SMMT statement from Mike Hawes, Chief Executive:
We condemn the Russian state’s aggression against Ukraine. The UK Automotive industry supports the actions of the international community to bring an end to the conflict through all diplomatic, financial and trading mechanisms as well as the provision of specific support to the people of Ukraine. Inevitably, there will be an impact on the sector and SMMT will support its members in their efforts both to protect their staff who may be affected as well as with the pressures it will put on their business.
In response to the crisis, SMMT will provide regular updates to members, with intelligence on the UK and international responses, including the latest sanctions imposed by UK and global governments, and assessments on the impact on automotive businesses and their staff.
We are working closely with UK Government and sister associations, to provide guidance and information to assist members with their ongoing handling of the crisis and impact on business, and to feedback industry intelligence to help Government understand the impact on the sector.
If you have questions or feedback, please email them to Andrew Harries or Alessandro Marongiu at policy@smmt.co.uk
SMMT Activity
SMMT is working closely with UK Government Departments (BEIS, FCDO, DIT, Cabinet Office) to obtain the latest information and to provide feedback on how the crisis is impacting UK Automotive. We are also engaging with other major business representative bodies in the UK and EU, to share intelligence.
We are convening a member taskforce and hosting a series of webinars, to provide updates to members and answer questions. We will provide further updates on these plans in due course.
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Ukraine Crisis – update 4 August 2022
Ukraine is well known for its automotive manufacturing capabilities, and it is possible that those seeking refuge in the UK will have skills that are of value to the UK automotive manufacturing sector.
If you are interested in seeking employment in this sector you will find the organisations and information in the links below useful. People entering automotive manufacturing in the UK frequently do so by using employment agencies and links to these agencies are provided where car and component manufacturers use these organisations for recruitment as well as links to those manufacturers that recruit directly:
https://recruitmentuk.caresoftglobal.com
https://www.contechs.org.uk/technicalrecruitment
https://www.contechs.org.uk/designandengineering
https://www.broadgatesearch.com/
https://jobs.guidantglobal.com/clients/toyota
Please get directly in touch via these links and please let the organisations know that you found them through this page.
Ukraine Crisis – update 1 June 2022
EU agrees oil ban in sixth package of sanctions on Russia
The EU reached a compromise agreement on banning most imports of oil from Russia by the end of the year. The ban will see an end to all imports of Russian oil via sea, with pipeline oil to be phased out at a later date – due to the needs of Hungary and Czech Republic.
The sixth set of sanctions to be issued by the EU on Russia covers:
- Russian seaborne oil to be banned by the end of the year, with a temporary exemption for pipeline oil (two-thirds of Russian oil arrives by sea)
- Pledges by Poland and Germany to stop importing pipeline oil by the end of this year will raise coverage of the ban to 90% of Russian imports
- Russia’s largest bank, Sberbank, to be cut off from the Swift payment system
- Three more Russian state-owned broadcasters banned
- More restrictions on “individuals responsible for war crimes in Ukraine”
Full details of the Sixth Sanctions Package are available here: https://www.consilium.europa.eu/en/press/press-releases/2022/05/31/european-council-conclusions-on-ukraine-30-may-2022/.
These sanctions were confirmed in a statement from President von der Leyen at the joint press conference with President Michel following the special meeting of the European Council of 30 May 2022 – https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_3382
Ukraine Crisis – update 9 May 2022
Palladium and Platinum included in latest round of UK sanctions on Russia and Belarus
The UK has announced a further package of sanctions on Russia and Belarus, targeting £1.7 billion worth of trade, including import tariffs and export bans. The new import tariffs will cover £1.4 billion worth of goods – including 35% tariffs on platinum and palladium. Russia is one of the leading platinum and palladium producing countries and is highly dependent on the UK for exports of platinum and palladium products.
Read the full release here: https://www.gov.uk/government/news/uk-punishes-putin-with-new-round-of-sanctions-on-17-billion-of-goods
Meanwhile, the planned export bans intend to hit more than £250 million worth of goods in sectors of the Russian economy most dependent on UK goods, targeting key materials such as chemicals, plastics, rubber, and machinery.
This is the third wave of trade sanctions announced by the UK government and, excluding gold and energy, will bring the proportion of goods imports from Russia hit by restrictions to more than 96 percent, with more than 60 percent of goods exports to Russia under whole or partial restrictions.
