EU Timber Regulation

The EU Timber Regulation

The EU Timber Regulation (EUTR), which came into force in March 2013, forms part of the EU’s efforts to stamp out the international illegal timber trade, which is still estimated to be worth billions of Euros a year, contributes to deforestation, deprives often poor producer countries of tax revenues and curbs the ability of local populations to derive a legitimate income from sustainable and legal forestry and timber production.

The EUTR makes it an offence to ‘first place’ illegal timber on the EU market, whether that’s sourced from outside the EU or grown with in it – and the definition of illegal is that of the country of origin.

The EUTR also obliges all companies, which first place timber or wood products on the EU market, termed ‘Operators’ under the Regulation, to assess the risk that they come from illegal sources. To do this, they must operate a sound due diligence risk assessment system (DDS), which satisfies the Regulations’ legality requirements. This will generally involve quizzing suppliers on their proof of legality and ensuring products are backed with relevant records and other documentation.  The Operator must obtain a range of verifiable information from this process including; product description, timber species, country of harvest, quantity, name and address of supplier and trader, and documents indicating compliance with all applicable legislation.

Criteria for assessing risk also comprise assurance of compliance with applicable legislation, including certification schemes, and third party verification. Prevalence of illegal harvesting of specific tree species should also be taken into account, as should the prevalence of illegal logging in the country of harvest, the complexity of the supply chain and whether UN or EU sanctions on timber imports apply.

If, after this process, the risk of illegality is not considered negligible, Operators must take further risk mitigation measures. This can include obtaining additional sourcing data and third party verification to back supplier claims.

Operators can either set up their own DDS, or make use of one aligned to EUTR legality requirements provided by bodies such as national timber trade federations, or a Monitoring Organisation (MO). An MO, which can also be a national trade body, or a private operation, such as an environmental certification consultant, has to be approved and appointed by the European Commission. They not only have to set up an EUTR-aligned DDS, but also check Operators using it are doing so correctly, and take corrective action where they are not.

The ETTF Due Diligence System

Due Diligence SystemThe ETTF has also developed an EUTR-aligned DDS in association with Danish-based international not-for-profit environmental organisation NepCon. This is designed for national timber trade bodies across the EU to offer to their memberships – and a number of ETTF member Federations and Associations have now adopted it – and it is also suitable for use by individual companies. Guidelines have also been drafted to enable other ETTF member organisations, which have already devised their own DDS, to adjust the latter so they match at least the basic principles of the ETTF system. The aim of this is a coherent, coordinated approach to Due Diligence across the EU. This will help promote uniform application of the EUTR and make life easier both for Operators and also their suppliers worldwide who will have less variation in DDS inquiries from their EU customers to deal with.

Click on this icon for the ETTF DDS document.

Traders, Enforcement and Exemptions

Under EUTR definitions, businesses which buy timber and wood products from Operators are termed ‘Traders’. Their obligation under the Regulation is to keep records of which Operators they bought products from, and who they sold them on to.

In each of the 27 EU member states, national governments have appointed a ‘Competent Authority’, the body responsible for monitoring and enforcing the EUTR.  They have also introduced national measures and mechanisms for the implementation of the Regulation in their country, in terms of policing and penalties. The latter include seizure of illegal timber, fines and, in the event of serious or repeated offences, prison sentences.

With penalties currently varying across the EU, there are concerns about the uniform enforcement of the EUTR. But national and international industry bodies, including the ETTF, have pledged to monitor the application of the Regulation to ensure international conformity and fairness.

There are also a range of EUTR exemptions. Notable among these are products covered by a certificate issued under CITES (Convention on International Trade in Endangered Species) and those imported into the EU from supplier countries signed up to an EU Forest Law Governance Enforcement and Trade Voluntary Partnership Agreement (FLEGT VPA). No FLEGT VPA licenced timber was available at the time the EUTR was implemented, but the first material is expected to come into the market this year.

The impact and implementation of the EUTR will be reviewed in two years time, with stakeholders expecting to be invited to comment, in order to identify and remedy any shortcomings.

To visit the European Commission EUTR Website click here.

For the European Commission’s Final EUTR Guidance Document, the Final Version of the EUTR, the EUTR Act for Monitoring Organisation Status and the EUTR Implementing Regulation, please click on the icons below.