Trade measures and the commodity trader

Iron and steel: the import ban and the third-country processing rule

For Lugano no measure has had a greater effect than the ban on Russian iron and steel. The European Union adopted it on 15 March 2022 in its fourth package, and Switzerland followed in the same month.¹ Article 14a of the Ukraine Ordinance prohibits the import, transport and purchase of the iron and steel products listed in Annex 17 if they originate in or are exported from the Russian Federation. It also prohibits the provision of technical assistance, brokering services, financing and insurance or reinsurance connected with these activities.² The prohibition of purchase is the decisive element for a merchanting economy. A Lugano trader that buys Russian billets in Novorossiysk and sells them to a mill in Turkey never brings the goods into Switzerland, so that an import ban alone would not touch the transaction. The purchase ban and the ban on brokering and financing reach the trader in Lugano regardless of where the steel travels, in the same way as the corresponding European provision reaches a trader in Milan.³

The second stage took effect in 2023. The European Union's eighth package of October 2022 prohibited, from 30 September 2023, the import of iron and steel products processed in a third country if they incorporate Russian iron and steel inputs. The twelfth package of December 2023 restated the rule and set later dates for certain semifinished products, which extend to 1 October 2028.⁴ Switzerland adopted the rule with effect from the same date. Since 16 August 2023 an importer of processed steel products from a third country outside the European Economic Area and the United Kingdom must present, together with the customs declaration, evidence of the origin of the inputs used in the processing.⁵ The Swiss text exempts goods that have been lawfully imported into the European Union under the quotas that the Union allows for certain Russian semi-finished products. That exemption reflects the dependence of some European rolling mills on Russian slabs, which the Union has permitted to enter under declining quotas during a transitional period.⁶

For a Lugano steel trader the processing rule changed the documentary practice of the whole trade. A cargo of Turkish reinforcing bar, Indian hot-rolled coil or Egyptian wire rod destined for Italy or Switzerland must now be accompanied by evidence of the origin of the iron and steel inputs. The first document that SECO names for that purpose is the mill test certificate, which states the producing plant and the country in which the steel was melted. The buyer will ask for it, the Italian customs will check it, and the bank that finances the transaction under a letter of credit will often make it a required document. The mill test certificate has thus become a sanctions document as well as a quality document. Its reliability depends on the integrity of the producing mill, and traders have learnt to treat certificates from mills that buy Russian slabs or billets with particular care.⁷

Notes

1. Franchini, swissinfo.ch, 29 March 2022 (above) (EU ban of 15 March 2022); see the chronology in the previous section. ↩
2. Ukraine Ordinance, Art. 14a, consolidated version as at 13 December 2025, as summarized from https://lexaris.de/book/version/documentflat/head/10519685 (import, transport and purchase of products listed in Annex 17; technical assistance, brokering, financing, insurance and reinsurance). ↩
3. Regulation (EU) No 833/2014, Art. 3g para. 1 lit. b and d, as inserted by Council Regulation (EU) 2022/428 of 15 March 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/? uri=CELEX:32022R0428 (purchase of iron and steel products "which are located or which originated in Russia"; technical assistance, brokering, financing, insurance and reinsurance). ↩
4. Council Regulation (EU) 2022/1904 of 6 October 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32022R1904 (new Art. 3g para. 1 lit. d of Regulation 833/2014, applicable from 30 September 2023, for CN codes 7207 11 and 7207 12 10 from 1 April 2024 and 1 October 2024); Council Regulation (EU) 2023/2878 of 18 December 2023, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/? uri=CELEX:32023R2878 (prohibition "as from 30 September 2023" of iron and steel products "processed in a third country incorporating iron and steel products originating in Russia"; for CN 7207 11 from 1 April 2024 and for CN 7207 12 10 and 7224 90 from 1 October 2028). ↩
5. Ukraine Ordinance, Art. 14a, version as at 13 December 2025 (above) (prohibition from 30 September 2023; documentary evidence of origin for imports from third countries other than the EEA and the United Kingdom, inserted on 16 August 2023). ↩
6. Ukraine Ordinance, Art. 14a (above) (exception for goods imported into the EU under import quotas); on the EU quotas for Russian semi-finished products, fixed in tonnes for successive periods up to 2028, see Regulation (EU) No 833/2014, Art. 3g, as amended by Regulation (EU) 2023/2878 (above). ↩
7. SECO, Auslegungshilfe Sanktionsmassnahmen, 30 June 2026, section 2.4.4, https://www.seco.admin.ch/dam/de/sd-web/Vjbtwu26yOgQ/Auslegungshilfe%20f%C3%BCr %20Sanktionsmassnahmen.pdf ("Das Werkprüfzertifikat (mill test certificate), das den Namen des Betriebs, in dem die Herstellung erfolgt, den Namen des Landes, in dem die Schmelze stattfand", followed by invoices, delivery notes, quality certificates, production records, export customs documents and correspondence); Council Regulation (EU) 2023/2878 of 18 December 2023, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32023R2878, Art. 3g (importers to provide evidence of the country of origin of the inputs unless the product is imported from a partner country). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.