G/LIC/Q/EU/1  
 
8 November 2016  
(16-6150) Page: 1/4 
Committee on Import Licensing  Original: English  
 
 EUROPEAN UNION – STEEL IMPORT LICENSI NG SYSTEM  
QUESTIONS FROM THE R USSIAN FEDERATION TO  THE EUROPEAN UNION  
CONCERNING PRIOR SUR VEILLANCE OF IMPORTS  OF CERTAIN IRON AND  
STEEL PRODUCTS ORIGI NATING IN CERTAIN TH IRD COUNTRIES  
The following notification, dated  3 Novem ber 2016, is being circulated at the request of the 
delegation of the Russian Federation . 
 
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1. The European Union notified the Committee on Import Licensing that on 28 April 2016 the 
European Commission introduced prior surveillanc e of imports of iron and steel products 
originating in all countries, except Norway, Iceland and Liechtenstein (see G/LIC/N/1/EU/8  and 
G/LIC/N/2/EU/8, 31 May 2016).1 According to the notification, the procedure constitutes automatic 
import licensing aimed at collecting advanced statistical information on the intentions to import.  
 
2. However, Russian exporters have informed us that they have faced some trade problems after 
these procedures came into force. Bilateral consultations with the European Union hav e not 
resolved our concerns over implementation of the measure.  
 
3. In order to clarify the purposes and functioning  of the measure we would request the European 
Union to respond to the following questions.  
 
1  PURPOSES OF THE STEE L IMPORT LICENSING S YSTEM  
4. Before turning to specific concerns about the measure and questions in light of specific 
provisions of the Agreement on Import Licensing Procedures, we would like to elaborate on the 
measure’s purposes. According to the notification by the European Union,  the administrative 
purpose is to “collect advanced statistical information on the intention to import”. It seems that 
this statement, if not being false, at least reflects the real purposes only partially.  
 
5. First, recital (1) of the preamble of the Reg ulation specifies that the measure is introduced in 
accordance with Article 10 of Regulation (EU) 2015/478 of 11 March 2015 on common rules for 
imports, which establishes framework for application of saf eguard measures in the 
European  Union.2 Moreover, we note that recital (26) of Regulation (EU) 2015/478 establishes the 
“sequential logic” of prior surveillance and provisional measures “in relation to the adoption of 
definitive safeguard measures” and states that “[w]here a delay in the imposition of measur es 
would cause damage… it is necessary to allow the Commission to adopt immediately  applicable 
provisional measures” (emphasis added).  
 
6. Second, the overall preamble depicts current threats to steel industry in the European Union 
caused by crisis in glob al steel market and points to several root causes of existing problems 
stating in recital (12) that “[r]apid and anticipated trade data is necessary to deal with the 
vulnerability of the EU steel market to sudden changes on world steel markets”.  
 
                                                
1 Commission Implementing Regulation (EU) 2016/670 of 28 April 2016 introducing prior Union 
surveillance of imports of certain iron and steel products originating in certain third c ountries.  
2 Regulation (EU) 2015/478 of 11March 2015 on common rules for imports (codification).  G/LIC/Q/EU/1  
 
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  7. Third,  in recital (21) the European Commission explains that the exemption for products 
originating in Norway, Iceland and Liechtenstein are granted because “[European Economic Area] 
Members do, in principle, not apply trade defence measures  in their mutual rela tions” (emphasis 
added).  
 
8. Fourth, it should be reminded that back in 2002, on 17 January, the European Communities 
introduced a similar prior surveillance system.3 Two months later, on 28 March 2002, the 
European Communities launched a safeguard investi gation introducing provisional measures on 
the same day based on the data collected through surveillance.4 
 
9. Given the aforementioned background, we note that for the sake of transparency the European 
Union’s notification might reflect the purposes of th e measure more accurately by mentioning , for 
example,  that the data collected through prior surveillance is designated for potential safeguard or 
other trade defense investigations  or at least for indicating the necessity of launching such 
investigations .  
 
