European Union Timber Regulation (EUTR)
The European Union Timber Regulation (EUTR – Regulation (EU) Nr.995/2010) is a regulation by the European Union from the 20th of October, 2010. The EUTR aims to prevent the trade of wood and wood and wood product from illegal cutting of timber.
According to the EUTR, it is forbidden to market timber and timber products from illegal cutting in the inner-EU market. The regulation applies to timber and timber products that are being initially introduced to the market.
The EU Timber Regulation (EUTR) – Overview
What damage is caused by illegal logging?
The illegal timber cutting – meaning the gaining of timber in a way that violates the laws and regulations of the respective country – has grave economic, ecologic and social consequences for some of the most precious forest stands and even communities that are dependent on these forests.
Why is it important for the EU to act?
The EU is an important export market for countries that deal with illegal timber cutting on a daily basis. If we stand idle, we would support these criminal acts and subvert the efforts to impose law and order in the poorest timber producing countries.
What does the EU do?
In 2003, the EU passed the FLEGT (Forest Law Enforcement, Governance and Trade) campaign that contains measures that should keep illegally cut timber away from the market, improve the offered legally cut woods and boost the demand for timber products from sustainable and legal cutting and cultivating.
The two core components of the FLEGT campaign are the European Union Timber Regulation (EUTR) and the voluntary partnership agreement (FPA). The FPA is a trade arrangement with timber exporting countries that contribute to the efforts to keep illegally cut timber away from the inner-EU market.
Timber that has the FLEGT license or he CITES permission (arrangement about the international trading of endangered wild animals or plants) are excluded from the EUTR.
The EUTR is complemented by two legislations that deal with following aspects in a detailed fashion:
- Regulation on the rules for the recognition and withdrawal of recognition of monitoring organizations:
Delegated regulation by the commission (EU) Nr. 363/2012
- Regulation to ensure the standardized implementation of the law:
Conduction regulation by the commission (EU) Nr. 607/2012
What do the legislations particularly say?
According to the new European Union Timber Regulation (EUTR – regulation (EU) Nr.995/2010), it is forbidden to bring timber or timber products from illegal timber cutting to the inner-EU market. The EUTR applies to timber and timber products that are being initially introduced to the market. The regulation fights against trades with illegally cut timber and timber products with the introduction of three important obligations:
- EU operators – in other words those who are the first to place timber or timber products on the EU market – underlie the obligation to exercise diligence.
- Initial marketing of timber and timber products from illegal timber cutting is forbidden.
- Traders – in other words those who buy and sell timber and timber products that were already on the market – are obliged to retain information about suppliers and customers to guarantee smooth traceability of the timber.
Which products are affected?
The legislations affect timber and timber products that are produced in the EU or imported from outside the EU. Timbers tagged with the FLEGT license or the CITIES permit comply with the requirements of the regulation.
The legislation includes a vast range of timber and timber products. However, not all timber and timber products are covered. A comprehensive list of covered products can be .found here
Which products are not affected?
A comprehensive list of products that are not affected can be found here.
Who is affected?
The regulation divides those who trade with timber and timber product into two categories: operators and trader. Operators are the first to place timber and timber products on the EU market and therefore bear the greatest part of the responsibility. While traders, who sell timber and timber products, are only obliged to document whom the sold and from whom they bought timber.
They place timber and timber products on the inner-EU market for the first times.
Operators underlie the obligation to exercise due diligence, when they bring new timber to the inner-EU market. In doing so they are obliged to exercise care to minimize the risk that the timber comes from illegal timber cutting. This means they have to implement a risk management system called a due diligence system that is based on following aspects:
Access to information: The operator is obliged to be able to access information about timber and timber products, the land where the timber is cut (and as the circumstances require about the region and the concession), the type of tree, quantities, details about the supplier and about the compliance with the respective national legislations.
Risk assessment: The operator has to evaluate the risk on the basis of the aspects mentioned before and considering the risk criteria in accordance to the EUTR, whether illegally cut timber has gotten into his supply chain.
Risk reduction process: Provided the evaluation results that the risk of illegally cut timber is high, additional measures have to be taken to reduce the risk. These measures can be requesting additional information and checking the suppliers.
They sell and/or buy timber and timber products that are already on the inner-EU market for commercial purposes.
Traders are obliged to keep information about the supplier and customers to ensure a smooth traceability of their timber.
This information has to be kept for at least five years.
But the information is only needed for the time period until the last sales transaction between companies. Trades with end customers do not have to be recorded.
How can you, as a market participant, fulfil and implement your duty of care
The market participants may develop their own due diligence systems – these would be several measures and processes for effective risk reduction – or resort to the system of a monitoring organisation.
As a trader, you are only obliged to record information about the company from whom you bought the timber and timber products. Same goes for companies that sell timber and timber products.
If you are an operator you bear more responsibility. You must exercise due diligence to ensure that your timber comes from legal sources.
Your due diligence system must contain following components:
InformationYou are obliged to have access to following information about your timber:
- Description (including the trade name, the product type and the common name / full scientific name of the species);
- Country where the timber was cut (and, if applicable, the region, as well as the concession of harvest – that means any arrangement assigning the right to cut timber in a predefined area);
- Quantity (expressed in volume, weight or number of units)
- Name and address of the suppliers;
- Name and address of the buyer (trader) who buys timber from you;
- Documents or other information, which prove the compliance of the timber and timber products with the respective legislations. Please see section four of the guideline to see some concrete examples of what counts as ‘documents or other information’.
Risk assessment:: You are obliged to analyse and evaluate the risk that the timber you are dealing comes from illegal cutting. While making this assessment, you should evaluate the timber with the help of following criteria:
- Assurance of compliance with respective legislation, which may include certification or other third-party-verified schemes which cover compliance with respective legislation;
- Prevalence of illegal cutting of specific tree species;
- Prevalence of illegal cutting or practices in the country of harvest and/or sub-national region where the timber was cut, including consideration of the prevalence of armed conflict;
- Sanctions imposed by the UN Security Council or the Council of the European Union on timber imports or exports;
- Complexity of the supply chain of timber and timber products.
Risk mitigation:: If you realize that the risk of placing illegally harvested timber on the market is negligible, you must take action by implementing risk mitigation measures. These measures may contain:
- Requesting additional information from your suppliers;
- Requesting additional documents from your suppliers;
- Requesting third party verification and much more.
BM TRADA offers seminaries about the European Union Timber Regulation (EUTR), as well as the FSC and PEFC. If you have any questions or need extensive information, please do not hesitate to give us a call.
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