Timber Regulation Q&A
1) What consists of illegal timber and illegally derived timber products?
There is no global definition of illegal timber, nor is there one universal regulation regarding timber harvesting.
Each country has its own specific regulations and tax regime for the harvest and export of wood and its derived products.
Therefore, generally speaking, illegal timber is wood that has been harvested in breech of the applicable local legislation.
The European Union Timber Regulation’s (EUTR) legality definition encompasses (art.2 .h of EU Regulation 995/2010/EC):
- 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.
The term ‘illegally derived timber products’ refers to objects made from wooden materials that were harvested in contravention to local applicable law.
The EUTR has defined a first list of products concerned by the Regulation (Annex of EU Regulation 995/2010/EC).
2) Is my company subject to the EUTR?
Many non-wood companies are not aware that they are subject to the EUTR regulation, nor do they know the applicable scope of products.
Products subject to EUTR legislation are classified as "EU Customs Combined Nomenclature" codes, and include:
- Wood (roundwood, planks, panels, veneer, etc.)
- Furniture and decorations in wooden materials
- Carpentry and wooden prefabricated buildings
- Pulp and paper (card board, stationery, etc.) that are blank, i.e. not printed with content.
- Packaging when sold as a product (not goods that are packaged, but empty packages sold as a product)
It excludes products that have completed their lifecycle (recycled products) and printed media such as books or magazines.
Some products in the scope of regulation are everyday life products (packaging, stationery, etc.) that are purchased by companies not specialized in the wood or forestry sector.
The EUTR considers these companies as operators when importing such products from outside the Europe Union.
A comprehensive list of products subject to the EUTR can be found on the EU Timber Regulation 2013 Website.
3) Who will perform regulatory controls? What types of risks and sanctions have been planned?
The EUTR is not a customs-driven regulation. This means that inspections will most likely not take place at EU borders when goods are entering the market.
A Competent Authority has been appointed in each country and will be responsible for checking operators and traders.
In the UK, the competent authority responsible for enforcing the EU Timber Regulation is the National Measurement Office (NMO), working in partnership with the Department for Environmental, Food and Rural Affairs (DEFRA)
Inspections will occur on the operator's premises, and will be based on existing documented evidence that operators have performed sufficient due diligence before placing goods on the market (i.e. customs clearance).
The 27 member states of the European Union are preparing their local penalty and inspection regimes to enforce the regulation. While penalties will be fully disclosed and will include seizure of goods, prohibition to trade and dissuasive fines or prison, the inspection plans will remain confidential.
Nevertheless, inspections will be defined on a risk-based approach. There are a number of factors which can indicate inspection priority:
- nature and magnitude of the activity
- nature and origin of goods placed on the market
- use of the Due Diligence System
- existence of 3rd party certification
4) When will checks begin?
Competent Authorities will gradually being checking operators and traders when the penalties regime will be in effect. This project is currently underway in all the EU-27 member states.
However, the EUTR has been in effect since March 3rd, 2013.Starting then, companies are required to exercise due diligence when placing products subject to the EUTR on European markets.
All information on companies’ due diligence validation is to be kept for five years. Authorities will therefore be able to check whether a due diligence validation has taken place five years after the actual assessment.
Therefore, even if no checks are expected by authorities in the coming weeks, compliance is required starting March 3rd, 2013.
The EUTR does not require certification and it cannot be considered as an automatic guarantee of conformity to the EUTR.
Nevertheless, certification will be a great asset when assessing a product’s risk of illegal origin. This has been highlighted in the Implementing Regulation 607/2012/EC and the latest guidelines from the European Commission.
Certification is therefore not sufficient for operators. Companies buying from certified suppliers need to perform additional investigation on their suppliers to assess and mitigate risks and must critically look at the certification (are the products bought within the scope of the certification? Is the certification program effective in the given country?)
We provide advantageous commercial conditions to our certified clients wishing to join our due diligence platform.
6) How does Bureau Veritas Certification help customers comply with the EUTR regulation?
Bureau Veritas Certification has developed a fully-fledged Timber Regulation Due Diligence Solution, supported by a traceability system, to enable our clients to outsource their due diligence and get the work done by our local experts.
Assessing the legality of a product requires local language skills and total knowledge of the EUTR regulation. This is the daily work of our global network of auditors.
7) What mitigation measures does Bureau Veritas Certification implement?
To lift any doubt on the illegal origin of a product, mitigation measures will be aimed at clarifying the information available and inspected field conditions.
Our due diligence system has been designed to undertake simple and cost-effective mitigation measures that are proportionate to the risks encountered:
- Additional documentary review: in the case more information can be found
- Office audit: audit at the client premises to check administration and operational practices (for processing and trading companies)
- Field audit: audit at client premises (forest)
- Risk assessment of the supplier (tier-2): in this case Bureau Veritas will contact the supplier in the local country and include it in our system.
Some of these mitigation actions imply a visit by an auditor. When this is the case, we can integrate our due diligence audit with a gap analysis or a certification audit, to help our client assess their conformity while keeping costs down.
8) Confidentiality of the system?
Our system works much like a social network. Each user of the system is able to configure the information to be disclosed to other users of the system. Bureau Veritas Certification will keep all information confidential.
9) I am a retailer with hundreds of suppliers. How are costs split within the supply chain?
Our system enables the cost of the supply chain assessment to be distributed among each user.
All companies taking part in the system will receive an assessment by Bureau Veritas. This assessment is for the supplier, and will specify the scope of products covered by our due diligence system.
Retail company suppliers will be then be valid for all of their clients, and are free to invite them into our system. Suppliers will be responsible for the cost of the individual supplier validation.
Therefore costs will remain limited, following a progressive approach based on risk.
10) How can your system benefit from regulatory checks?
Our system records all information collected during the due diligence process. All information necessary to the regulatory check will be consigned to the traceability system and will be made available in case of a regulatory check.
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