Out-Law News 2 min. read
21 Sep 2023, 8:51 am
The EU and the UK have introduced new Russian trade sanctions banning the import of certain iron and steel products that incorporate iron or steel inputs originating in Russia and undergo processing in other, ‘third’ countries.
The UK sanctions will come into force on 30 September. The EU restrictions will be rolled out in three phases - from 30 September, 1 April 2024 and 1 October 2024 – depending on the specific classification code of the imported iron and steel products.
Rachel Trease of Pinsent Masons said: “The UK restrictions were announced in April 2023 and the EU restrictions shortly after in June 2023. The phased implementation allows a period to implement compliance measures, and there is therefore no transitional period attached to the new restrictions.”
The EU regulations place an obligation on importers to provide evidence of the country of origin for the iron and steel inputs used in the processing of products in third countries. This requirement seeks to ensure that no Russian-origin materials are incorporated into the final products imported into the EU market.
At the moment of importation, importers must be prepared to produce evidence regarding the country of origin of the iron and steel inputs used in processing. Failure to provide such evidence may lead to EU customs authorities refusing to release the imported iron and steel products.
The EU regulations do not explicitly specify the exact documentation required to prove the country of origin for the iron and steel inputs. However, the European Commission has issued guidance that suggests a mill test certificate may be considered sufficient evidence, with customs authorities able to request additional evidence in cases of reasonable doubt.
Stacy Keen, sanctions expert at Pinsent Masons, said: “There is currently little insight as to how customs authorities in EU member states will approach the new requirements. The German customs office has issued guidance indicating that in addition to mill test certificates, the obligation to provide evidence can also be fulfilled by, among other things: invoices, delivery notes, quality certificates, long-term supplier declarations, calculation and production documents indicating the non-Russian origin of products.
“However, there may not be consistency in the approaches taken across EU member states and that may present challenges to businesses. The requirement to evidence origin may present a number of supply chain challenges and the practical effect is that if business cannot satisfy customs authorities as to the origin of iron and steel products, those goods may not be released by customs,” Keen said.
Rachel Trease added: “Even where a customer is not the importer, and therefore has no obligation to provide evidence of origin under the EU restrictions, they will likely want a copy of the evidence of origin to understand whether the products they are purchasing are caught by the Russian sanctions. The EU and UK first banned the import of certain iron and steel products from Russia in March/April 2022 and the new regulations serve to tighten import restrictions. Breaching sanctions is a criminal offence and business will need to ensure they have implemented risk-based due diligence and controls relating to the origin of their goods.”
Unlike the EU, there is no positive requirement in the UK’s Russian sanctions to provide evidence of origin. However, Keen said: “The UK guidance on third-country iron and steel makes clear that traders are expected to carry out due diligence on the origin of products and may be requested to present evidence of the supply chain of goods at the border.”