Use this to mitigate risk out of your wood supply chain

1. FLEGT
Timber pass
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Financed
by the European Union

2. Logging Transport Transformation Export The EU Timber Regulation (EUTR)
The EU Timber Regulation (EUTR) aims to entirely
Timber legality Traceability FLEGT licenses eliminate illegal timber from the European market by
All legal requirements on The supply chain is monitored to exclude timber of EU-bound shipments setting up a new culture of control and responsability
economic, environmental illegal, unknown or untrustworthy origin. checked "as legal" in the private sector.
and social aspects of the Thus allowing to track timber products from the point recieve FLEGT Facing a prohibition to place illegal timber on the
producer country that of harvest to the point of export. It also deals with licenses. market, operators – importers and European loggers –
must be met. imported timber products and mixing of legally verified If they are bound
must exercise due diligence, meaning they must
timber with other sources of timber. Existing private elswhere, they are
certification schemes can be taken into account. traded without a make sure timber and timber products are legal
license*. together with their supply chain.
This regulation applies from 3 March 2013.
Checks
Checks allow to verify that requirements for legality and for traceability are met. They can be
undertaken by the administration of the producer country, by a market player, by a third party or
by an association of those various players. Any private certification scheme used (OLB, TLTV, FSC,
PEFC, etc.) can, if it is recognized by the producer country’s Government, provide for simplified
checks of certified companies.
Any operator of a VPA signatory producer country who would place timber shipments on the
market found to be illegal would be sanctioned by the administration of that country regardless *Note: In the EU, customs shall syste-
matically reject timber coming from a
of the destination of those shipments (local, regional or international markets).
VPA country without a FLEGT license.
Independant audit
The independant audit gives assurance to all involved parties that the legality assurance system (LAS) works. To that end, a complaint
mecanism will be set up and missions to verify the four pillars of the LAS (legality, traceability, checks and FLEGT licenses) carried out.

3. The European Union fights The EU Timber Regulation (EUTR)
illegal timber The EU Timber Regulation (EUTR) aims to entirely
eliminate illegal timber from the European market by
In May 2003, the European Commission (EC) setting up a new culture of control and responsability
published its FLEGT Action Plan – Forest law in the private sector.
enforcement, governance and trade. Facing a prohibition to place illegal timber on the
Its aim is to combat illegal logging and its market, operators – importers and European loggers –
associated trade. must exercise due diligence, meaning they must
Among the seven folds of this European action make sure timber and timber products are legal
plan, two stand out. together with their supply chain.
This regulation applies from 3 March 2013.
The voluntary partnership
agreement (VPA)
Consultation with all stakeholders of the timber
sector in willing producer countries materialises
by signing a FLEGT voluntary partnership
agreement (VPA).
It guarantees that any timber product listed in the
agreement meets the bulk of legal requirements
and regulations in force in the producer country.
To meet this objective, the VPA implies setting up
national measures for transparency, governance,
timber sector reforms, etc.
The VPA relies on its legality assurance system
(LAS) which includes export authorizations.
Since the requirements of an agreement are agreed
on at the national level, they must be met by all
forest operators of the signatory country.

4. State of play on voluntary partnership agreements (VPA)
FLEGT progress worldwide
 Member States of the European Union driving the
FLEGT Action Plan
 Countries taking part currently developing the VPAs
 Countries taking part currently negociating VPAs
 Countries taking part currently pre-negociating VPAs
2000 km
FLEGT progress in Africa
2014 2012 2014
2012
Six countries are currently developing the systems agreed under  More advanced VPA countries
a voluntary partnership agreement (VPA) and four countries are (agreement ratified): Ghana 2012
negociating to that end with the EU.  Advanced VPA countries (agreement
initialed or signed): Congo, Cameroon,
Central African Republic and Liberia
Besides, FLEGT information missions have been carried out in 15  VPA process ongoing (negociation
countries in Africa, Asia and central and latin America that have ongoing): DRC, Gabon
expressed an interest for a VPA.  VPA Pre-negociation phase: Ivory Coast,
Sierra Leone
. 2012 First licenses issued
The process of establishing 500 km
Voluntary Partnership Agreements
Building Bilateral Agreement System Implementation
a consensus negociations ratification development
in the country • Negociations with the EC • VPA initialed • Tracking systems • FLEGT licenses issued
• Informing stakeholders on the text of the VPA and its • VPA signed and ratified in improved/created
• Checking systems
• Creating a structure for Annexes the producer country and • FLEGT licensing functioning
discussions • Negociations among the EU system set up
• Timber controlled at
• Debatting andsystems in country
analyzing
stakeholder groups in the • Independant auditor the EU borders
selected
• Negociations within
legality, tracking
the country...
stakeholder groups
• Joint Committee
meetings

