On May 3, we learned that CCIC North America’s U.S. operations were being suspended for one month beginning on May 4. As a result of this measure, no inspections can be arranged or certificates issued during this period.
There is no doubt that this announcement surprised us all, and it is especially troublesome as CCIC currently is the only agency authorized by the Chinese Government to perform the pre-shipment inspections required to export scrap to China. Only U.S. operations are affected.
ISRI is working hard to gain as much information as possible and to provide guidance to our memberships in a timely way. The information provided in the alerts sent last week are available on the ISRI’s China web page, but here is a review:
- Beginning May 4, all shipments arriving from the United States will be required to be 100% opened for inspection, including shipments that are en route with CCIC certificates issued prior to and including May 3.
- Shipments containing “thermosetting plastic waste and scrap of plastics, metal scrap containing powdery substance, and waste paper carrying special paper that is hard to identify (such as silicone oil paper, wax-dipped paper, thermosensitive paper, moisture-proof paper, etc.), and waste paper mixed with suspected hazardous materials” will be subject to 100% inspections with “lab testing analysis.”
- Chinese port inspectors are directed to carefully review inspection and shipping documents to verify, among other information, the pre-shipment inspection certificate was issued before shipping, proper pre-shipment inspection was conducted, and all addresses and other information is accurate.
During this time, members can take the following into consideration, though these are entirely your business decision:
- First and foremost, the root cause of this situation appears to be in the manner in which CCIC issues the certificates after the shipping date. We believe that containers that received CCIC approval prior to May 4 but that have not yet obtained their certificate will encounter difficulty at port of entry. Exporters may wish to consider diverting cargoes already on the water to other countries.
- As noted above, all cargoes, including those that have received CCIC pre-shipment inspection certificates, will be required to be 100% opened for inspection. These inspections are "to strictly follow the national environmental protection standards," which are the strict quality standards with the 0.5% "carried waste" tolerance that went into effect on March 1. If, for any reason, you suspect that your shipment may not meet these requirements, please consider an alternative solution to that cargo arriving at a Chinese port as you may risk losing your AQSIQ license.
- These materials are still very much in demand by Chinese customers. ISRI believes that many of them have operations in other countries. We encourage members to work closely with customers to find solutions that will allow contracts to be fulfilled.
- We believe demand for American high-quality scrap remains strong worldwide. Considering this measure is compounding the already changing market landscape in China due to the import prohibitions and strict quality standards, there are significant business opportunities for U.S. exporters in other regions of the world worth exploring.
- In addition, ISRI has learned that as CCIC's U.S. operations also perform inspections in Mexico, those operations are also at a halt. CCIC's Canadian operations have been warned that they will face suspension if they process material originating from the United States. Please consider not using these markets as an alternative route to China.
- In the meantime, ISRI recommends not loading containers for China until this is resolved. ISRI was told shippers of any cargo that is rejected by Chinese customs authorities, especially during this time, could risk losing their AQSIQ export license. This is a huge, long-term risk for our members that we wish to avoid.
Given the severity of this situation, ISRI is working closely with BIR and other counterpart organizations around the world to track and address this issue. Although the announcement calls for a one-month suspension, it is our hope that through our aggressive outreach, a resolution can be found sooner. Senior officials from the Governments of China and the United States continue to have talks on a range of trade matters, and we have appealed to both governments to find a solution as quickly as possible. We are advocating that the Chinese Government fast track the approval of other pre-shipment inspection companies so that trade can resume.
If you have any questions, please contact Adina Renee Adler