On 20 May 2026 the US Department of Justice announced that Farjess Inc., Royal Canadian Steel Inc. and their part-owner Feroz Jessani would pay $19 million to settle False Claims Act allegations. The conduct ran from May 2019 to January 2025: knowingly misrepresenting the country of origin of flat-rolled steel to US Customs and Border Protection as Canadian or American when it actually originated in China, Indonesia, Italy, Turkey or Vietnam. The case was brought by a whistleblower – a broker – who received roughly $3.61 million.
Note how it surfaced. Not through inspection at the border. Through someone inside the supply chain who knew what the paperwork said and what the metal was.
For a procurement head on a refinery, LNG train or mine build, that is the shape of the current risk. A cluster of regimes that matured in 2025 and 2026 has converted two questions – where was this made, and what is it made of – from clearance detail into contractual data fields that must be collected per part, sourced from suppliers and sub-suppliers, kept current, and evidenced years later. Few capital projects have a system for it, because until recently there was nothing to have a system for.
Three things about US metals tariffs are widely misunderstood as of September 2026, and each matters to a sourcing plan.
First, the content-value rule is gone. From March 2025 the duty on derivative products outside the core metals chapters applied only to the declared value of the steel or aluminium content. Proclamation 11021, signed 2 April 2026 and effective 6 April, reversed it. CBP’s implementing guidance (CSMS # 68253075, 3 April 2026) states that duties apply to the full customs value of the imported product, regardless of metal content. Anyone still modelling tariff exposure on content value is modelling 2025.
Second, the rate is now annex-driven rather than metal-driven. Under Proclamation 11021 some products sit at 50% and others at 25%, with a further restructuring by Proclamation 11032 (91 FR 34085, published 4 June 2026, effective 8 June) moving a large tranche to 25% and creating a preferential group – Argentina, Ecuador, Japan, Korea, Switzerland, Taiwan, the UK and the EU – at Column 1 rates with a 15% minimum. It is no longer safe to say, “steel is 50%.” The rate depends on which annex the specific tariff code sits in, which is precisely why per-part data now matters.
Third, the inclusions calendar no longer exists. From May 2025 the derivative list grew through a windowed process – two-week submission windows three times a year, in May, September and January, with determinations due within 60 days. That process produced one completed tranche: on 19 August 2025 the Bureau of Industry and Security added 407 tariff codes to the derivative list, effective 18 August. Proclamation 11021 then terminated the inclusions process outright, replacing it with authority for Commerce and USTR jointly to add derivative articles whenever they determine imports threaten to impair national security – with no petition requirement, no mandated comment period and no prescribed timeline.
The list still grows. It simply grows without a calendar.
The live example is close to home. On 6 August 2026 Commerce published a request for comments (91 FR 50756) on adding 14 further derivative articles, generally at 25%. The proposed list includes welding machine parts, heat exchange unit components, hydraulic engine and motor parts, mobile lifting frames and straddle carriers, self-propelled cranes, and tanker trailers. Those are line items on an EPC package, not consumer goods. Comments closed on 27 August 2026. A determination can land at any point, and nothing obliges anyone to tell you when.
What the importer must report has changed shape rather than gone away. Countries of melt and pour must still be reported for steel and steel derivatives, and countries of smelt and cast for aluminium – for aluminium, that means primary country of smelt, secondary country of smelt, and country of most recent cast. Goods where the relevant metal is less than 15% of aggregate weight fall outside the duty under a specific carve-out that does not extend to the core metals chapters. To claim the 10% rate for US-origin metal, content must be at least 85% by weight, relaxed from 95% on 8 June 2026. Russian-smelted primary aluminium continues to attract 200%.
Read those together. Under the old rule a supplier’s silence on metal value cost you money, because unknown content meant the whole entered value was dutiable. Under the new rule full value is dutiable anyway – so the burden has shifted from invoice valuation to weight fractions, tariff classification and mill-level origin, all of which sit deeper in the supply chain than a price. The requirement did not soften. It moved to data your tier-one supplier may not hold either.
And the penalty ceiling moved with the base. Civil penalties under 19 U.S.C. § 1592 are calculated as multiples of lawful duties — up to four times for gross negligence, two times for negligence. When the rate doubled and the base moved from metal content to full customs value, the exposure on an identical misdeclaration multiplied.
