In a written statement submitted to the Committee on Ways and Means of the US House of Representatives, the Specialty Steel Industry of North America (SSINA) today encouraged stricter enforcement of the US regulations on trade with Cuba, particularly with respect to China. Over the past six years, China has invested heavily in Cuba's nickel development and, according to official trade data, China is now absorbing the overwhelming majority of Cuba's nickel production. Since the principal end use of nickel is the production of stainless steel and China is among the largest offshore suppliers of stainless steel to the United States, SSINA believes that stainless steel containing Cuban nickel has been imported into the US from China, in violation of the US trade embargo against Cuba.
While Cuba is the largest nickel producing country in the world, the Cuban Assets Control Regulations prohibit US manufacturers from sourcing nickel from Cuba. The embargo prohibits the importation of merchandise from third countries that is made or derived in whole or in part of any article which is the growth, produce or manufacture of Cuba. The embargo specifically covers the importation of nickel-bearing materials.
The US Department of Treasury's Office of Foreign Assets Control (OFAC), under the Cuban Assets Control Regulations, has the authority to require that importers of stainless steel certify the origin of the nickel in their products to confirm their compliance with the embargo. OFAC has utilized that authority on previous occasions when it suspected that imports of stainless steel might contain Cuban nickel.
Dr. Sunil Widge, SSINA's Chairman and Chief Technology Officer Emeritus of Carpenter Technology Corporation, says, "A failure to enforce the embargo not only undermines an important US foreign policy objective, it also places the domestic specialty metals industry at a distinct competitive disadvantage by allowing one of its biggest foreign competitors an opportunity to avail itself of the world's largest nickel reserves, while simultaneously denying the US industry the same access. As long as the embargo remains US law, it must be enforced, otherwise US stainless steel producers and producers of other nickel-bearing metals will remain disadvantaged by the failure to apply the embargo."
"The US previously entered into bilateral agreements with respect to stainless steel producers in Japan, Italy and France to ensure that imports from those producers did not contain Cuban nickel," says David A. Hartquist, SSINA's general counsel. "Under the agreements, imports of stainless steel from those countries were permitted subject to the furnishing of certification documents required by Cuban Assets Control Regulations," he explains.
"Despite its power to enforce compliance with the Cuban Assets Control Regulations, to the best of our knowledge, and to the detriment of the domestic industry, no enforcement action has been taken," says Hartquist.
Specialty Steel Industry of North America (SSINA) is a Washington, DC-based trade association representing virtually all continental specialty metals producers, which include high technology, high value stainless and other specialty alloy products.