An export disaster awaits UK manufacturers of iron, steel or steel products now that new EU Russian sanctions are in force, according to the Confederation of British Metalforming (CBM).
In fact, the CBM is urging companies to explore the legislation as material test certificates will be required to confirm the facility and location at which the material was originally melted and poured. The new rules require evidence that iron and steel used to produce components in a third country (outside of the EU, which means the UK) does not originate in Russia.
It is argued that many firms will be unaware of the legislation change concerning exporting and that, in some cases, it could lead to 'catastrophic production stoppages in critical automotive and aerospace sectors'.
"It is important to recognise that the scope of the EU measures on iron and steel products extends far beyond primary and secondary steel products."Stephen Morley, CBM president.
"It is important to recognise that the scope of the EU measures on iron and steel products extends far beyond primary and secondary steel products to encompass many finished goods, including fasteners and other industrial consumables," said Stephen Morley, president of the CBM. "They will also cover many 'retail' products, such as stoves, cookers and kitchen and sanitary ware," he said.
Morley said that the CBM has been warning its 200-strong membership for over a month now and ensuring they can provide the evidence needed at the point of importation. He said it was a case of preparing for the worst case scenario, 'while fervently hoping that EU authorities recognise that the stringency of compliance requirements will jeopardise the flow of UK to EU supply chains'.
The CBM has been working closely with national audit, tax, advisory and risk firm Crowe and it's expert customs team to validate its assessment and to interrogate the recently released FAQ Guidance by the European Commission.
The CBM, which supports UK manufacturers of fasteners, forgings and pressings, cold-rolled and sheet metal products is concerned that other associations and industrial membership bodies have not recognised the significance of the new sanctions and the massive hit on export trade it could bring.
"There's a lot of mixed messaging out there currently, with some suggestions that German Customs may take a more pragmatic view about what evidence is required, whilst the latest info from Belgium and France suggest a more stringent approach."Steve Morley, president of the CBM.
For Steve Morley, the new sanctions are adding to the woes of those at the sharp end. Not only is there mixed messaging out there, with Germany adopting a more pragmatic view of what evidence is required while the French and Belgians are suggesting a more stringent approach.
“It’s so confusing for bosses that are already struggling with the impact of increased admin and trying to grapple with extortionate inflationary pressures and energy prices," said Morley. "It’s one more spectre on the horizon that we could all do without.”
Following continued pressing of the Department for Business and Trade, the CBM has finally received information from the UK, and it appears we are following a similar route to the European Union.
Steve concluded: “The wording implies more flexibility on the part of UK Customs authorities; however, evidence is still required on the country of origin of the iron and streel products processed in the third country (or third countries).
“This includes Mill Test Certificates, but other documentation may be acceptable and we’re just seeking further clarification on this.
“These sanctions - across the board - could have a dramatic impact on both UK exporters and importers, with many of our members bringing in their steel from all over the world. It’s a delicate issue and our best advice is to plan ahead to avoid any supply chain disruption.”