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Variety of Steel Imports Become Subject to New European Prior Surveillance System

On 29 April 2016, Commission Implementing Regulation 2016/670 establishing a prior surveillance system for imports of specified iron and steel products into the EU was published in the Official Journal. Hong Kong traders may recall that the setting up of a prior surveillance system was one of several measures proposed by the European Commission in its communication concerning the European steel sector’s challenges dated 16 March 2016.

The prior surveillance system has been introduced because of the threat of injury to EU steel producers caused by recent trends in imports of steel products, the current vulnerability of the EU steel industry, the continuing weak demand on the EU market, and the likelihood that current and future excess capacity would be re-directed to the EU if demand recovers.

Hong Kong traders with interests in the steel industry or businesses associated with the EU steel industry may wish to make themselves familiar with the products identified by the new Regulation. The new Regulation will apply to imports of the 46 products specified in its Annex I originating in third countries other than Norway, Iceland and Liechtenstein and whose net weight exceeds 2500 kg.

The Annex lists certain products of iron and steel which may be relevant to, or become part of, products used in other industry sectors. Therefore, traders other than those directly selling iron and steel products may be affected by the prior surveillance system, should this trigger further actions, such as, e.g., anti-dumping measures. 

Since the publication of the prior surveillance Regulation, the Commission has issued a corrigendum to it on 29 April 2016, to clarify that nuts of iron or steel, not exceeding 12mm, are included in Annex I as their TARIC code was mistyped.

If an importer intends or wants to import a product caught within the remit of the prior surveillance system, they must apply to a competent authority of a Member State for a surveillance document, which is a form of licence. A list of competent national authorities can be found in Annex II of the Regulation. A surveillance document issued by one of the authorities listed in Annex II will be valid throughout the EU.

The importer must submit its application to the competent national authority, which will, within 5 working days of receiving the application, issue a surveillance document without charge.

The applicant is required to provide the following information in its application:

  • The full name and address of the applicant (including telephone and e-mail or fax numbers and any number identifying the applicant to the competent national authority);
  • The applicant’s VAT registration number (if liable for VAT);
  • If appropriate, the full name and address of the declarant or of any representative appointed by the applicant (including telephone and e-mail or fax numbers);
  • A description of the product to be imported (including trade name, TARIC code, place of origin and place of consignment);
  • The quantity of the product to be imported in kilograms and if appropriate, any other additional unit (e.g. pairs, items, etc.);
  • The value of the goods, costs, insurance and freight (CIF) at the EU frontier in euros; and
  • A statement signed and dated by the applicant confirming that the information in the application is true.

The importer must also submit commercial evidence of the intention to import, such as the contract of sale or purchase, or the pro forma invoice.

Each surveillance document issued will be valid for four months and will apply for those products throughout the EU. However, unused or partly used surveillance documents may be renewed for an equal period upon application to the competent national authority.

The obligation to apply for a surveillance document will apply 21 working days after entry into force of the new Regulation. Before then, any imports of subjected products will be able to enter the EU without surveillance documents. Hong Kong traders should bear in mind that the Regulation entered into force on the day after it was published, namely, on 30 April 2016.

Member States will regularly inform the Commission of the details of the quantities and values (in euros) for which surveillance documents have been issued and information on any anomalies, cases of fraud or of any occasion where they have refused to grant a surveillance document. When import trends threaten to cause injury to EU producers, the Commission may implement appropriate measures to safeguard the EU market.

The introduction of the prior surveillance system, so quickly after the Commission’s communication on tackling the EU steel crisis, demonstrates how seriously it is regarding the issue. Companies should be made aware that the Commission may implement other proposals set out in the communication, such as increasing anti-dumping and anti-subsidy measures, opening investigations based on the threat of injury rather than actual injury, improving the efficiency of the current procedure to open an anti-dumping investigation, increasing the use of written consultations and, in cases of emergency, imposing tariffs on dumped imports after merely informing Member States.

The new Regulation applies from 30 April 2016 until 15 May 2020. Please click on the following in order to examine:

Commission Implementing Regulation 2016/670
The Corrigendum to Commission Implementing Regulation 2016/670

Content provided by Picture: HKTDC Research
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