Starting September 30, 2023, the European Union and United Kingdom implemented new sanctions targeting specific steel products processed from Russian materials in third countries. This development presents significant challenges for sellers operating in European markets, particularly those dealing with metal goods.
EU Sanctions on Russian Metal Trade: Context and Implications
The ongoing tensions between the EU and Russia have escalated through multiple rounds of sanctions, primarily concerning the Ukraine crisis, Crimea annexation, and Russian involvement in Syria. The latest measures specifically target Russia's metal export industry, aiming to restrict its access to European markets and reduce revenue streams supporting the Russian economy.
These sanctions require all metal products declared under HS codes beginning with 72 or 73 to provide documentation, including Material Transfer Certificates (MTC), proving their non-Russian origin. This heightened scrutiny affects various steel products, from household items to industrial materials.
Key Products Under Scrutiny
EU customs authorities are focusing on two primary categories:
- HS Code 73: Iron and steel products including kitchenware, household items, sanitary ware, and related components
- HS Codes 7206-7229: Iron/non-alloy steel semi-finished products, stainless steel, alloy steel products, and steel drill rods
The MTC Certificate: Essential Documentation for Compliance
The Material Transfer Certificate serves as a verifiable "identity document" for metal products, tracing their origin through the supply chain. The certification process involves:
- Application Submission: Manufacturers or operators submit requests to authorized certification bodies
- Sample Testing: Typically eight product samples undergo material composition analysis
- Report Review: Certification bodies evaluate test results against standards
- Certificate Issuance: Successful applicants receive documentation confirming non-Russian origin
Required documentation includes business licenses, product composition tables, and detailed applications. The certification process duration varies by product complexity and testing requirements.
Alternative Documentation When MTC Is Unavailable
Sellers unable to immediately obtain MTC certificates may submit supplementary evidence, though these carry higher risk of customs delays:
- Commercial invoices and packing lists
- Quality certificates (e.g., CE marks)
- Supplier declarations establishing long-term non-Russian sourcing
- Production records and cost documentation
- Export customs declarations from origin countries
- Manufacturer statements specifically excluding Russian materials
Customs authorities retain discretion to request additional verification, including full MTC certification, if these alternatives prove insufficient.
Strategic Recommendations for European Market Sellers
To maintain uninterrupted trade flows, sellers should implement these compliance measures:
- Supply Chain Audits: Map all material sources and obtain verifiable documentation from suppliers
- Certification Prioritization: Initiate MTC applications for high-volume products immediately
- Documentation Systems: Establish organized records for all alternative compliance documents
- Regulatory Monitoring: Track updates to EU sanction implementations and HS code classifications
- Product Adaptation: Evaluate material substitutions to reduce dependency on restricted supply chains
The EU's enforcement of these sanctions reflects broader trends toward supply chain transparency and geopolitical trade restrictions. While compliance requires significant operational adjustments, proactive sellers can transform these challenges into competitive advantages by demonstrating reliable, auditable supply chains.