Frequently Asked Questions
Why the EU Timber Regulation?
This law is part of the European Union's policy to fight illegal logging and associated trade, which was defined back in 2003 with the Forest Law Enforcement Governance and Trade (FLEGT) Action Plan. Earlier it was not illegal to place illegally harvested timber on the EU market.
The Regulation was adopted as an overarching measure to prohibit placing of illegal timber and timber products on the internal market. It aims at developing responsible trading practices and at educating suppliers and consumers on the EU market to take measures to ensure timber has been extracted in compliance with the national legislation in the place of harvest, which will help reduce deforestation worldwide and diminish its significant negative economic, environmental and social impact.
What is the EU Timber Regulation?
It is an EU law applicable and enforceable in all 27 EU Member States. It imposes 3 obligations:
1. Due Diligence (DD) obligation = everyone placing timber products on the EU market must exercise DD by following a ”Due Diligence System” (DDS) to minimize the risk of importing illegal timber into the EU
Art 4 § 2.: “Operators shall exercise due diligence when placing timber or timber products on the market. To that end, they shall use a framework of procedures and measures, hereinafter referred to as a ‘due diligence system’, as set out in Article 6. Each operator shall maintain and regularly evaluate the due diligence system which it uses, except where the operator makes use of a due diligence system established by a monitoring organisation referred to in Article 8.
2. Prohibition to place illegally harvested timber or timber products on the EU market
Art. 4 §1: “The placing on the market of illegally harvested timber or timber products derived from such timber shall be prohibited.”
What does “illegally harvested” mean?
Art. 2 § g) ‘illegally harvested’ means harvested in contravention of the applicable legislation in the country of harvest;
What is the “applicable legislation” in the country of harvest?
Art. 2 § (h) ‘applicable legislation’ means the legislation in force in the country of harvest covering the following matters:
- rights to harvest timber within legally gazetted boundaries
- payments for harvest rights and timber including duties related to timber harvesting
- timber harvesting, including environmental and forest legislation including forest management and biodiversity conservation,
- where directly related to timber harvesting
- third parties’ legal rights concerning use and tenure that are affected by timber harvesting
- trade and customs, in so far as the forest sector is concerned.
Operators wanting to place timber on the EU market must be confident timber in their products has been harvested in compliance with above listed legislation of the country of harvest.
3. Traceability = “traders” shall be able to identify their suppliers and customers
Art. 5 Obligation of traceability
Traders shall, throughout the supply chain, be able to identify:
(a) the operators or the traders who have supplied the timber and timber products; and
(b) where applicable, the traders to whom they have supplied timber and timber products.
Traders shall keep the information referred to in the first paragraph for at least five years and shall provide that information to competent authorities if they so request
Who is liable and for what?
A. " Operators"
Obligations 1 (to undertake DDS) and 2 (the prohibition) apply only to those who place timber and timber products on the European market. In the Regulation, they are referred to as “operators”.
Who is considered an “operator”?
Art 2 § c) “ ‘ operator ’ means any natural or legal person that places timber or timber products on the market”
What does “placing on the market” mean?
Art 2 § b) “ placing on the market means the supply by any means, irrespective of the selling technique used, of timber or timber products for the first time on the internal market for distribution or use in the course of a commercial activity , whether in return for payment or free of charge. It also includes the supply by any means of distance communication…
Main characteristics of “placing on the market” are:
- For the first time – Timber products already placed on the EU market will not be considered as well as products derived from timber products already placed on the market.
Art 2 § b ) “The supply on the internal market of timber products derived from timber or timber products already placed on the internal market shall not constitute “placing on the market”
Example: Furniture produced by timber already placed on the market.
- Internal market – the timber must be physically present in the EU, either harvested in the EU or imported and cleared by customs for free circulation
- Commercial activity – harvesting and imports for personal use is not covered.
NB! The Commission issued a Guidance document [100 KB] , where the term “placing on the market” is explained in detail.
Art. 2 § d) ‘trader’ means any natural or legal person who, in the course of a commercial activity, sells or buys on the internal market timber or timber products already placed on the internal market
Anyone further down the supply chain that buys/sells timber products must have basic traceability information indicating from whom they buy their products and to whom they sell them on and to keep these records for at least 5 years. This requirement will help enforcement authorities trace a timber product back to the “operators” where an investigation is conducted.
What is Due Diligence System (DDS)?
A DDS contains the following three elements:
1) Access to information
This means it is advisable that operators have evidence of the information required but it is not obligatory; it suffices that they have access to it and are able to provide it upon request by the competent authorities (e.g. their supplier sends the necessary documents when so requested).
What type of information?