The EU Carbon Border Adjustment Mechanism entered its definitive period on 1 January 2026. For capital projects the important detail is not the carbon price. It is what happens when your supplier cannot give you verified numbers.
Regulation (EU) 2025/2083 of 8 October 2025 replaced the old €150-per-consignment exemption with a single mass-based threshold of 50 tonnes per importer per calendar year, applied cumulatively across iron and steel, aluminium, fertilizers and cement – not per sector. A project importing structural steel, aluminium and cement crosses it almost immediately. Electricity and hydrogen have no mass threshold at all.
Declarants may use actual embedded emissions or Commission default values. Using actual values requires the producing installation to monitor emissions, allocate them to specific production processes, attribute them to individual goods, and have all of it verified by accredited third parties to EU standards. That is not a data request your procurement team can satisfy from its own records; it is a request your supplier’s supplier must satisfy.
Commission Implementing Regulation (EU) 2025/2621 of 16 December 2025 puts a number on the alternative. Default values carry a mark-up to account for deviation from an individual installation’s performance: 10% in 2026, 20% in 2027 and 30% from 2028 for cement, hydrogen, iron and steel, and aluminium. (Fertilizers sit at 1% throughout – a detail most commentary omits.)
That mark-up is not a penalty for emitting. It is a penalty for not having the supplier data.
The timing is the trap. Goods imported from 1 January 2026 are declared for the first time by 30 September 2027, and certificate sales begin 1 February 2027. Twenty months separate the purchase from the test. Emissions data has to be captured at the point of order, from the mill, in the contract. It cannot be reconstructed in 2027 from a shipment that cleared in 2026.
The UK’s version starts 1 January 2027 and is deliberately different in every dimension that matters to a system design. Five sectors – aluminium, cement, fertilizer, hydrogen, iron and steel – with no electricity. Registration is triggered at £50,000 of imported CBAM goods, a value test, not a mass test. Records must be kept for six years, and per good they include the eight-digit commodity code, tax point date, value, exemption evidence, and net mass in kilograms excluding packaging to up to six decimal places. Using actual emissions requires verification reports or summaries obtained from suppliers and retained for the full six years.
A buyer shipping the same steel into both jurisdictions runs two incompatible threshold tests on one consignment, and must hold supplier-sourced evidence for six years against a declaration due nine months after each year-end.
One caution worth stating plainly: CBAM does not currently cover downstream or derivative goods. A proposal to extend it exists – published 17 December 2025, with a proposed 2028 start – but the institutions disagree on its scope, with the Commission proposing 180 downstream products, the Council 200 in its June 2026 general approach, and the Parliament’s environment committee 457 in July 2026. Treat it as forward risk, not current obligation.
The third regime removes any remaining ambiguity about whose problem this is.
On 31 July 2026, effective 3 August, the Department of Homeland Security added 43 companies to the Uyghur Forced Labor Prevention Act Entity List, bringing it to 187 entities – described as the single largest expansion of the list to date – and named aluminium and copper among its high-priority enforcement sectors, alongside apparel, cotton and tomatoes. Aluminium and copper are busbar, cabling, heat exchangers and structural sections.
CBP’s consolidated forced labour guidance, published 9 June 2026, sets out what rebutting the statutory presumption actually takes: searchable, indexed, translated and non-duplicative materials, including supply chain tracing documents, purchase orders, invoices, bills of materials, production and transportation records, supplier attestations with complete translations, sub-tier supplier documentation with no gaps, and origin certificates. CBP states that affidavits, redacted records, untranslated documents and incomplete sub-tier supplier information are unlikely to meet the clear-and-convincing standard.
That is a regulator saying, in operative language, that origin compliance is a sub-tier supplier data collection exercise. Not a customs exercise.
The EU’s Forced Labor Regulation (EU) 2024/3015 applies from 14 December 2027 and imposes no standalone due diligence duty – but any due diligence performed is taken into account in an investigation, and its remedies include component replacement where only specific parts violate the ban. Component-level remedy only works if the buyer knows which component came from where.
This is not a compliance abstraction; it is showing up in input prices and in contractor margin.