Last week, the International Trade Secretary hosted international trade ministers and officials from 23 countries, including the Ukrainian first Deputy Prime Minister, to discuss how best to provide trade and economic support to Ukraine. She also signed a formal exchange of letters to liberalise all tariffs on imports from Ukraine under the UK-Ukraine Free Trade Agreement.
N.B. Legislation will be laid in due course to implement these measures. These estimates assume the full value of trade within a commodity code is subject to a restriction. The true value may be subject to licensing and exemptions. The UK Government is encouraging all importers that use Russian imports to source alternative supplies. As with all sanctions, these measures will be kept under review.
Ukraine Crisis – update 26 April 2022
UK announces new trade measures to support Ukraine
On Monday 25 April, the UK announced new measures to support Ukraine in its conflict with Russia by removing all tariffs covered by the existing UK-Ukraine trade deal, as well as introducing further sanctions on Russia.
- All tariffs on goods imported from Ukraine will now be reduced to zero and all quotas will be removed under the free trade agreement.
- In addition, the UK has announced an export ban on products and technology, including interception and monitoring equipment.
Last week (21 April) the UK also announced it was bolstering its current tariff sanctions against Russia, by increasing the list of products facing import bans and increased tariffs, including applying new import bans to silver and wood products and increasing tariffs by 35 percentage points on products such as diamonds and rubber.
Click the link for the updated list (including commodity codes) for imports requiring additional duties: Further Russian and Belarusian imports requiring additional duties: 21 April 2022
Ukraine Crisis – update 14 April 2022
UK Government publishes legislation banning imports of steel and iron, plus export ban on luxury goods
The UK government has published secondary legislation – SI 2022/452 – The Russia (Sanctions) (EU Exit) (Amendment) (No. 8) Regulations 2022 – which bans the import of iron and steel products from Russia, as well as the export of quantum technologies, advanced materials and luxury goods to Russia. These Regulations come into force on 5.00 p.m. on 14th April 2022.
The relevant descriptions and commodity codes are published in the Schedule.
Schedule 3B provides the commodity codes for the iron and steel products banned from import.
Schedule 3A Part 2B 18 provides details, including commodity codes, on vehicles (and spare parts) included under the luxury goods export ban:
18. Vehicles, except ambulances, for the transport of persons on earth, air or sea, teleferics, chairlifts, ski-draglines, traction mechanisms for funiculars and motorbikes, as well as their accessories and spare parts, meaning any thing which falls within the commodity codes set out in the following table, provided that the sales price exceeds—
(a)£42,000 per vehicle,
(b)£4,200 per teleferic, chairlift, ski-dragline, traction mechanism for funiculars or motorbike, or
(c)£420 per accessory or spare part,
as applicable—Businesses impacted by these import and export bans can contact the UK Export Support Service with any queries – use the dedicated online service or call 0300 303 8955.
SMMT will provide further updates and guidance when available.
Ukraine Crisis – update 8 April 2022
EU agrees fifth package of restrictive measures against Russia
The fifth package of measures adopted by the EU contains the following six elements:
1) Coal ban
- An import ban on all forms of Russian coal. This affects one fourth of all Russian coal exports, amounting to around €8 billion loss of revenue per year for Russia.
2) Financial measures
- A full transaction ban and asset freeze on four Russian banks, which are now totally cut off from the markets. They represent 23% of market share in the Russian banking sector and will, therefore, further weaken Russia’s financial system.
- A prohibition on providing high-value crypto-asset services to Russia. This will contribute to closing potential loopholes.
- A prohibition on providing advice on trusts to wealthy Russians, making it more difficult for them to store their wealth in the EU.
3) Transport
- A full ban on Russian and Belarusian freight road operators working in the EU. Certain exemptions will cover essentials, such as agricultural and food products, humanitarian aid as well as energy.
- An entry ban on Russian-flagged vessels to EU ports. Exemptions apply for medical, food, energy, and humanitarian purposes, amongst others.
4) Targeted export bans
- Further targeted export bans – worth €10 billion – in areas in which Russia is vulnerable due to its high dependency on EU supplies. This includes, for example, quantum computing, advanced semiconductors, sensitive machinery, transportation and chemicals. It also includes specialist catalysts for use in the refinery industry. This will continue to degrade Russia’s technological base and industrial capacity.
- Adding jet fuel and fuel additives, which may be used by the Russian army, to the existing export ban.
5) Extending import bans
- Additional import bans – worth €5.5 billion – including cement, rubber products, wood, spirits (including vodka), liquor, high-end seafood (including caviar), and an anti-circumvention measure against potash imports from Belarus. These measures will also help to close loopholes between Russia and Belarus.