… - description (trade name, type of product, common name of tree species, full scientific name if there is ambiguity about the common name)
- Country of harvest (where the risk of illegal harvesting between sub-national regions varies, the exact sub-national region has to be indicated in addition to the country of harvest; if there is a specific level of risk associated to a particular concession of harvest, this information has to be provided, too)
- Quantity (volume, weight or number of units)
- Name and address of supplier
- Name and address of internal trader to whom timber has been supplied
Operators must also require their suppliers to provide them with “documents or other information indicating compliance of those timber and timber products with the applicable legislation” (Art. 6 (1) (a) )
2) Risk assessment.
This step requires operators to evaluate, based on the information they have collected, if their products have been produced in compliance with the laws of the harvesting country. The following questions (risk assessment criteria) must also be replied:
- How do I assure that my suppliers comply with the applicable legislation? Are my products certified or legally verified? Do I consider those certificates credible and trustworthy?
- Does illegal harvesting of specific tree species exist in the country/area where I source my products from?
- Do illegal harvesting practices in general exist in the country of harvest/sub-national region where I source my products from? Does armed conflict exist there?
- Are there any sanctions by the UN Security Council or the European Union imposed on timber imports/exports in the country/area where my products come from?
- How complex is my supply chain?
3) Risk mitigation
If the outcome of step 2 “risk assessment” is that there is a non-negligible risk (i.e. if information collected is not complete or credible; if replies to any of questions b) to e) above are positive) of timber products being illegal, the operator has to take risk mitigation measures to minimise that risk effectively. Measures may range from requiring additional information or documents from suppliers and/or third party verification to shifting to more reliable sources. If the outcome of step 2 is that the timber is of negligible risk of being illegal, there is no need to set up risk mitigation procedures.
Products that are by definition legal?
FLEGT licensed products and CITES products with valid permits and licenses are by EU TR definition legal. This says no due diligence exercise will have to be undertaken for these products, i.e. no additional information, risk assessment or risk mitigation.
Art. 3 [FLEGT-.licensed] Timber … shall be considered to have been legally harvested for the purposes of this Regulation.
Art. 3 Timber of species listed in [CITES] Annex A, B or C to Regulation (EC) No 338/97 and which complies with that Regulation and its implementing provisions shall be considered to have been legally harvested for the purposes of this Regulation.
NB! This is not the case for certified or legally verified products.
What are Monitoring Organisations (MOs)?
Companies or organisations, which will assist operators to comply with the EU Timber Regulation.
1. A monitoring organisation shall:
(a) maintain and regularly evaluate a due diligence system as set out in Article 6 and grant operators the right to use it;
(b) verify the proper use of its due diligence system by such operators;
(c) take appropriate action in the event of failure by an operator to properly use its due diligence system, including notification of competent authorities in the event of significant or repeated failure by the operator
Operators have a choice between setting up their own DDS and exercising due diligence themselves, or using a DDS of a MO. MOs will be officially recognised as such by the Commission and their work will be checked periodically by competent authorities in the EU Member States. Their recognition may be withdrawn if established that they do not exercise their functions in accordance with the law. If an operator chooses to develop its own DDS, the system does not need to be previously approved by the Commission. It could be expected that national competent authorities check operators using an officially approved DDS provided by a recognised Monitoring Organisation less intensively than operators using their own DDS.
What products are covered by the EU Timber Regulation?
The EU TR covers a wide range of timber and timber products but not all. Article 2(a) of the EU TR explicitly excludes from its product scope used “timber and timber products that have completed their lifecycle and would otherwise be disposed of as waste” (recycled/recovered/waste products).
Products included in the EU TR product scope are listed in its Annex using codes of the EU Customs Combined Nomenclature.
How do you know if your imports are covered?
Simply check the customs code under which you import products and then see if it is listed in the EUTR Annex.
NB! The list of products covered by the Regulation can be amended if the experience gained in the application of the EUTR so required.
Who will enforce the EUTR?
Competent authorities are those governmental bodies who are responsible for the application and enforcement of the Regulation. They have to check if operators fulfill the requirements of the Regulation. This includes the organisation of spot check missions at operator’s premises to see if they follow a robust Due Diligence Systems and if illegal timber has been placed on the market.
Art. 7 § 1
Each member state shall designate one or more competent authorities responsible for the application of this Regulation.
Competent authorities should carry out checks at regular intervals on monitoring organisations to verify that they effectively fulfill the obligations laid down in this Regulation. Moreover, competent authorities should endeavor to carry out checks when in possession of relevant information, including substantiated concerns from third parties.
Competent authorities should monitor that operators effectively fulfill the obligations laid down in this Regulation. For that purpose the competent authorities should carry out official checks, in accordance with a plan as appropriate, which may include checks on the premises of operators and field audits, and should be able to require operators to take remedial actions where necessary. Moreover, competent authorities should endeavor to carry out checks when in possession of relevant information,including substantiated concerns from third parties.
Competent authorities should keep records of the checks and the relevant information should be made available with Directive […] on public access to environmental information.
