Russian court lifts ‘unlawful’ scrap export ban

Russia – The Supreme Arbitration Court of Russia has deemed former prime minister Vladimir Putin’€™s ban on ferrous and non-ferrous scrap export to Far Eastern ports as unlawful. It has ordered the government of the Russian Federation to pay 2000 roubles (US$ 67) to the plaintiff, Primorsky Metallo Export.

Mr Putin signed the export ban on 13 February this year, before returning to Russia’€™s presidency in May. His objective was to help the only steel producer in the far east of the country, Amurmetal, to acquire more scrap by prohibiting exports of ferrous and non-ferrous metal except from Magadan, the largest sea port in northern Russia. Extreme weather conditions in the Sea of Okhotsk and the fact that the voyage is several times longer than alternative export routes make Magadan inefficient and unattractive to traders, so the decree effectively shut down Russian exports.

Primorsky Metallo Export holds the exclusive licence for Primorsk on the opposite side of the country, west of St Petersburg. Since the decree made Primorsk a prohibited port, the metals trader was unable to do business.

The industry hailed the court decision as ‘good news’ for those exporting scrap via this more practical route. Despite some concern as to whether the government will uphold the verdict, there is an encouraging precedent: in a similar case three years ago, a ban on scrap exports was fully lifted.