10. This brings us to certain issues of concern for the Russian Federation related to specific 
provisions of the Agreement on Import Licensing Procedures.  
 
2  GENERAL QUESTIONS  
11. Please, clarify what is the added value of this measure when  official trade statistics  comes 
within a short time  lag (for example, in the Russian Federation it is available within 1.5 months )? 
 
12. According to Article 1 of the Regulation (EU) 2016/670 “[t]he release for  free circulation in the 
Union of certain iron and steel pro ducts listed in Annex I to this Regulation shall be subject to prior 
Union surveillance in accordance with Regulation (EU) 2015/478 and Regulation (EU) 2015/755. 
This applies to imports whose net weight exceeds 2 500 kg.”  In this case the questions are:  
 
12.1 Why the licensing measure  is applied only to imports  whose net weight exceeds 
2 500 kg? 
12.2 Please, clarify the ground s for choosing such weight threshold.  
 
13. According to paragraph 7(a) of Article 2 , “[w]ithout prejudice to possible changes in the import 
regulations in force or decisions taken in the framework of an agreement or the management of a 
quota: (a) the period of validity of the surveillance document is hereby fixed at 4 months …” 
 
13.1 What is the reason for limitation of  license  validity period ? 
 
14. According to Article 6 , “[t]his Regulation shall apply from the day following its publication in 
the Official Journal of the European Union until 15 May 2020”.  
 
14.1 Please, e xplain the reasons for choosing such period of application of the sy stem.  
14.2 Can the  measure be prolonged  beyond 15 May 2020?  
 
15. According to the paragraph 2 of Article 4, “the member States shall give… where relevant, the 
basis on which they have refused to grant a surveillance document”. However, this provision does 
not include an exhaustive list of such bases.  
 
15.1 Please, provide the exhaustive list of  grounds for denial of granting  license.  
 
3  REQUIREMENTS TO SUBM IT ORIGINAL DOCUMENT S 
16. We have been informed that the authorities of the European Union Member States  (for 
example , in Italy5) frequently require submission of original versions of contracts and other 
commercial documents (with genuine signatures and stamps) as a prerequisite for granting 
                                                
3 Commission Regulation (EC) 76/2002 of 17January 2002 introducing prior Community surveillance of 
imports of certain iron and steel products covered by the EC SC and EC Treaties originating in certain third 
countries.  
4 See G/SG/N/6/EEC/1, G/SG/N/7/EEC/1, G/SG/N/11/EEC/1 (27 March 2002) and G/SG/N/8/EEC/1, 
G/SG/N/10/EEC/1 (11 September 2002).  
5 Ministry of Economic Development of Italy, Protocol No. 12326 of 5 M ay 2016.  G/LIC/Q/EU/1  
 
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  surveillance document s. That does not correspond to Article 2(f) of  the Regulation (EU) 2016/670 , 
which states that “the importer shall also submit commercial evidence of the intention to import, 
such as a copy of the contract of sales or purchase or of the pro forma  invoice” . 
 
17. In light of the foregoing, we kindly ask  the European Union to provide answers to the following 
questions:  
 
17.1 What discretion is allowed to the authorities of the Member States in the course of 
implementation of the measure?  
17.2 How does the European Union ensure that within its territory th e implementation of 
the measure is carried out in a uniform manner?  
17.3 Please describe the universe of “commercial evidence” that may be requested by the 
authorities, in particular mentioning whether they are entitled to request original 
documents.  
17.4 How the requirements to provide original documents serve for the proper functioning 
of the licensing system, in particular, given that it is aimed at, as the European Union 
stated, “collect[ing] advanced statistical information on the intention to import”?  
17.5 Should the importer make a repeated application for surveillance document if the 
contract has been amended and such amendments have affected the information 
submitted in the first application?  
 
