Russia might extend tariff quota for ferrous scrap exports by six months but cut it to 600,000 t

MOSCOW. Nov 30 (Interfax) - Russia might extend the tariff quota for exports of ferrous metal scrap and waste to countries outside the Eurasian Economic Union (EAEU) until June 2023, while also reducing it to 600,000 tonnes from the 1.35 million tonnes in effect to the end of 2022 and lowering the in-quota export duty to 5% but not less than 5 euros/tonne, according to a resolution drafted by the Industry and Trade Ministry and posted on regulation.gov.ru.

The resolution was drafted to make certain that domestic steelmakers are supplied with the "strategic resource of ferrous metal scrap amid the unprecedented sanctions pressure from unfriendly countries," a memo attached to the document said.

The resolution calls for extending the tariff quota for exports of ferrous metals scrap and waste classified by foreign trade code 7204 TN VED EAES (with the exception of alloyed metal scrap classified by codes 7204 21 and 7204 29 TN VED EAES), while reducing the in-quota export duty rate to 5% but not less than 5 euros per tonne from the previous 5% but not less than 100 euros/tonne. The duty rate outside of the quota would be 5% but not less than 290 euros/tonne, the memo said.

Eighty percent of the quota will be distributed in proportion to indicators calculated for each foreign trade participant by adding the amounts of scrap and waste exported from January 1, 2021 to December 31, 2022, multiplied by coefficients for Russian regions. There are higher coefficients for Kamchatka Territory and Magadan Region to accommodate exports of ferrous scrap and waste obtained by salvaging sunken property, as well as other regions where redirecting shipments to the domestic market does not make logistical or economic sense, such as Krasnoyarsk Territory and Arkhangelsk, Kaliningrad, Murmansk and Sakhalin regions.

The Russian government extended the tariff quota of 1.35 million tonnes for ferrous scrap and waste exports until the end of 2022 in August. The in-quota export duty rate is 5% but not less than 100 euros/tonne, and the duty rate outside of the quota is 5% but not less than 290 euros/tonne. The quota was initially introduced from June 1 to July 31, 2022.

The memo said that while the quota was in place in 2022, ferrous scrap shipments to the domestic market from St. Petersburg surged 244%, "which had a positive impact on provision of a strategic resource to domestic metallurgical enterprises." Therefore, the coefficient for the Northwest Federal District has been reduced by the amount of ferrous scrap redirected to the domestic market in 2022.

The other 20% of the tariff quota will be distributed among market participants who supplied ferrous scrap and waste in 2021 and 2022 to systemic organizations of the Russian economy and/or legal entities that were founded in accordance with Russian law and are part of groups of systemic organizations, according to provisions of Article 9 of the federal law of July 26, 2006, No. 135-FZ On Protection of Competition, the memo said.