"Mandatory Submission of 'Mill Test Certificate' Needed to Block Unfair Steel Imports"

Spread of Circumvention Exports... Need to Secure Process Information
Legal Mandates in the US and India... Considering Mandatory Submission for Steel
Carbon Neutrality Is an Infrastructure Race... Urgent Need for Government Support

There has been a call for the government to mandate the submission of a Mill Test Certificate (MTC), which verifies manufacturing and process information, at the steel import stage. The MTC serves as a mechanism to preemptively block circumvention exports, where products are partially processed in a third country and then re-imported to evade anti-dumping regulations. In a market facing multiple risks such as oversupply, it is argued that such institutional measures are necessary to establish fair competition.

Jaeyoon Lee, Research Fellow at the Korea Institute for Industrial Economics and Trade, is giving a presentation at 'Steel Korea 2025' held on the 4th at the POSCO Center in Seoul. Photo by Seongah Shim

Jaeyoon Lee, Research Fellow and Head of the Carbon Neutral Industry Research Office at the Korea Institute for Industrial Economics and Trade, stated during a presentation titled "Policy Responses for Defending Against Unfair Imports in Korea" at 'Steel Korea 2025' held at the POSCO Center in Seoul on the 4th, "Circumvention exports and dumping are increasingly distorting the domestic market," and emphasized, "It is necessary to legislate the submission of MTCs to secure process information on steel products from the import stage." He added, "The United States, India, Canada, and Mexico have already made MTC submission a legal requirement at the import declaration stage," and explained, "Korea is also considering revising the Foreign Trade Act and its enforcement decree to designate steel as an item for mandatory submission."

The MTC contains key information that verifies the manufacturing history of steel, such as production processes, country of origin, and quality certifications. By requiring its submission, issues such as errors in HS codes (product classification numbers) or lack of producer information can be addressed. In practice, when anti-dumping regulations were imposed on Chinese products, some companies processed them in third countries like Vietnam to change the country of origin and then re-imported them. The MTC is evaluated as a tool that can identify and block such circumvention exports early in the import process.

Currently, there is no obligation to submit an MTC, so importers are only required to submit ingredient lists or certificates of origin at their discretion. If unfair imports are suspected, authorities such as the Korea Customs Service respond with post-entry investigations, but these are often limited in effectiveness as the products have already entered the market. Lee suggested, "It is necessary to prioritize items with a high import share, such as flat steel products and those subject to anti-dumping regulations," and added, "Since the steel industry advancement plan announced today includes this direction, relevant ministries will begin full-scale procedures, such as revising enforcement decrees, starting next year."

Previously, the Korea Institute for Industrial Economics and Trade identified five response tasks to prevent unfair imports in December of last year: ▲Enhancing the use of technical regulations ▲Responding to environmental regulations as non-tariff barriers ▲Utilizing government procurement agreements ▲Strengthening the effectiveness of anti-dumping prevention ▲Advancing import monitoring. Among these, Lee explained that the institutional improvement of circumvention dumping and steel import monitoring has been actively underway since this year.

In fact, in August, the Ministry of Economy and Finance revised the Enforcement Decree of the Customs Act to include anti-dumping evasion through "circumvention exports" via third countries as a regulated activity. In addition to the existing "minor modification acts," the new provision for "assembly or completion in a third country" was introduced to block cases where tariffs are avoided through simple assembly methods. Lee commented, "The United States and the European Union already have systems in place to investigate dumping via third countries," and added, "Korea is also revising relevant enforcement rules as of October this year, which will enable more effective control of cases where Chinese steel is re-imported via third countries such as Vietnam."

Lee stressed, "The steel industry is being pressured by multiple risks, including global oversupply, strengthened protectionism, and expanded climate regulations," and emphasized, "To ensure the success of carbon neutrality and industrial transformation, it is essential to control unfair imports and establish a fair competition order in the domestic market."

Yoonhee Lee, Executive Director at POSCO Research Institute, is giving a presentation at 'Steel Korea 2025' held on the 4th at POSCO Center in Seoul. Photo by Seongah Shim

At the forum, the need to strengthen industrial infrastructure to support the transition to carbon neutrality, alongside establishing a fair competition framework, was also raised. Yoonhee Lee, Executive Director at POSCO Research Institute, stated in a presentation on "Global Oversupply Status and Changes in the Trade Environment," "Carbon neutrality is not just a matter of technological competition, but an ecosystem-wide competition encompassing raw materials, processes, and energy infrastructure." She continued, "The government should not limit itself to supporting decarbonization technologies but should also establish a comprehensive support system, including power grids and hydrogen infrastructure, throughout the entire value chain." She further explained, "The global market is being restructured to give price premiums to eco-friendly products," and emphasized, "Industrial policy should not only focus on carbon reduction technologies but also foster 'green demand' in parallel."