5. The EU timber regulation (EUTR) Terms to remember
Three obligations placed on the private sector Legal timber is timber that has been harvested
The EUTR aims to fight illegal timber trade by acting in accordance with the laws of the harvesting
on the European demand for timber products. country.
This regulation : A placer on the market is a natural or legal per-
1 prohibits placing on the market of illegal timber and son that sells timber or timber products for the
timber products in Europe, first time on the EU market, named operator in
2 sets a requirement to exercise due diligence for Euro- the EUTR.
pean placers on the market,
3 imposes identification of their supplier(s) and buyer(s) (exclu- A trader (in the EUTR) is a natural or legal person
ding individuals) on all traders who sells or buys timber and timber products,
already placed on the market
A worldwide coverage
The regulation applies regardless of timber origin, EU
or non-EU, to the bulk of timber and timber products
excluding recycled materials, rattan and bamboo as Specific authorizations
well as printed materials. Products accompanied by a CITES permit or a FLEGT
license are considered legal: they are already sub-
Entry into force ject to specific control procedures in the producer
countries and when being imported into the EU.
The EU timber regulation (EUTR) applies from
3 March 2013. Thus, European importers are encouraged to buy tim-
ber accompanied by a FLEGT license.
More detailed rules are currently being set
up at the European level and will be available *The Convention on international trade in endangered species
from June 2012. of wild fauna and flora (CITES), signed in Washington the 3rd of
March 1973 has entered into force on the 1st July 1975.

6. Due diligence: making sure timber
and timer products are legal The due diligence system
Operators - importers and European loggers – are re- Implementing due diligence follows three basic steps.
quired to make sure timber and timber products are
legal by a due diligence system.
1 Gathering information:
Any European operator must gather information on the
Who exercises due diligence ? species, the place of harvest and on the legality of the
product.
Operators can set up this system on an individual
basis or with the help of a monitoring organization: 2 Riskanalysisofillegality:
body that sets up a due diligence system and verifies
Based on this information, he must analyse the risk of illegality.
its proper use by operators (criteria and procedures
for recognition laid down at the European level). Possible risks
«Conventional» products No risk or negligible risks
I carry out risk 1. CITES permits
analysis… (see slips) or FLEGT licenses
Placing on the market OK
Towards a new culture for exercising care 2. Products with a certifcate of legality or of sustainable
The EUTR does not aim to check every single piece of forest management compatible with the EUTR
timber and does not add new customs inspections Placing on the market  YES BUT remain alert
at the border. It aims more at developing a new
common culture for exercising care before any
purchase of timber or timber products. 3 Implementing risk mitigation measures
To secure commercial activities, operators have to After risk analysis the operator must take appropriate mea-
work beforehand with their suppliers to increase sures to avoid illegal timber.
transparency and durably ensure trustworthy
purchases.
Checks and sanctions
Each Member State of the European Union will carry
out appropriate checks of European operators ac-
companied by dissuasive sanctions that may include,
inter alia: fines, seizures, suspensions of activity…
If checked, operators will have to demonstrate that
they exercise due diligence properly. They must
provide access to informations on their products and
account for risk management of illegality.

