Industry News

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 working 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 help 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 and there are very mixed reports about their state of readiness. The UK has a seemingly efficient electronic system in place already. Germany aims 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. 

Fastener importers that are members of a national association within the EFDA network appear to have been very well supported and should have systems in place to ensure the supply chain to critical customers is not affected – providing their licensing authority is also up to speed in time. This magazine also ran substantial coverage in its May issue. Outside of that, though, there appears to have been very little information for importers, which suggests many may still not be fully aware of the requirements and, critically, not have taken action to ensure they have licences for inbound consignments. 

According to UK fastener distributor association BIAFD, UK authorities had issued close to 400 accounts for importers and freight agents by 23rd May. However, BIAFD research in to UK trade data indicates there were more than 2000 importers of the affected steel and fastener CN codes in 2015. If that pattern is, as appears highly probable, repeated in other EU countries, there is a very real jeopardy of consignments being held in ports and airports until licences can be obtained. That clearly risks importers incurring significant charges and, if parts are time critical, could result in line stoppages in major assembly operations.

The import requirement is not restricted to fastener distributors. Many EU fastener manufacturers import parts to supplement their production range. Hardware and DIY retailers as well as major OEM assemblers are also likely to need licences for direct imports. 

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.