Etifor 7 1 εν by GEORGE DIAMANDIS

European Union Timber Regulation (EUTR) 7.1 The aim of this material is to provide foresters and other stakeholders interested in European timber market with basic knowledge of EU Timber Regulation and other tools and initiatives to counteract illegal logging and placing illegal timber (domestic as well as imported) in the EU market.

CONTENTS Background concepts ........................................................................................................................................ 3 1. Illegality in the forest sector .......................................................................................................................... 4 1.1 European responsibility in forest illegality .............................................................................................. 5 1.2 Consequences of illegality in the forest sector ....................................................................................... 7 1.3 Tools to counteract illegality ................................................................................................................... 7 2 FLEGT Regulation and VPA: insights ............................................................................................................... 8 2.1 The Regulation 2173/2005 ...................................................................................................................... 8 2.2 Legality verification systems.................................................................................................................. 10 3 Regulation (EU) 995/2010: EU Timber Regulation ....................................................................................... 12 3.1 EUTR: general aspects ........................................................................................................................... 12 3.2 EUTR: main actors ................................................................................................................................. 13 4 Due Diligence System ................................................................................................................................... 20 4.1 Components of the Due Diligence System ............................................................................................ 21 4.2 Competent Authorities in Italy .............................................................................................................. 22 4.3 Generality .............................................................................................................................................. 22 5 Risk assessment ............................................................................................................................................ 23 5.1 Risk assessment criteria......................................................................................................................... 23 5.2 Illegality risk in relation to the country: conflicts .................................................................................. 26 6 Risk mitigation .............................................................................................................................................. 29 7 Current state of implementation ................................................................................................................. 32 8 EU TR and FSC Certification .......................................................................................................................... 32 REFERENCES ........................................................................................................................................................ 39

Background concepts Regulation (EU) 995/2010: EU Timber Regulation (also known as the â&#x20AC;&#x201C; Illegal - Timber 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. The Regulation lays down the obligations of operators who place timber and timber products on the market. It counters the trade in illegally harvested timber and timber products through three key obligations: a) it prohibits the placing on the EU market for the first time of illegally harvested timber and products derived from such timber; b) it requires EU traders who place timber products on the EU market for the first time to exercise 'due diligence'. Once on the market, the timber and timber products may be sold on and/or transformed before they reach the final consumer. To facilitate the traceability of timber products economic operators in this part of the supply chain (referred to as traders in the regulation) have an obligation to c) keep records of their suppliers and customers. The Regulation covers a wide range of timber products listed in its Annex using EU Customs code nomenclature. The application of the Regulation will start from the 3rd of March 2013 to allow sufficient time for EU operators, timber producers and Member States, as well as trading partners, to prepare. During this period the Commission will adopt more detailed rules. Further material contains basic facts of EU Timber Regulation but also other tools and initiatives to counteract illegal logging and placing illegal timber (domestic as well as imported) in the EU market divided into seven chapters: 1. 2. 3. 4. 5. 6. 7.

European Commission main initiatives to tackle illegal logging FLEGT Regulation and VPA Regulation (EU) 995/2010: EU Timber Regulation Due Diligence System Risk assessment Risk mitigation Current state of implemetation

1. Illegality in the forest sector "Illegal logging takes place when timber is harvested, transported, bought or sold in violation of national laws" (Brack & Hayman, 2001). Some data on Illegal logging Every two seconds, across the world, an area of forest the size of a football field is clear-cut by illegal loggers, leading to the degradation and possible eventual destruction of five million hectares of forests each year. In some countries, up to 90% of all the logging taking place is illegal. Estimates suggest that this criminal activity generates approximately US$10–15 billion annually worldwide—funds that are unregulated, untaxed, and often remain in the hands of organized criminal gangs. The illegal logs still being cut each year, laid end to end, would stretch ten times around the Earth (World Bank, 2012). Insights on deforestation and forest degradation:  http://www.chathamhouse.org/sites/default/files/public/Research/Energy,%20Environment%2 0and%20Development/0913pr_deforestation.pdf  http://www.isprambiente.gov.it/it/pubblicazioni/rapporti/deforestazione-e-processi-didegrado-delle-foreste

