Frequently asked questions

What is EU Timber Regulation and what it’s not?

European Union (EU) countries are implementing an action plan referred to as the EU “Forest Law Enforcement, Governance and Trade” or FLEGT Action Plan which aims to tackle the issue of illegal logging. Part of this action plan includes new legislation called the “EU Timber Regulation” or best known by its acronym EUTR. This new legislation means that from the 3rd of March 2013 it will be illegal to place timber and most products made of wood onto the EU market, regardless of where the wood was harvested, without making substantial efforts to verify that these were legally sourced. In other words, timber entering the EU market must be obtained whilst upholding all relevant national and international laws along the supply chain.

EUTR was not created to hinder timber trade but to support companies trading legal timber in Europe by setting the same legal standards for everyone. It places an obligation on timber importers to make sufficient efforts to ensure the legality of their timber imports whilst requiring everyone along the supply chain to keep records of the source and destination of timber products.

Why is this legislation useful and important?

Illegal logging is a global issue that has detrimental economic, social and environmental impacts. Illegal logging is not simply the harvesting of timber illegally but may also include any illegal activity associated with activities along the supply chain (e.g. transport, processing or trading) which does not comply with relevant laws.

Although this new legislation is likely to cause some extra bureaucracy in the short to middle term, the benefits far outweigh the negatives in the long term. These benefits include:

  • Creating a level playing field for everyone bringing timber and wood products into the EU market
  • Promoting compliance with laws therefore fighting corruption and supporting the rule of law
  • Help with the long term sustainability of the timber industry
  • Improve and/or maintain positive perceptions of the timber industry by both the general public and pressure groups

Legislation with similar requirements has been or is being implemented in other major timber consuming countries (e.g. US Lacey Act or the Australian Illegal Logging Bill) so many of the steps needed to meet EUTR may help meet some or many of the requirements for other legislation.

What products does it affect?

All timber and most wood products that enter the EU market for the first time on or after the 3rd of March 2013. This includes products made of multiple species from, potentially, different countries/regions. The full list of products is included in the annex of the relevant EU legislation. There are some notable exceptions not currently included in the legislation, such as

 

  • Recycled, recovered or waste timber
  • Packing material exclusively used to support, protect  or carry another product
  • Printed material
  • Craft products

It is worth remembering that the list is likely to change over time so applying the FLEGT principles to all wood product lines may be highly advisable.

Products that carry a “Forest Law Enforcement, Governance and Trade” (FLEGT) license from a “Voluntary Partnerships Agreement” (VPA) country or appropriate CITES import/export permits will automatically be considered to have met all the FLEGT requirements. You can find out which countries have FLEGT VPA agreements at http://www.euflegt.efi.int/portal/home/vpa_countries/

What does this new legislation require of you?

Although the onus of the legislation is primarily on the individuals/organisations that first place timber or timber products on the EU market (referred to as “Operators” in the legislation), other organisations or individuals along the supply chain (referred to as “Traders”) will need to help gather and/or relay the necessary evidence. Operators will need to identify each link in their supply chains in order to ensure transparency and traceability from harvesting through to being placed on the EU market. Operators may need to implement new contract conditions or clauses along the supply chain in order to not only verify the legality of timber but also collect evidence to substantiate this legality.

The requirements of EUTR are that only ‘legally harvested’ timber and wood products enter the EU market. ‘Legally harvested’ means harvested in accordance with the relevant legislation in the country of harvest so the details will vary from one country to another. ‘Applicable legislation’ in relation to timber harvesting includes social, environmental and economic laws which may relate to:

  • Rights to harvest timber, including a particular species, in a certain country, region or area
  • Payments and duties relating to timber harvesting
  • Environmental, conservation and forest legislation
  • Third parties legal rights (e.g. indigenous land rights)
  • Trade and custom (e.g. taxes and fees)

Ultimately EUTR requires information to be gathered and documented in such a way that the chance of illegal timber entering the EU market is as low as possible or negligible. Operators will need to have regular checks along their supply chain in order to be sure of the legal source of the timber or wood products they are bringing into the EU market.

