India - Import Of Scrap Metal

November 2004

Following several incidents where explosions are reported as having been caused in India by unspent ammunition in containerized shipments of scrap the Indian authorities have imposed controls on the import of scrap metal.

The requirements are set out in amendments to the Handbook of Procedures issued by the Director General of Foreign Trade, India ("the Handbook") and can be summarised as follows: 

• For scrap which left port of origin before 25 October 2004 there will be a 100% physical inspection 

• For scrap which leaves port of origin after 25 October 2004 treatment depends on whether the scrap is in shredded form or unshredded, compressed or loose:

  • Scrap in shredded form is permitted at all ports without a pre-shipment inspection certificate

  • Scrap in unshredded, compressed or loose form must be accompanied by a pre-shipment inspection certificate and will only be accepted at the following ports:

Chennai JNPT Mumbai Tuticorin Pipava Cochin Kandla New Mangalore Vishakhapatnam Mundra Ennore Mormugao Paradip ICD Tughlakabad Kolkatta

Further details of these measures are set out in Public Notices 15 and 16 issued by the Director General of Foreign Trade, in Indian Customs circular No.56/2004-CUS and also as amendments to the Handbook.

The pre-shipment inspection certificate must be in the required form and must be issued by one of 23 authorised inspection and certification agencies in accordance with the amended Handbook. Details are contained in Appendix 28 to the Handbook.

The certification requirement applies irrespective of the place of shipment and nothwithstanding that the goods may not have originated from a country affected by war or rebellion. Even where the pre-shipment certification requirements have been complied with the authorities have the right to inspect 25% of goods in containers that contain scrap consigned to manufaturer-importers and 50% of goods in containers consigned to Indian traders. A minimum of one container from any shipment will, in any event, be subject to an inspection of 100% of its contents. 

The obligation to obtain the pre-shipment inspection certificate rests with the cargo owners. However it remains the shipowners' responsibility to ensure that every consignment of metal scrap in unshredded, compressed or loose form that is accepted for loading is accompanied by the relevant certificate. 

Owners of transhipping vessels that will be discharging such containers in India should ensure that the relevant inspection certificate is in their possession prior to discharge at any of the Indian ports listed above, that such containers are only opened at an intermediate port in the presence of a surveyor and a survey report exhibited to the inspection certificate to confirm that the goods are substantially the same as at the port of loading. This is particularly important as it is currently unclear whether the authorised certification agency would inspect the goods at an intermediate port on request from the carrier. Equally, cargo interests may be unaware of the carrier's intention to tranship or open containers at an intermediate port.

Failure to comply with these regulations will result in 100% inspection and penalties (yet to be specified).

Members will appreciate that there will inevitably be a risk of operational delays to shipments of this nature. Moreover, given the potentially very serious consequences of an incident of this type, Members would be advised to treat such shipments with extreme caution. 

With thanks to Crowe Boda for supplying this information.

Update - December 2004

Further information issued by the Chennai Port Trust indicates that the Indian Ministry of Shipping is considering whether to use blacklisting as a penalty for shipping lines that fail to comply with requirements.