According to Interpol data 1 (INTERPOL Environmental Crime Programme, 2012): o Illegal logging accounts for the 50-90% of the volume of the main tropical countries and 1530% of all timber traded internationally; o 11 billions $/year of illegal profits come from the sale of timber. More than 90% of certified forests are in North America and Europe, while most of the illegal activities in the forestry sector continue to be implemented in tropical forests like the Amazon Rainforest and forests of Central and South-East Asia.

clic on the link to watch the video!

http://www.youtub e.com/watch?v=zZ7 aUoAUe_E

http://www.youtube. com/embed/w9MDZ7 LVxC4?rel=0

Interpol is the world’s largest international police organization, with 190 member countries.

As we can deduce from Tab. 1, illegal logging exceeds the legal one in many tropical countries. Tab. 1 Percentage of illegal logging on the total forest withdrawals in some tropical countries (Interpol, 2012). Country

% of illegal logging on the total forest withdrawals

Bolivia

Brazil

20 - 47

Colombia

Ecuador

Peru

Cameroon

Gabon

Ghana

Indonesia

70 - 80

Laos

Malaysia

Up to 35

Myanmar

Papua Nova Guinea

Thailand

Vietnam

20-40

Cambodia

Indonesia

70 - 80

Laos

1.1 European responsibility in forest illegality In 2008, the European Union imported 30 million cubic meters of illegal timber (between 16 and 19%) (Hirschberger, 2008). o At least 23% of the wood-based products, which are imported into the European Union from Eastern Europe, probably come from illegal sources; o On average 40% (9.5 million m3 RWE) of the wood-based products, which are imported into the European Union from South-East Asia including China, probably originate from illegal logging; o On average, 30% of the wood based products imported from Latin America come from illegal sources. Brazil is the third most important country for exports of wood products into the EU, far ahead of other Latin American countries; 5

o The illegal share of wood products from Africa to the EU can be estimated at a minimum of 36% based on those African countries where the scale of illegal logging is known. If all African countries in which illegal logging takes place are taken into account, up to 56% of wood products imported from Africa may come from illegal or suspicious sources;

Fig. 1 Import flows of illegal timber towards the European Union (WWF, 2008).

In Italy In Italy 80% of the national demand comes from abroad. A conservative estimate made by the Institute for the Protection and Environmental Research (ISPRA, 2009) quantifies the illegal wood imported from Italy in a share of between 7 and 10% of total imports. Italy as an Important commercial actor: 2nd European importer 1st Partner of Cameroon, Ivory Coast, Romania, Bosnia, Albania and Serbia 1st Importer of firewood 4th Importer of wood chips and waste 6th Largest importer But illegality is not only in the import; the presence of undocumented workers in the total employment in the industry "Agriculture, forestry and fishing" varies widely from region to region, recording a maximum of 50% in Calabria and a minimum of 18.6% in Tuscany (National Institute of Statistics, ISTAT). 6

Other EU countries

Fig. 2 major importers of illegal wood into the EU (Hirschberger, 2008).

1.2 Consequences of illegality in the forest sector o Illegality in the forest sector is often linked to criminal activities involving corruption, violence and money laundering; o Revenues from illegal logging often finance armed conflicts (Liberia, Congo); o Loss of revenue for producers (from taxes 10 billion $/year); o The spread of illegal timber at low cost (from 7% to 16% less) blocks the improvement of forest management practices; o Distortion of the market (law firms disadvantaged).

1.3 Tools to counteract illegality -

Command and control: forestry legislation on cuts, concessions, CITES; LEGISLATION

PURPOSE

U.S Lacey Act

Tackling illegal trade in timber, plants and wood products

EUTR

To counter the trade of illegally harvested timber and timber products on EU market

LINK http://eia-global.org/lacey/ http://eurlex.europa.eu/LexUriServ/LexUriServ.do? uri=OJ:L:2010:295:0023:0034:EN:PDF

Prohibits both the import of http://www.illegalAustralian Illegal Logging illegally logged timber and the logging.info/sites/default/files/uploads/T processing of illegally logged raw RAFFIC_CITES.pdf Prohibition Act logs. Table 2: examples of command and control tools to counteract illegality.