Once a product has entered the EU market, the legislation requires traders (see definition earlier in this section) within the EU to keep careful records of where they obtained their timber products and who they have sold them onto.

What is “Due diligence”?

Compliance with the legislation relies on a suitable due diligence system in order to collect the documentation and evidence of legality. This due diligence system lies at the core of EUTR. A due diligence system will consist in a set of procedures and measures that are designed to minimise the risk of placing illegally harvested timber or wood products into the EU. Due diligence has three consecutive steps: provision of information, risk assessment and risk mitigation.

EUTR details the provision of information as being:

  • Description, trade name and type of product. Common name of tree and scientific name
  • Country of harvest and region and/or concession
  • Quantity (volume, weight or number of units)
  • Name and address of supplier
  • Name and address of trader to whom shipment is going to
  • Documents indicating compliance with relevant legislation

Note that for a product made of several species from different sources, the legislation requires information for all of these.

One of the main challenges that operators will face is identifying all the relevant legislation along their supply chains, from forest through to entering the market. GFTN/TRAFFIC have carried out legality framework assessments for a number of countries and these can serve as useful examples to analyse the EUTR requirements. These frameworks are not definitive or prescriptive but they can help to guide the “provision of information” aspect of the legislation. Based on the legality frameworks for three of these countries although it is important to note that two of these (Indonesia and Vietnam) have both signed VPAs so would only require this evidence if shipments are not in possession of valid FLEGT License OR the product entering the EU market is not listed under their VPA agreement.

Essentially, there will be two types of evidence required: Documentation and Verification. Documentation may consist of certificates, licenses, reports, permits and/or receipts that support the legality of timber entering the EU market. Verification may be required to confirm that national legislation is being adhered to, e.g. workers rights and welfare.

Risk assessment” should enable operators to assess the risk that the timber or wood products being imported have been sourced illegally by looking at the information gathered along with:

  • Assurance of compliance with applicable legislation. Possible certification or verification by third party schemes may measure compliance with relevant legislation although the EUTR does allow for first party or second party, such as trade associations, to verify compliance.  However, the level of confidence of the assurance would correspondingly be lower.
  • Level of illegal harvesting of a particular tree species (e.g. big-leaf mahogany)
  • Level of illegal harvesting in a particular area (be it country or specific region)
  • International sanctions on timber imports placed by UN security council and/or the Council of the European Union
  • Complexity of the level of processing.
  • Complexity of supply chain

Risk Mitigation” will only be needed for those products which are not deemed low or negligible risk by the risk assessment process. Mitigation measures should minimise any identified risks of illegal timber or wood products from entering the EU market. Mitigation measures may include requesting additional information, documentation, auditing and/or asking suppliers to get third party certification/verification.

To meet the requirements outlined in EUTR it will be possible to either develop in-house mechanism to verify legality or outsource the process to pre-approved organisations which the EUTR legislation refers to as “Monitoring Organisations”. These organisations will be able to support, advice and guide timber importers in order to comply with the EUTR. It is worth noting that responsibility to maintain and regularly evaluate due diligence systems falls on the operator if they are running their own system or on the monitoring organisation if they are out sourcing.

The level of information required will vary substantially depending on what the country/region of origin for the timber or wood products is, how much processing it has undergone and how many traders and/or countries it has travelled through before entering the EU market.

Due diligence systems needs only be applied once a year to supply chains that have not varied in terms of timber or timber product, harvest area, supplier and trade route. All the evidence gathered, chain of custody records along with risk mitigation measures taken, must be stored and be easily accessible for a minimum of five years after the date that a product enters the market. Each EU country has nominated an organisation in charge of implementing the legislation these are referred to in the legislation as competent authorities. Competent authorities will periodically check the due diligence process as well as the evidence collected.

What are the penalties for non-compliance?

Each EU member state will set its own mechanisms for monitoring the implementation of EUTR in addition to setting appropriate penalties on any infringements. The penalties may include: suspension of permission to trade, seizure of timber/wood products, fines proportionate to the level of environmental damage, tax loss, economic detriment or value of the timber products.

This project is financed by the European Union / Este proyecto está financiado por la Unión Europea