CBAM Regulation and Chapter 73 – A Closer Look at the Affected Goods

On the LinkedIn timeline, I currently read a lot about CBAM, but not many comment specifically on Annex I of the regulation, where the goods affected by CBAM are listed. Let's take a closer look, particularly at the goods in Chapter 73 - because not all steel products are affected.

Which steel products in Chapter 73 are affected – and which are not?

The requirements of the CBAM Regulation (Carbon Border Adjustment Mechanism) compel companies to engage intensively with the customs classification of their goods. The following headings in Chapter 73 are affected:

Particularly screws, bolts, nuts, sleeper screws, screwhooks, rivets, split pins, wedges, and washers (heading 7318) and springs (heading 7320) are often in focus.

The precise distinction between these headings is essential, as only goods from heading 7318 are CBAM-relevant. Nevertheless, confusions frequently arise in practice.

In this article, we highlight typical challenges and provide practical examples for clear differentiation.

Chapter 73: What is the difference between heading 7318 and 7320?

• Heading 7318: Screws, bolts, nuts, washers, and similar products of iron or steel. These products primarily serve as fasteners, mechanically securing or screwing.

Examples: Machine screws, wood screws, hexagon screws, countersunk screws.

• Heading 7320: Springs and leaf springs, also of iron or steel. These products are mainly used for elastic applications such as damping or energy return.

Examples: Compression springs, tension springs, leaf springs for vehicles.

Essential Distinction: the primary function of the product. Screws connect and fasten, whereas springs absorb or release movement energy.

A mousetrap in heading 7320?

This may seem trivial, but it is important to mention here that goods composed of various materials and components can also be classified according to General Rule 3b of the Harmonized System based on their essential character into one heading or another.

A striking example is a mousetrap, which was definitively classified by the Danish customs authorities (see BTI DKBTI0245479) under heading 7320 as “spring goods.” This mousetrap consists of a tube, a jaw, a collar, support feet (plastic), springs, and a safety pin made of steel.

The classification under heading 7320 was done because of the steel spring, which is crucial for the mousetrap's function.

The explanatory notes to heading 7320 (HS) RZ 02.0 explain what springs are:

Springs are made from sheets, wire, or rods with elastic properties in such a way that they return to their original state even after sometimes considerable stress, without losing their resilience.

Unclear naming conventions concerning product names in ERP systems

In my work as a customs law consultant, I have repeatedly noticed that many companies do not use clear naming conventions for their goods descriptions. This not only causes raised eyebrows among customs authorities – even within a company, different departments such as logistics often do not know their products as well as the developers.

It is worth considering how product names can be improved.

Common synonyms and misleading names

Here are some terms that regularly cause confusion:

Heading 7318 – Screws & Fasteners:

• “Machine screws”

• “Bolts with special heads”

• “Fastening elements of steel”

Heading 7320 – Springs:

• “Coil springs”

• “Elastic push rods”

• “Tension springs”

Many of these terms are unspecific and require technical specifications for correct classification.

Practical examples for classification

Spring-loaded screws:

Screws combined with a spring often lead to confusion. The main purpose decides:

→ If the screw is used as a fastener, it belongs under Heading 7318.

→ If its function lies in suspension or return, it belongs under Heading 7320.

Screw springs:

These are often used in industrial machines, such as presses. Despite the “screw” form, they count as Heading 7320 because their primary function is in the spring action.

Spring bolts for rail connections:

These products, used in the rail industry for track fastening, generally belong to Heading 7318, as the fastening function predominates.

Typical practical errors

Incorrect classification in combined products:

For example, “tension screws with springs” are often generally classified as screws (7318), although the spring action is the main function.

Incomplete product descriptions:

Often, essential details like material, dimensions, or function are missing in supplier descriptions or internal databases. This complicates classification.

Lack of knowledge in procurement:

Without solid training, buyers cannot assess which products are CBAM-relevant and which are not.

How companies can avoid mistakes

Provide technical documentation:

Ensure product datasheets include and are available with technical details such as main function, dimensions, and materials.

Intensify cooperation with customs experts:

Regular training and aligning with requirements minimize misinterpretations.

