This amendment to the Russia Regulations (EU 2014/833) and along with several other measures, introduced a prohibition on the import of certain Russian iron and steel products processed in a third country or multiple third countries. This built on measures banning the import of Russian origin iron and steel introduced in 2022. The ban on third country processed iron and steel is now added to this rule. Third country processing can be a means of concealing the Russian origin of iron and steel products, and this measure is targeted at reducing circumvention of sanctions on Russian iron and steel.
Guidance on Demonstrating Compliance
The prohibition on the import of Russian iron and steel products processed in a third country will come into effect from 30 September 2023. It is imperative for buyers/importers into the Union to have the information available regarding the origin of the materials used to produce the product. Requests with their seller in the third countries to obtain this information will not always be easy because they may find that the buyer is not privileged to have this information. The rule however is clear; if the materials cannot be certified to have no Russian iron or steel used in the production process import into the EU is prohibited.
Traders should be prepared to have documentation available to demonstrate evidence of a good’s supply chain, which must be consistent with the prohibitions under the regulations.
Evidence requested to be provided through documentation could include:
- the country of origin of the iron and steel products processed in the third country (or third countries) after the fact
- the date that the iron and steel product left its country of origin
- the country(s) and facility(s) where processing has taken place
An example of evidence may include, but is not limited to, a Mill Test Certificate (MTC), or Mill Test Certificates (MTCs) where the relevant information cannot be summarised in a single document.
Below you find some examples of situations in which the sanction rules have to be considered.
Scenario 1
A product of Russian origin that is a good listed in Annex XVII when it leaves Russia is then processed in a third country into another good listed in Annex XVII. Importing this product into the EU is prohibited.
For example, steel slabs (HS 7207) of Russian origin are exported from Russia and enter Country X. Here, they are transformed into hot rolled coils of alloy steel (HS 7225 – 7226) and are of Country X’s origin before being imported into the EU.
The import in this example would be prohibited.
Scenario 2
A product of Russian origin that is a good listed in Annex XVII when it leaves Russia then undergoes multiple stages of processing in one or more third countries, such that it loses its Russian origin before it is incorporated in the final transformation step, but remains an Annex XVII good. Importing the final Annex XVII product into the EU is prohibited because it contains an Annex XVII good that has been of Russian origin at some point during its lifespan.
For example, steel billets (HS 7207) of Russian origin are exported from Russia and enter Country X. Here, they are transformed into steel rods (HS 7215), such that they are now of Country X origin. These enter Country Y, where they undergo processing into steel wire (HS 7223), before being imported into the EU.
The import in this example would be prohibited.
Scenario 3
A product of Russian origin that is not a good listed in Annex XVII when it leaves Russia is then processed in a third country, such that it becomes a good listed in Annex XVII. Importing this to the EU is not prohibited under the Russia Regulations, because the product now entering the EU has incorporated non-Annex XVII items.
For example, some pig iron (HS 7201) leaves Russia and enters Country X. Here, it is transformed into slabs (HS 7207), before being imported into the EU.
The import in this example would not be prohibited under the Russia Regulations.
Scenario 4
A product of Russian origin that is a good listed in Annex XVII when it leaves Russia is then processed in a third country into an entirely different product (a good not listed in Annex XVII). Importing this into the EU is not prohibited under the Russia Regulations.
For example, coils of stainless steel (HS 7219 – 7220) of Russian origin are exported from Russia and enter country X. Here, they are used to manufacture a car (HS 8703), which is now considered to be of country X origin and is imported into the EU.
The import in this example would not be prohibited under the Russia Regulations.
The text of the addition says:
Article 3g
- It shall be prohibited:
- to import or purchase, as from 30 September 2023, directly or indirectly, iron and steel products as listed in Annex XVII when processed in a third country incorporating iron and steel products originating in Russia as listed in Annex XVII;
(with regard to products listed in Annex XVII this prohibition shall apply as of 1 April 2024 for CN code 7207 11 and as of 1 October 2024 for CN codes 7207 12 10 and 7224 90)
For the purposes of the application of this point, at the moment of importation, importers shall provide evidence of the country of origin of the iron and steel inputs used for the processing of the product in a third country.