7. Fighting illegal logging in other
countries around the world
USA, Lacey Act, since 2008
The Lacey Act, an American law protecting natural ressources
has been amended in 2008 to prohibit possessing and trading
of illegal timber. A customs declaration form has to be filled
indicating the species, the quantity and the harvesting country
of imported timber and timber products.
http://www.aphis.usda.gov/plant_health/lacey_act/
Switzerland, forest law, since 2010
It is compulsory to declare the origin and the type of timber
offered for sale in Switzerland since October 2010. The
implementation of this requirement will strech to end 2011
and only applies to logs and round wood as well as to certain
products made of solid wood.
Australia, Illegal Logging Prohibition Bill,
being discussed
A law aiming at fighting illegal logging is being discussed in
Australia since end-2010. Very close to the EUTR, it would pro-
bably require importers to analyse the risk of illegality prior to
any placing on the market.
http://www.daff.gov.au/forestry/international/illegal-logging
Usefull Websites
• The European Commission has a series of briefing
:
notes on the FLEGT Action Plan
http://ec.europa.eu/europeaid/index_en.htm
• The EuropeanFLEGT Action Plan: www.euflegt.efi.int
forest institute (EFI) has a dedicated
Website for the
• The ATIBT has a dedicated web space for the FLEGT
Action Plan: www.atibt.org

8. Slip n°1 : Exercise due diligence
What is certified wood?
As a whole, "certification allows to give assurance that a
product, a service or a procedure has been made-ren-
dered-carried out according to agreed standards".
Sustainable forest management (SFM) certificates
NO Certification for SFM is twofold, giving the firm’s clients
the guarantee that:
1. its products originate from forests under sustai-
nable forest managment according to a standar-
NO
dized system of « forest management » (FM);
2. they can be tracked from source thanks to the «
Risk evaluation needed (see slip n°2) Chain of Custody » (CoC).
FLEGT license Please note: Main certifying schemes for SFM (FSC,
EU-bound shipments meeting the requirements of the PEFC...) have readily available information on certified
legality assurance system (LAS) agreed upon under the firms and products on their Website.
voluntary partnership agreement (VPA) with the producer
country are accompanied by a FLEGT license. Legality certificates
Legality certificates attest that loggers meet the
CITES permit legal requirements of the producing country.
The Convention on international trade in endange- These legality certificates are generally a first step
red species of wild fauna and flora (CITES), signed in towards SFM certification.
Washington in 1973 and into force since 1975, esta- In the Congo Bassin, the three main systems are
blishes three lists (called Appendices I, II and III) of fauna SGS (TLTV), BUREAU VERITAS (OLB) and to a lesser
and flora species with various degree of protection. extent SMARTWOOD (VLO).
To import products made of CITES listed species for
which trade is permitted you are required to hold a
CITES import permit.
Please note: This permit is only delivered upon showing
the original CITES export permit issued in the producer
country.
Besides, trade in species listed in Appendice I (or A) is
strictly forbidden.
Timber pass - Slip n°1 : Exercise due diligence - September 2011 Timber pass - Slip n°1 : Exercise due diligence - September 2011

9. Slip n°2: Manage the risk of illegality
Which mitigation measures?
If the initial evaluation (see slip n°1) of the product’s
documentation indicates a non-negligeable risk, you
must :
1. carry out an evaluation of the risk of illegality;
2. take mitigation measures for this risk . •
Risk evaluation •
Watch over UNSC or EUC sanctions on timber trade
Is the country under
sanctions?
•
YES
Watch over the supply chain
NO
Are some companies
involved in illegal
practices? YES
Watch over illegal timber trade (harvesting country, species)
NO
Is there a link with illegal
•
timber trade?
YES
NO •
Reconstructing the supply chain
Is the supply chain Are they unidentified •
more complex steps in the supply chain?
than needed? YES YES
NO Examining documents on legality NO
•
Are all documents Are the major documents
made available by the made available?
supplier? NO NO
YES Watch over the country corruption level (CPI ) YES
Is the CPI Index Is the CPI Index
over 3? over 2?
NO NO
•
YES YES
Low risk Medium risk High risk
•
Please note : Since 1995, the NGO Transparency
International publishes each year an index on corruption’s •
perception (CPI) in various countries. This NGO envisages
to publish a specific index for the forest sector.
Timber pass - Slip n°2 : Manage the risk of illegality - September 2011 Timber pass - Slip n°2 : Manage the risk of illegality - September 2011