Voluntary membership: FM and CoC certification (e.g. PEFC and FSC), legality verification systems (http://www.rainforest-alliance.org/forestry/documents/lvs-assessment.pdf), codes of ethics, best practices; 7

Mixed: frame of reference defined by public institutions, application date by NGOs and other organizations.

2 FLEGT Regulation and VPA: insights

Voluntary Partnership Agreement The FLEGT Action Plan includes seven main fields of action: o support for timber-producing countries, often located in poor tropical areas; o the development of activities related to legal trade in timber (FLEGT Voluntary Partnership Agreements); o the promotion of policies of public assistance; o support for initiatives carried out by the private sector; o safeguarding financial investments, the use of existing legislative instruments or adoption of additional legislation; o combating the specific problem of "conflict timber".

2.1 The Regulation 2173/2005 The first concrete result of the Action Plan is the Regulation (EC) No. 2173/2005 on the establishment of a licensing system (FLEGT) for imports of timber into the European Community, whose details are contained in Council Regulation (EC) n. 1024/2008. The Regulation No. 2173/2005 provides for the signing of bilateral agreements between the volunteers and the European Commission (on behalf of all member countries) and exporting countries for which only timber harvested legally, in accordance with the legislation of the producing country, may be imported into the EU.

Voluntary Partnership Agreement 8

It consists of: o Bilateral agreements EU-third country o Voluntary, but once signed they are binding o They Include:  Definition of legal wood  Legality verification  Products traceability from the forest to the export  Licensing scheme (guarantee to the importer’s market)  Indipendent systems of control of the mechanism FLEGT licenses FLEGT licenses are based on systems that guarantee the legality and reliable tracking of timber and timber products exported from partner countries, provided that these systems have been assessed and approved in accordance with certain procedures in order to provide the necessary guarantees concerning the legality of the considered products.

Fig. 3 http://www.euflegt.efi.int/portal/

Fig. 4 map of the status of the VPA/FLEGT countries

2.2 Legality verification systems

Fig. 5: steps of the FLEGT legality verification system. 10

Example of form for FLEGT license

Fig. 6 : Embassy of Indonesia in the Netherlands

Verification of licenses in Europe Each Member State has designated a responsible authority for: o verifying FLEGT licenses to the presentation of the customs declaration for release for free circulation in the EU; o recording in electronic or printed format the FLEGT licenses and customs declarations; o allowing the EC and other persons entitled to access to documents and data; o checking the loads according to a risk analysis approach; o asking the authorities of the harvesting countries further investigation and clarification in cases of doubt; o obtaining by the EU detailed information on the Authorities involved in the various countries and the related procedures, documents, authenticated specimens; o Sending to EU an annual report stating: - the amount of FLEGT material/products imported; - the number of FLEGT licenses received for heading, for each partner country; - the number of cases and quantities of wood detected, that are inconsistent with FLEGT. FLEGT and EUTR are related regulations and - to some extent complementary - because timber with FLEGT license is considered "legal". Compared to the FLEGT Regulation, EUTR applies to: o a list of products uniquely defined for all countries; 11

o even to wood cut within the EU.

3 Regulation (EU) 995/2010: EU Timber Regulation 3.1 EUTR: general aspects Regulation 995/2010 of 20 October 2010 "Obligations of operators who place timber and timber products on the market" (Official Journal 12 December 2010), prohibits the placing on the EU market of illegal timber or derived timber products. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32010R0995:EN:NOT Which products? Annex to Regulation 995/2010 (Regulation (EU) 1006/2011 http://ec.europa.eu/environment/eutr2013/index_en.htm Timber or derived timber products:

Some products are excluded: o o o o o

excluding cap. 49 (printed paper) (Regulation (EU) 995/2010 art. 20, 4), excluding cap. 96 19 00 (sanitary paper products), excluding cap. 92 (tools), 95 (toys) except recycled products pursuant to art. 3, par. 1, Dir 2008/98/EC on end-of-life products excluding packaging (packaging material containing merchandise and used solely to support, protect or carry another product); 12