If you have questions regarding the EU TR you may address directly your national competent authority. A list of competent authorities can be found here.
What penalties will be imposed for violation of the EU TR?
The level of penalties is defined by the Member States and may differ from one Member State to another but the Regulation clarifies that penalties must be “effective, proportionate and dissuasive”. Penalties will be imposed by national enforcement authorities. Actions may include:
- Seizure of timber and timber products concerned
- Immediate suspension of authorization to trade
- Fines proportional to the damage resulting from the infringement
- The Member States shall lay down the rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented.
- The penalties provided for must be effective, proportionate and dissuasive and may include, inter alia:
- fines proportionate to the environmental damage, the value of the timber or timber products concerned and the tax losses and economic detriment resulting from the infringement, calculating the level of such fines in such way as to make sure that they effectively deprive those responsible of the economic benefits derived from their serious infringements, without prejudice to the legitimate right to exercise a profession, and gradually increasing the level of such fines for repeated serious infringements;
- seizure of the timber and timber products concerned;
- immediate suspension of authorization to trade
Penalties may be imposed on:
- If they place illegally harvested timber or timber products derived from such timber on the market
- If they fail to exercise due diligence when placing timber or timber products on the market
- If they are unable to identify the operators or traders who have supplied them the timber
- If they are unable to identify, where applicable, the traders to whom they have supplied timber
Monitoring Organisations may be liable for fines and revoked their recognition as Monitoring Organisation if:
- They fail to maintain and regularly evaluate a Due Diligence System as set out in Article 6 of the Regulation
- They fail to verify the proper use of their Due Diligence System by operators
- They fail to take appropriate action if an operator doesn’t properly use their Due Diligence System, including notification of competent authorities in the event of significant or repeated failure by the operator
Will the EU market be closed to illegally harvested timber?
The EU TR is not a border measure; it has a systematic approach and targets the behaviour of the EU operators. Therefore, customs authorities will not check shipments at their entry points. The law will be applied only when goods are released for free circulation, i.e. when they have passed custom clearance and at the moment of their placing on the market.
The Implementing Regulation on the DDS specifies how the DDS must be applied by operators:
Operators shall apply the due diligence system to each specific type of timber or timber product supplied by a particular supplier within a period not exceeding 12 months, provided that the tree species, the country or countries of harvest or, where applicable, the sub-national region(s) and concession(s) of harvest remain unchanged.
This means that operators have to apply the DDS at least once at the beginning of every 12 months’ period regardless of how many shipments they receive, providing that the supplier, the product type, the timber species and the source of timber remain unchanged during that period. If any of those elements is new, a new DD must be applied.
NB! The Commission issued a Guidance document [100 KB] [175 KB], where the term “placing on the market” is explained in detail.
What will be the role of certification & legality verification?
The EUTR recognizes the added value of Certification and Legality Verification and defines their role in the Preamble:
In order to recognize good practice in the forestry sectors, certification or other third party verified schemes that include verification of compliance with applicable legislation may be used in the risk assessment procedure.
Further it specifies in Art. 6 (b) under risk assessment that:
“ [ ... ] Risk assessment procedures shall take into account [...] relevant risk assessment criteria including: Assurance of compliance with applicable legislation, which may include certification or third-party-verified schemes which cover compliance with applicable legislation [...]”
And in Art. 6(c) under risk mitigation:
“[...] risk mitigation procedures [...] may include requiring additional information or documents and/or third party verification”.
The implementing Regulation on the DDS clarifies that in order to be used as a credible risk assessment and risk mitigation tool Certification and Legality Verification schemes must meet the following criteria:
- they have established and made available for third party use a publicly available system of requirements, which system shall at the least include all relevant requirements of the applicable legislation;
- they specify that appropriate checks, including field-visits, are made by a third party at regular intervals no longer than 12 months to verify that the applicable legislation is complied with;
- they include means, verified by a third party, to trace timber harvested in accordance with applicable legislation, and timber products derived from such timber, at any point in the supply chain before such timber or timber products are placed on the market;
- they include controls, verified by a third party, to ensure that timber or timber products of unknown origin, or timber or timber products which have not been harvested in accordance with applicable legislation, do not enter the supply chain.
In simple terms, when assessing the risk of a product, operators should take into account, amongst other things, if a product is certified (e.g. against FSC/PEFC) or legally verified (e.g. against VLC). In practice, operators may rate credibly certified or legally verified products as negligible risk of being illegal, i.e. suitable for placing on the market with no further risk mitigation measures, provided that the rest of the information gathered and the replies to the risk assessment questions do not contradict such a conclusion.
If an operator rates his products as non-negligible (e.g. low, medium or high risk) of being illegal, he could among other activities ask his supplier to get certified or legally verified to mitigate this risk.
NB! Certification & legality verification are not proof of legality like FLEGT or CITES licenses are.