6) Excluding Russia from public contracts and European money; legal clarifications and enforcement
- Full prohibition on the participation of Russian nationals and entities in procurement contracts in the EU. Limited exceptions may be granted by the competent authorities where there is no viable alternative.
- Restriction on financial and non-financial support to Russian publicly owned or controlled entities under EU, Euratom and Member State programmes. For instance, further to measures previously announced in research and education, the Commission will terminate participation in all ongoing grant agreements to Russian public bodies or related entities, and suspend all related payments, under Horizon 2020 and Horizon Europe, Euratom, and Erasmus+. No new contracts or agreements with Russian public bodies or related entities will be concluded under these programmes.
- Addressing various overlaps between export restrictions on dual-use items and advanced technologies and other provisions.
- Extending to all official EU currencies the prohibitions on the export of banknotes and on the sale of transferrable securities.
Ukraine Crisis – update 7 April 2022
Latest UK sanctions target banks, coal, oil, iron, steel and further 8 oligarchs
On Wednesday 6 April, the UK announced further sanctions on Russia’s economy, industries and targeted individuals. Key sanctions announced include:
- asset freezes against Sberbank and Credit Bank of Moscow. Sberbank is Russia’s largest bank and this freeze is being taken in co-ordination with the US
- an outright ban on all new outward investment to Russia. In 2020 UK investment in Russia was worth over £11 billion.
- by the end of 2022, the UK will end all dependency on Russian coal and oil, and end imports of gas as soon as possible thereafter. From next week, the export of key o refining equipment and catalysts will also be banned, degrading Russia’s ability to produce and export oil – targeting not only the industry’s finances but its capabilities as a whole
- action against key Russian strategic industries and state-owned enterprises. This includes a ban on imports of iron and steel products, a key source of revenue.
- Russia’s military ambitions are also being thwarted by new restrictions on its ability to acquire the UK’s world-renowned quantum and advanced material technologies
UK sanctions also target a further eight oligarchs active in the abovementioned industries. They include:
- Viatcheslav (Moshe) Kantor, the largest shareholder of fertilizer company Acron with vital strategic significance for the Russian government
- Andrey Guryev, known close associate of Vladimir Putin and founder of PhosAgro – a vital strategic company that produces fertilizers
- Sergey Kogogin, director of Kamaz – manufacturer of trucks and buses, including for the Russian military
- Sergey Sergeyevich Ivanov, President of the world’s largest diamond producer Alrosa, which the UK also sanctioned
- Leonid Mikhelson, the founder, and CEO of leading Russian natural gas producer Novatek, with a net worth of £18billion
- Andrey Akimov, the CEO of Russia’s third largest bank Gazprombank
- Aleksander Dyukov, the CEO of Russia’s third largest and majority state-owned oil producer GazpromNeft
- Boris Borisovich Rotenberg, son of the co-owner of Russia’s largest gas pipeline producer SGM. The Rotenberg family are known for their close connections to Putin and a number of them have already been sanctioned
UK launches review of steel tariff quotas for imports from Russia and Belarus
The Trade Remedies Authority (TRA) has initiated a Tariff Rate Quota (TRQ) review of steel imports that are part of the UK’s safeguard trade remedy measures. The TRA will assess whether the tariff rate quotas for Russia and Belarus should be re-allocated to avoid a potential shortage of steel in the UK.
Read the full press release here: https://www.gov.uk/government/news/uk-launches-review-of-steel-tariff-quotas-for-imports-from-russia-and-belarus
Points to note:
- According to the press release, the review should not concern category 4 (hot dipped galvanised steel), which is the steel gradient most used by automotive that is currently subject to a tariff-rate-quota under the current safeguard. However, both category 1 and category 13 can have automotive applications.
- The EU has already adopted the decision to redistribute the quotas on imports of steel from Russia and Belarus through its own safeguard regulations.
G7 issues joint statement
G7 foreign ministers and the High Representative of the European Union issued a joint statement on Russia and Ukraine following a meeting at NATO (7 April). The full statement is available here:
Ukraine Crisis – update 24 March 2022
UK announces further 65 sanctions against Russia
Foreign Secretary Liz Truss has announced 65 new Russian sanctions today (Thursday 24 March) against a range of key strategic industries and individuals.
Today’s sanctions target key industries supporting Russia’s illegal invasion, including Russian Railways and defence company Kronshtadt, the main producer of Russian drones. The Wagner Group – the organisation Russian mercenaries reportedly tasked with assassinating President Zelenskyy – has also been sanctioned.