4  REQUIREMENTS TO SUBM IT DETAILED CUSTOMS CODES OF IMPORTE D PRODUCTS  
18. Article 2.6(c)(2) of the Regulation (EU) 2016/670 requires that the description of the imported 
goods should include their TARIC code.  We recall that Article 1.5 of the Agreement on Import 
Licensing Procedures establishes that only the infor mation that is “strictly necessary” for the 
proper functioning of the licensing system may be required upon application.  
 
19. We thus request the European Union to clarify the following:  
 
19.1 Does the European Union require the provision of information ab out customs 
classification of imported products at 10 -digit level? If it is not the case, please explain 
what is the required level of TARIC codes detail under Article 2.6(c)(2) of the 
Regulation.  
19.2 How the exporters can proceed with the application whe n the contract has been 
signed but the exact TARIC codes of the delivered products are not known yet?  
19.3 Why the information on 6 -digit level does not suffice for “collect[ing] advanced 
statistical information on the intention to import”?  
 
5  DISCARD OF NOR MAL COMMERCIAL PRACT ICE: OPTIONS FOR “+/ - 5%” ARE ONLY 
ALLOWED  
20. We point out that Article 3.1 of the Regulation (EU) 2016/670 limits price options by 5% and 
allows the quantity to exceed the declared figures by 5%. We note in this respect that Article 1 .8 
of the Agreement on Import Licensing Procedures states that “[l]icensed imports shall not be 
refused for minor variations in value, quantity or weight… consistent with normal commercial 
practice ” (emphasis added).  
 
21. We would therefore ask the Europea n Union to respond to the following questions:  
 
21.1 Why the European Union allows only “+/ - 5%” options, although shipments varying by 
“+/- 10%” from the contracted volumes constitute a normal commercial practice in 
steel trade?  
21.2 Why the European Unio n allows the total quantity of import to exceed the quantity  
given in the surveillance document by less than 5%?  
21.3 What happens when the price or quantity of products subject to release for free 
circulation in the European Union deviate for more than 5%  from the figures given in 
the surveillance document?  
21.4 If the release for free circulation in the European Union is not granted due to 
deviations in price or quantity, can the importer resubmit its application in order to 
obtain a rectified surveillanc e document? If the answer is positive, please clarify how 
long will it take to get a new license and what quantities should be declared in the G/LIC/Q/EU/1  
 
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  application – the whole amount of shipped products subject to customs clearance or 
the difference between the act ual amount shipped and the one given in the 
surveillance document issued previously?  
 
6  GRANTING IMPORT PERM ISSIONS WITHIN 5 DAY S 
22. Sometimes the delivery of steel from the Russian plants to the European consumers occupy 
not more than 2 -3 days, especially when automobile transport is used. Given this, we have been 
informed that in some cases the approval of requests for licenses takes longer than the period 
necessary to delivery of products.  
 
23. We note that Article 2.3 of the Regulation (EU) 2016/670 esta blishes a 5 -day period for 
issuance of the surveillance document.  
 
24. In this respect, we would be grateful if the European Union responded to the following 
questions:  
 
24.1 How does the European Union ensure that prior surveillance system does not creat e 
adverse effects on short -term deliveries of steel?  
24.2 What kind of circumstances (for example, difficulties of administrative or other nature) 
make impossible for the EU to shorten the 5 -day period of application approval and to 
establish, for example,  a 2 or 3 -day period, especially given that the measure’s stated 
objective is a mere “collect[ion] [of] advanced statistical information on the intention 
to import”?  
 
7  ADDITIONAL QUESTIONS  
25. What is the anticipated role of the measure in the initiation an d carrying out of trade defense 
investigations and, in particular, in imposition of preliminary safeguard measures?  
 
26. Does the European Union share the information collected through prior surveillance procedures 
with domestic metallurgical companies, fo r example, in order to help them prepare their 
applications for trade defense investigations or for whatever other reasons?  
 
8  CONCLUSION  
27. We are looking forward to getting written responses to the questions provided in this 
document. We also invite the E uropean Union to continue bilateral engagement on this issue.  
 
 
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