EUTR and illegality Products of illegal origin are products harvested in breach of the legislation applicable in the country of harvest. (Regulation (EU) 995/2010, art. 2, => (h) "applicable legislation" means the legislation in force in the country of harvest covering the following matters: o rights to harvest timber within legally gazetted boundaries, o payments for harvest rights and timber including duties related to timber harvesting, o timber harvesting, including environmental and forest legislation including forest management and biodiversity conservation, where directly related to timber harvesting, o third partiesâ&#x20AC;&#x2122; legal rights concerning use and tenure that are affected by timber harvesting, o trade and customs, in so far as the forest sector is concerned. Legislative framework

Fig. 7 legislative framework for the implementation of EUTR.

3.2 EUTR: main actors Actors involved (with different roles and obligations): European Commission Operators Traders Competent Authorities (individual Member States) Monitoring Organizations

The levels involved in the Regulation

Operators = natural or legal persons who place timber or timber products on the market. Trading ď&#x192; 3 key requirements 1. Product that is physically present on the domestic market 2. Entered for the first time 3. Part of a commercial activity

Obligations for the purposes of EUTR: • Define, implement and maintain a system of Due Diligence (DD) • Individually or by adopting the DD system developed by a Monitoring Organization (MO)

recognized by the EC • Registration traders to which the wood is sold (register load/unload, tax bills, DDT...) • Storage of documents: 5 years • Facilitate sample checks of the Competent Authority. Traders = Natural or legal persons who, in the context of a commercial activity, buy or sell timber and timber products already on the market.

To avoid imposing unnecessary administrative burdens, it is appropriate that only operators that trade for the first time wood and derived products on the domestic market should be subject to due diligence system....traders are required to provide basic information on their suppliers and buyers to enable the traceability of timber and timber products on the market (Regulation 995/2010).

Obligations for the purposes of EUTR • Identification and registration (register load/unload tax invoices,...):

o Traders/merchants from whom wood/products were purchased (identify the role) o Traders to whom wood/wood products were sold (exception: consumers) 15

• Storage of documents: 5 years

Traders provide information, upon request, to the Competent Authorities.

Monitoring Organizations A DD system can be implemented: - independently by operators large enterprises, with sufficient human and financial resources to - with the support of an Inspection Body especially enterprises (< resources, < supply chain control) Functions and responsibilities of Monitoring Organizations: • maintain and evaluate DD systems and confer the right of use for the operators • verify the proper use of DD systems by operators • intervene in case of misuse of the DD systems

Characteristics of Monitoring Organizations (Reg. (EU) 363/2012): • legal personality and legally established in the EU • appropriate skills and able to perform the functions assigned • absence of conflicts of interest

Recognition of Monitoring Organizations: by the EC (public register on the Official Gazette and on the web).

Competent Authorities o Each Member State shall designate one or more Competent Authorities (CA) o In Italy: Mipaaf => CFS (DM 27 December 2012) o Responsible for the application of the Regulations, in particular the periodic monitoring: Operators 16

Traders Monitoring Organizations (at least every 2 years) o Random testing (=> documents, records, operating sites ...) also reports of third parties o If you found non-compliance => corrective measures and sanctions: administrative merchandise seizure suspension/revocation of license o We currently lack a more precise reference at national level An example: EUTR sanctions in the UK (www.defra.gov.uk/consult/2012/12/27/timber-regs2013/) o “Timber and Timber Products (Placing on the Market) Regulations 2013”, bill with public discussion; o sanctions:  Up to 5,800 Euro for minor non-conformities (eg. lack of cooperation/obstruction, failure to record information...);  Up to 2 years imprisonment or fines of entities at the discretion of the authorities for placing illegal timber on the market. The tasks of the European Commission are the following: o the publication and updating of a list of Competent Authorities; o recognition or whether to revoke, after consultation of the Member State or Member States concerned, the Monitoring Organizations; o the report, every two years, to the European Parliament and the Council on the implementation of the " EUTR Regulations". The role of forest owners and forest companies Three possible situations depending on the role, different obligations (complexity and presumably – costs).