Six more banks are targeted, including Alfa Bank whose co-founders include previously sanctioned oligarchs Mikhail Fridman, Petr Aven and German Khan. The world’s largest diamond producer Alrosa is also sanctioned.
Individuals sanctioned include the billionaire oil tycoon Eugene Shvidler, founder of Tinkoff bank Oleg Tinkov, Herman Gref, the CEO of Russia’s largest bank Sberbank, and Polina Kovaleva, Foreign Minister Lavrov’s stepdaughter. Galina Danilchenko, who was installed by Russia as the ‘mayor’ of Melitopol is also sanctioned – the first time an individual has been sanctioned for collaboration with Russian forces currently in Ukraine.
Ukraine Crisis – update 10 March 2022
UK, US and EU to target Russian oil and gas
Following this week’s announcement by US and UK governments, the Business Secretary has set out more detail on how the UK will phase out the import of Russian oil and oil products by the end of 2022. This includes the establishing of a new joint taskforce with industry to work on an orderly transition. The US expects to cut imports immediately.
Read the press release here: https://www.gov.uk/government/news/uk-to-phase-out-russian-oil-imports
Read the Business Secretary’s statement to Parliament here: https://www.gov.uk/government/speeches/statement-on-the-phasing-out-of-russian-oil-imports
Ukraine Crisis – update 3 March 2022
Latest UK and International Sanctions
Following Russia’s illegal invasion of Ukraine, the UK, EU and other international governments have been coordinating on a wide range of sanctions against Russia. Below are links to information on the latest sanctions from key governments.
UK
The UK government has announced sanctions including:
- the freezing of assets from all of Russia’s major banks
- targeted sanctions on Russian individuals (including President Putin, Russian MPs who voted in favour of military action and a number of Russian
- businessmen associated with President Putin’s inner sanctum)
- export controls on hi-tech and dual-use good/services
- a ban on all Aeroflot flights in UK air space
- a ban on finance and trade with the separatist regions of Donetsk and Luhansk similar to that already in place for the region of Crimea
The UK Government has published the legislation and full list of export controls, including for dual-use goods: The Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2022 (legislation.gov.uk)
For the latest consolidated list of UK sanctions visit GOV.UK ‘UK Sanctions against Russia’
Following the UK government announcing sanctions, guidance on the UK’s sanctions regime relating to Russia has been published. The guidance includes information on the suspensions of dual use goods for those who use export licenses.
Furthermore:
- the FCDO now advises against all travel to Russia and Ukraine.
- the Home Office has published guidance on ‘support for family members of British nationals in Ukraine, and Ukrainian nationals in Ukraine and the UK’.
EU
The EU has set out a similar range of sanctions, targeted at Russia’s economy and key individuals.
Updates on EU sanctions are available here:
EU Council website: https://ec.europa.eu/commission/presscorner/detail/en/fs_22_1402
European Commission website: https://ec.europa.eu/info/strategy/priorities-2019-2024/stronger-europe-world/eu-solidarity-ukraine_enUS
The latest updates from the US Government are available from the US Department of the Treasury website:
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220225_33
https://home.treasury.gov/news/press-releases/jy0608
https://home.treasury.gov/news/press-releases/jy0607Other countries
Canada – https://laws.justice.gc.ca/eng/regulations/SOR-2014-58/FullText.html
Other Updates
Below are highlights of the latest updates on other Government and industry responses to the ongoing crisis.
- UK Transport Secretary, Grant Shapps MP, has written to all UK ports asking them not to provide access to any Russian flagged, registered, owned, controlled, chartered or operated vessels. The enacting legislation will follow shortly.
- Global shipping company, A.P. Moller – Maersk, has announced that new Maersk bookings within ocean, air and intercontinental rail to and from Russia will be temporarily suspended, with the exception of foodstuffs, medical and humanitarian supplies (bar dual-use items).
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UK Government Support and Contacts
Below are links and contact details where businesses can obtain additional information:
- Export Support Service – if you have a question about trading with Ukraine or Russia use the dedicated online service or call 0300 303 8955.
- The Business Partnership team at the Cabinet Office – BusinessPartnerships@CabinetOffice.gov.uk – on sanctions and impact of these on UK businesses.
- National Cyber Security Centre (NCSC) – enquiries@ncsc.gov.uk – for guidance and support on cyber security and resilience.
