Washington-based trade group Specialty Steel Industry of North America (“SSINA”) marched up to Capitol Hill today to gripe to the House Ways and Means Committee about Cuban nickel being surreptitiously imported into the United States in violation of the U.S. embargo against Cuba after a detour to China. Granted section 515.204 of the Cuban Assets Control Regulations prohibits the importation into the United States of any merchandise that “is made or derived in whole or in part of any article which is the growth, produce or manufacture of Cuba.” Cuba is the ninth-largest producer of nickel in the world (not the largest, as SSINA erroneously claimed in its presentation). Most of it goes to China and some of it may well be coming back into the United States from China as stainless steel products or NiMH batteries.

SSINA faulted the Office of Foreign Assets Control (“OFAC”) for not adequately enforcing the nickel embargo against Cuba, and it suggested that OFAC should have China certify that stainless steel products imported to the United States do not contain Cuban-origin nickel — as if that were possible for Chinese manufacturers to certify and as if, even if it were possible, the Chinese would tell the truth.

The SSINA presentation also made a big deal of previous certification arrangements by the United States with some of our European allies, but it failed to tell the whole story about those arrangements. Yes, the U.S. did previously get France, Italy and others to agree to certify that stainless steel products contained no nickel from Cuba. But that was between 1981 and 1984. Since then, European Union Council Regulation 2271/96 would forbid E.U. exporters of stainless steel from making a certification that their products did not contain any Cuban-origin parts or materials.

SSINA accuses OFAC of neglecting its enforcement obligations without mentioning that OFAC has indeed penalized U.S. subsidiaries of Chinese companies investing in Cuban nickel production. In 2008, OFAC fined Minxia Non-Ferrous Metals, Inc. for just that. This seems a more sensible enforcement strategy than SSINA’s proposed certification scheme.

But, as you might have already suspected, notwithstanding SSINA’s huffing and puffing about the moral imperative behind the Cuba embargo, the trade group’s real interest has little to do with U.S. foreign policy and everything to do with Chinese competition. After all, the alleged competitive disadvantage of U.S. producers who can’t buy Cuban nickel could be solved tomorrow by lifting the embargo, something SSINA doesn’t even whisper as a possible solution to its issues. Rather, it seems the Cuba issue is a convenient excuse to look for ways to burden or ban Chinese imports of stainless steel, and lifting the embargo wouldn’t accomplish that.

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