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All steel sold into Northern Ireland that does not originate in Great Britain will now incur a 25pc duty because of the UK's withdrawal from the EU.
UK customs and tax authority HMRC confirmed the duty to Argus on 8 January, and traders were informed during a phone call with several government agencies. The duty has been imposed without warning.
Following Brexit, the UK has its own quarterly steel safeguard for January-June 2021, mirroring the European system. The quota started on 1 January, after the end of the Brexit transition period. Northern Ireland is not included in the quota, but all steel — unless it originates in the UK — will still incur 25pc safeguard duties.
At least one trader has already been charged 25pc duty for material that cleared into the Republic of Ireland, while others have been sending steel into Northern Ireland without realising they would have to make such a payment, highlighting the uncertainty and confusion surrounding the situation.
The duty will not be permanent for European material, HMRC told steel traders. But material from third countries, including Turkey, will be subject to the levy for at least six months.
Traders with material destined for Northern Ireland are contemplating re-routing it to other jurisdictions to avoid paying the duty.
The post-Brexit UK safeguard has got off to a bad start, as the system that shows how much of the quota has been used has not updated because of a "technical issue". This means traders and importers are unable to see whether any material they have cleared into the UK will face duties.
Some suppliers have consequently ceased quoting into the UK as they do not want to be liable for duties. Most markets have been surging recently on the back of strong apparent demand, rising costs and constrained supply — and this perception of a shortage could be heightened if the quota system problems continue for much longer.
Source: Argus media
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