EU introduces fastener import licensing

On 3rd June the European Union required fastener companies to obtain a prior licence to import an extensive range of steel and some stainless steel fasteners from any country outside its membership.  

The surveillance system is part of wider ranging measures on steel imports, which EU Trade Commissioner Cecilia Malmstrom says will “assist the Commission to better monitor market developments in the steel sector and will give a strong political message to third countries that the EU is actively following the situation”. EU member countries are required to administer the licensing system and report import data to the Commission within ten days of the month end – far quicker than normal compilation of Eurostat import data.  

In February the EU was forced to repeal anti-dumping duties of up to 74.1% on steel fasteners from China, following a series of negative rulings by the WTO dispute body. At the time the European Commission assured member states and fastener manufacturers it would listen sympathetically to a new complaint on Chinese dumping but said it could not initiate a new investigation under its own initiative.  

The prior-surveillance system is designed to accelerate building a picture of the change in the pattern of trade following the removal of the anti-dumping duties. 

The current volatility of steel prices in China, however, appears to be making many EU importers wary of switching purchases to the country on anything other than basic fasteners, with major importers of higher grade products, at least for the time being, holding firm to supply relationships elsewhere in Asia. This means it may be some while before the EU sees a sufficiently clear upswing in Chinese imports to feel confident it can justify a new investigation, which could then take up to 15 months to reach definitive conclusions. 

Implementation of the import licensing system has been inconsistent across EU member states. Electronic systems are reported to be operating effectively in the UK and the Netherlands. Swedish importers also report smooth issue of licences. 

Implementation of an electronic system in Germany was delayed, resulting in the small licensing branch being flooded with applications, which have to be processed manually. Importers have reported long delays in receiving licences. France is also processing licences manually but appears to be turning them round within the five day limit specified by the Commission. Processes in Italy and Spain are reportedly more challenging with the former requiring tight adherence to the use of correct paperwork and substantial additional costs being incurred by Spanish importers. The worst hit importers appear to be in Poland, where authorities have reportedly been both slow and unresponsive in implementing the measure. 

In response to representations from the European Fastener Distributors Association, Commissioner Malmstr.m wrote that her department “made specific efforts to ensure that it would not impose a disproportionate burden on importers or disrupt normal trade flows in any way. These efforts include encouraging electronic procedures and avoiding any unnecessary administrative requirements”. The Commission certainly issued a strongly worded circular to member state authorities attempting to eliminate lack of clarity in interpretations of the regulation and calling for firm action to ensure an effective system was in place. 

The British and Irish Association of Fastener Distributors, BIAFD, however says it learnt that the Commission’s original draft regulation wanted the licensing requirement to come into force the day after publication and was to be a paperwork system. It was only as result of representation from member states, apparently, that the twenty-one working day period before implementation was conceded.EU manufacturers supplementing their own production range are also obliged to obtain licences but generally appear to have welcomed the move as evidence of the Commission’s commitment to the re-establishment of trade measures on fasteners from China.