Italy introduces steel safeguard quota pullback option

Market: Metals
08/04/24

Italy's customs and monopolies agency has announced a measure that will allow steel importers to choose whether to clear their material or not if no safeguard quota allocation is available.

When filing customs documents, buyers will be presented with an option to opt out of clearing their material if a safeguard duty is payable owing to the exhaustion of a safeguard quota. The customer may then decide to only clear part of its cargo and pay a tax on any material that is not covered by the quota or alternatively store the excess steel goods at port.

Importers can still choose to clear their material without opting in for the new mechanism, in which case they would be able to custom clear their material, duty-free or not, and have it made available immediately.

"If you want to have the option to pull back, and then decide to clear, you will wait 10-15 days [until the duty is confirmed] so you lose time and you don't have access to the material for those 10-15 days," one market participant said.

This trade regulation tweak will be likely to mainly help importers, looking to custom-clear material when the quotas are close to exhaustion. In that instance, it would be possible for buyers, which have opted-in the pullback measure, to clear their cargoes without any risk of being asked to pay additional penalties.

The mechanism may benefit those importing under the Indian hot-rolled coil (HRC) quota, which last quarter approached the critical point of 90pc exhaustion. Often, when a quota is close to exhaustion, importers would prefer to wait until the quota reset, rather than take risk that the quota exhausts as they try to custom-clear and their material is subject to the full 25pc safeguard duty.

On the other hand, the pullback mechanism would not find much use with the "other countries" quota, which exhausts normally on the first day of reset, as seen towards the start of this month.

Italy's customs and monopolies agency is currently trialling the pullback option. The European Commission did not return a request for comment, so it is unclear if this measure will become available to all EU buyers.

By Carlo Da Cas

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