Clear communication with suppliers:

Suppliers should be made aware of CBAM-relevant details when providing product descriptions.

Bonus: Thomas' experiences and resulting tips in the framework of an initial CBAM report (Q4, 2023)

In an initial information gathering at the beginning of 2024, it quickly became apparent that some companies do not maintain their master data sufficiently. For instance, steel springs appeared on individual, aggregated supplier lists alongside screws, but these springs are classified under heading 7320 and are not listed in Annex I and are therefore not subject to the CBAM Regulation.

Since the CBAM regulation targets CO₂-intensive goods from third countries, accurate information about the country of origin is also crucial. Here, it has also been shown that after goods receipt, this information in ERP systems is often not maintained accurately or timely. Typically, these foreign trade data are not visible on individual commercial documents.

A good freight forwarder pays off: When companies bundle shipments and always have them cleared by the same forwarding agent, the agent can provide the customs clearance data for the desired quarter within a reasonable timeframe. Specifically, the weight data of the customs clearances match exactly the data received by the customs authorities of the EU member states in their customs clearance systems. The weight data maintained in ERP systems, which may be calculated upwards, do not necessarily match those of the forwarders.

The fine print can be decisive and is meant positively here: Article 2, paragraph 3(a) exempts importers from the obligation to record steel screws worth less than 150 EUR per shipment (!). Concretely, this means that shipments of screws worth less than 150 EUR can be disregarded in the customs clearance data. The customs clearance data should be broken down by the forwarder into individual headings. Individual customs clearances often also represent individual shipments. If a shipment contains steel screws (heading 7318) worth less than 150 EUR, importers do not need to include these in their CBAM reports. Such shipments can already be excluded during information gathering.

Companies affected by CBAM should be aware that it is not sufficient to entrust a single person within the company with implementing the CBAM Regulation. It is advisable to establish a coordination center that collects the necessary parameters and compiles and submits the CBAM report. It is worth contacting suppliers who sell CBAM-relevant products early on.

An initial comparison provided clarity: Customers and their suppliers should first clarify which items they bought and sold in a specific quarter at which value and weight, with which customs tariff numbers, and from which countries of origin. Now the question arises about the CO₂ emissions, broken down by individual articles.

For the future, it is important that contracts between customers and suppliers are adjusted accordingly. The individuals responsible for gathering information and preparing the CBAM report in the company and with the suppliers must be designated and known.

Conclusion: Careful examination prevents cost traps

The distinction between headings 7318 and 7320 is more than a technical question – it influences CBAM reporting and compliance with EU regulations. Those who adapt internal processes and data systems early save costs, prevent over-compliance, and minimize risks.

How does traideGo classify a screw spring?

1. Product Understanding:

• Product: Screw spring according to DIN 2098

• Material: Steel

• Purpose: Mechanical applications, where suspension or return force is required

• Additional Characteristics: Surface blank, outer diameter 4 mm to 17 mm, wire diameter 0.63 mm to 4 mm, length 9.6 mm to 170 mm, number of coils 1.5 to 7.5, compression spring

2. Analysis of tariff classification:

• Product features: The screw spring is made of steel and serves as a compression spring. It has specific measurements and a blank surface.

• Relevant headings and subheadings of the nomenclature:

• Relevant Notes and Explanations:

3. Tariff number/s:

• [73202081]: Compression springs of iron or steel (excl. frustoconical springs, clock springs, springs for sticks and handles of umbrellas or parasols, and shock absorbers of section 17)

4. Justification:

• Legal justification: The classification is done according to GRI 1 and 6, as well as the notes to Section XV and Chapter 73. The specific characteristics of the screw spring (material: steel, function: compression spring) and the dimensions match the criteria for subheading [73202081].

• Exclusion of alternative headings: Other subheadings such as [73202085] (tension springs) or [73209090] (other springs) are excluded since it is specifically a compression spring.

5. Request for additional information:

• Not required: The provided information is sufficient for a clear classification.

6. Summary:

• The screw spring according to DIN 2098 made of steel, used as a compression spring, is classified under the tariff number [73202081] of the Combined Nomenclature.