The Associated General Contractors of America, analyzing producer price data on 15 July 2026, reported construction input costs up 7.1% year on year against contractors’ bid prices for new nonresidential buildings up only 3.5%. Within that: aluminium mill shapes +52.4%, copper and brass mill shapes +26.0%, steel mill products +16.9%. AGC’s chief economist attributed the movement directly to metals tariffs. The Associated Builders and Contractors’ analysis of the August 2026 data, released 11 September 2026, showed the steel line accelerating further – steel mill products +23.4% year on year, copper wire +27.2%, switchgear +12.3%, with overall construction inputs up 8.9%.
Inputs rising at twice the rate of bid prices is the margin compression story in one line, and on a fixed-price EPC contract it is a claims story shortly afterwards.
Large equipment vendors are managing the same exposure openly. On GE Vernova’s Q1 2026 earnings call, CFO Kenneth Parks stated that tariffs had a net impact of about $250 million in the prior year and guided to $250–350 million net in 2026, adding that “the structure of those tariffs has moved around, but the absolute number is about exactly where we thought it would be,” and noting that the Section 232 definitions weighed more heavily on the company’s transformer joint venture than on other units. A year earlier the company had described mitigations including shifting supply chains and leveraging suppliers in China dual-qualified in other countries.
Dual-qualifying a supplier in a second country is an origin strategy. It is only executable if you hold origin data per supplier, per part, and can prove it.
The regimes converge on a single requirement: a per-part, per-supplier record of origin and composition, with evidence attached, current, and reaching beyond tier one. The evidence on whether buyers can produce that is not encouraging.
An Achilles survey of 2,805 organizations across construction, energy, manufacturing, transport and the public sector, published in March 2026, found only 6% reporting full visibility into tier-two and tier-three suppliers, and nearly half reporting limited or no visibility beyond immediate suppliers. More than 75% said inconsistent national regulations affect their cross-border supplier requirements – which is a fair description of running a 50-tonne mass test and a £50,000 value test against the same steel.
Research by the Institute for Supply Management with Amazon Business, released 14 July 2026 across 425 supply chain professionals, found 65% still rely on manual reporting to gather supply chain data, and only 45% considering themselves prepared for supply chain disruption.
Meanwhile the World Economic Forum’s Global Risks Report 2026, published 14 January 2026 on a survey of more than 1,300 leaders and experts, ranked geoeconomic confrontation as the single highest risk on the two-year horizon, ahead of armed conflict and extreme weather. The Hackett Group’s 2026 Procurement Key Issues study places trade wars and geopolitical instability as the second-ranked procurement risk, behind cybersecurity.
The risk is acknowledged at the top of the function. The data model underneath it is largely manual.
Four capabilities separate teams that can answer these questions from teams that discover they cannot when a declaration falls due.
Origin and composition captured at qualification, not at clearance. Country of melt and pour, country of smelt and cast, metal weight fraction and tariff classification belong in the supplier and item record at the point a vendor is approved, because that is the only moment the buyer has commercial leverage to ask.
Contractual right to sub-tier data. CBP’s June 2026 language – sub-tier documentation with no gaps – and CBAM’s installation-level verification requirement both reach past your counterparty. If the purchase order does not create the obligation to pass the request down, no system will retrieve it.
Evidence stored against the assertion, with a retention clock. UK CBAM’s six years is the binding constraint, and a mill test certificate that exists somewhere in an inbox is not a retained record.
Re-verification on change. Origin is not a static attribute. A supplier that switches mills changes your duty rate and your CBAM exposure without telling you, and the derivative list itself now moves without notice.
This is the gap Dharas addresses. Its supplier relationship management and compliance reporting platform holds origin, material content and the supporting documents inside the supplier and item record rather than in customs files downstream – so a change of mill, a new derivative tariff code, or a CBAM declaration due twenty months after the purchase order resolves against a maintained record instead of a document hunt across a tier-two supply chain that has moved on.
The Royal Canadian Steel settlement is the useful benchmark for what the alternative costs. Nineteen million dollars, for a field on a form, surfaced by a broker who happened to know what the metal was.
Dharas provides enterprise supplier relationship management and local content reporting for large capital projects in oil and gas, mining and infrastructure.
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