- Embassy support for British Nationals in Ukraine or Russia, refer to the linked embassy pages for more information – Ukraine and Russia.
Cyber Security
In response to the events in Ukraine, the National Cyber Security Centre (NCSC) has published information to help businesses to improve their cyber resilience during periods of heightened threat. The NCSC has set out a number of critical actions businesses can take to protect themselves quickly, as well as support long-term planning.
Below are links to relevant NCSC guidance to help your business’s cyber resilience:
- Advice for board’s on how to manage cyber risk
- Advice relating to current tensions
- Advice for SMEs
- Advice to tackle ransomware
If you have any questions, please contact enquiries@ncsc.gov.uk who will be happy to assist.
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Latest Market Intelligence
Below are some of the latest key economic developments associated to the ongoing Ukraine crisis, which will be updated as necessary
Global Automotive Forecasts
The unfolding situation in Ukraine has given rise to questions concerning the likely impact on the automotive industry.
- LMC & J.D. Power have cut their global sales forecast by 400,000 to 85.8 million units, also due to rising oil and aluminium prices that could discourage buyers from spending on new cars and trucks.
- However, the volume of global light-vehicle sales is expected to rise 5% in 2022.
Commodities and Markets
UK manufacturing growth slows: UK manufacturing growth slowed in May, according to fresh industry data released on 1 June, as output, new orders and employment rose at weaker rates. The seasonally adjusted S&P Global/CIPS UK manufacturing purchasing managers’ index (PMI) came in at 54.6 for the month – unchanged from the earlier flash estimate, and down from 55.8 in April. It was still, however, above the 50-point level that separates expansion from contraction, where it has remained for 24 months.
Oil prices hit fresh highs: Prices have risen after European Union leaders agreed on a plan to block more than two-thirds of Russian oil imports. Brent crude rose above $123 a barrel on Tuesday, the highest it has been for two months. Prices for oil and gas have soared in recent months, fuelled by the lifting of lockdowns and the war in Ukraine. Rising energy costs are putting pressure on consumers, making it more expensive to heat homes and drive. Petrol hit a new record of 173.02p a litre on Monday, according to the AA. At the same time, it said the average price of diesel in the UK rose to 182.58p a litre. Filling a typical 55-litre tank with diesel now costs more than £100.
French car registrations: New car registrations fell by -10% in May as semiconductor shortages and supply chain issues continued to impact deliveries. There were 126,813 passenger cars sold in May, according to the trade group PFA. Registrations are down -17% in the first five months of the year and remain -36% below 2019’s pre-coronavirus level.
U.S. auto sales: U.S. auto sales in May are expected to drop to their lowest level of the year, according to the forecast published by Cox Automotive. The new forecast pointed to a seasonally adjusted annual rate (SAAR) of new vehicle sales of 13.1 million in May, down from April’s 14.3 million level and a steep decline from the 16.9 million level posted in May 2021. May’s sales volume is expected to finish near 1.14 million units, down 9% from the previous month and a 28% drop from one year ago – new vehicle sales in May 2021 reached 1.59 million, the second-best month of 2021 by volume.
Directors’ economic confidence hit by inflation and Brexit: Business leaders are growing more anxious about the economic outlook, as they grapple with rising costs and the UK’s new trading relationship with the EU. The Institute of Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, sunk to -45 in May, down from -36 in April. That’s the lowest reading since October 2020, just before the first successful Covid-19 vaccine trial results were released. Overwhelmingly, the most frequent reason for pessimism for the UK economy was inflation (41%), followed by difficulties in the UK’s trading relationship with the EU (20%).
Annual house price growth slows: UK house price growth has slowed as the cost-of-living squeeze hits households, although prices are still rising much faster than wages over the last year. Lender Nationwide reports that May saw “a slight slowing” in the rate of annual house price growth. Prices were 11.2% higher than a year ago, down from 12.1% in April. But prices aren’t falling – they rose 0.9% month-on-month in May, the tenth successive monthly increase, making it harder for first-time buyers to get onto the housing ladder.
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Date: Tuesday 8 March 2022
Time: 10:00 – 11:00amSMMT and invited speakers provided an overview of industry impacts and emerging issues in the developing Ukraine crisis. Topics discussed included sanctions, supply-chain disruption and other emerging challenges.
Chair: Mike Hawes, Chief Executive, SMMT
Speakers:
- Andrew Hood, Partner, Regulation, Trade and Public Policy, Fieldfisher LLP
- SMMT Policy & Economics team
