal the previous anti dumping measure on steel fasteners following a series of four critical rulings from the WTO Dispute Body, the European Commission is understandably circumspect about launching new investigations without tight adherence to WTO rules. It will require a formal complaint from European fastener manufacturers to trigger an investigation but solid evidence of imports from China ramping up will underpin claims that material injury to EU industry will recur unless trade measures are reintroduced
The fastener products requiring import licences fall under the following CN Codes:
7318 12 90, 7318 14 91, 7318 14 99, 7318 15 41, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, 7318 15 90, 7318 16 91, 7318 16 99, 7318 19 00, 7318 21 00, 7318 22 00
A full copy of Regulation 2106/670 in English including all the steel CN codes involved can be downloaded from here
There was an error in one CN code in this regulation subsequently corrected by a corrigendum. The original regulation read 7318 1619 instead of 7318 1691.
Imports of more than 2500kg of each CN code require a licence. Licences are valid for four months but require commercial evidence of intent to import e.g. a copy of contract of sale or pro-forma invoice.
EU member state governments have been scrambling to put the licence regime into place. The UK has an established and efficient electronic application system. Once an account has been set up this should issue licences rapidly and directly into the UK customs clearance system. Germany is aiming to have its electronic system operational on 31st May. Other countries, for example Ireland, operate a purely manual, paperwork system.
Anecdotal reports from importers in Poland suggest its authorities will not be able to issue licences within the five-day period required by Regulation 2016/670. Reports from other EU countries suggest they may not have a system in place for the 31st May deadline.
The major concern, even in countries with an effective licensing system, is the lack of awareness amongst importers and freight agents.
By 23rd May, according to UK fastener distributor association BIAFD, the UK Import Licensing Branch had issued close to 400 accounts for importers and agents. However, BIAFD’s research on the UK Trade Database indicates that more than 2,000 companies imported the affected steel products and fasteners during 2015. While clearly not all of the importers will expect to receive consignments in the first weeks of June it appears inevitable that consignments will get caught up until a licence can be obtained. For the importer that could well mean incurring dock charges and, if the consignment contains time critical parts, there is the potential for line stoppages in major industries.
Fastener importers in the main EU markets appear to have been well supported by national and European trade associations so member companies are likely to already have systems in place to ensure the supply chain to critical customers is not affected. However, many fastener companies are not association members and many importers of the affected CN codes are not fastener specialists. These companies appear far less likely to have been alerted to the licensing requirement.
If your company imports fasteners direct from outside the EU and you have not already done so, you need to take action on licensing immediately or risk delays in your consignments.