Fig. 8 definitions of the three parties involved in timber trade. 17

Summarizing:

General EUTR scheme:

Example 1:

Example 2:

Example 3:

Example 4:

4 Due Diligence System The core of the 'due diligence' notion is that operators undertake a risk management exercise so as to minimise the risk of placing illegally harvested timber, or timber products containing illegally harvested timber, on the EU market. The three key elements of the "due diligence system" are: o

Information: The operator must have access to information describing the timber and timber products, country of harvest, species, quantity, details of the supplier and information on compliance with national legislation. Risk assessment: The operator should assess the risk of illegal timber in his supply chain, based on the information identified above and taking into account criteria set out in the regulation. Risk mitigation: When the assessment shows that there is a risk of illegal timber in the supply chain that risk can be mitigated by requiring additional information and verification from the supplier.(http://ec.europa.eu/environment/forests/timber_regulation.htm)

4.1 Components of the Due Diligence System

Cutting declaration The cutting declaration is an official document that must be compiled by the forest company or the private, before any cutting is done in the forest. The declaration contains detailed qualitative information about the forest in which the cutting must take place, but also information about the quantity of wood withdrawal. Computerized declaration of forest cutting: o regional map services (CRS) o data of the executor of the cut; o cadastral data (number of sheet and cadastral maps) of the wood to be cut, o the list of wood species to be cut, o the surface of the forest affected by the cut, o a map showing the cutting zone; o woody mass (in cubic meters) to be cut through the high forest and if available the wood mass (in kilograms) to be cut for coppices, a technical annex if the cutting exceeds 2 hectares, the location of any cable crane plants. Computerized declaration of forest cutting: o the "cutting report" for all the cuts in forests included in the Forestry Management Plan (FMP), o the "cutting project" for cuts (excluding those in areas prone to FMP): - 6 hectares if the executor of the forestry activities is a company recorded in the regional register; - 2 hectares in other cases.

4.2 Competent Authorities in Italy

MATTM = Ministry of Environment, the Protection of Territory and the Sea; MAE = Ministry of Foreign Affairs; CFS = State Forestry Corps; OOCC = Collegiate Bodies; CCAA = Competent Authorities

4.3 Generality 3 main phases of a DD system: • Collection of information • Risk analysis • Risk mitigation

 Each operator applies the system of DD in each specific type of wood or wood derived product, coming from a particular supplier  DD Validity: 12 months provided that species, products, countries (regions and subnational) of origin remain unchanged  information must be available for each batch of wood/products marketed. Collection of information Description (trade name, product type, wood species) 22

Wood species => botanical name if the common name is ambiguous: ď&#x192;&#x2DC; Es (1). Mahogany: Swietenia spp. vs. Entandrophragma spp. vs. Khaya spp. ď&#x192;&#x2DC; Es (2): Cedar: Calocedrus spp. vs. Chamaecyparis spp. vs. Cunninghamia spp. Country of harvest (where the wood is taken in the forest) Sub-national region/forest concession => if the regulatory framework and risk illegality vary within a country. Quantity (volume, weight or n. of units) Name and address of the supplier of the operator Name and address of the trader/s (customers of the operator) Documents or information demonstrating compliance of the material with the applicable legislation. Example of documents/evidence of compliance

Fig. 9 examples of requirements and evidences of compliance. The list of documents is not fixed, nor exhaustive, being left to the discretion of each operator and to the specificities of each case

5 Risk assessment In the phase of risk assessment the operator analyses and evaluates the risk that illegal timber or timber derived products are placed on the market (Reg. 995/2010, Art. 2, paragraph 1b). The procedures take into account the information gathered and risk assessment criteria.

5.1 Risk assessment criteria o Assurance of compliance with applicable legislation; o Risk of illegality in relation to the species (CITES, IUCN); 23

o Risk of illegality in relation to the country (CPI, conflicts), o UN/EU sanctions on import/export of wood; o Complexity of the supply chain Respect of applicable legislation o Knowledge of the relevant regulatory framework in the country/countries of harvest of timber; o Ability to retrieve information/evidence of compliance with these regulations.

Fig. 10 http://www.canadawooduk.org/european-timber-regulation-summary.php

Fig. 11 http://www.legal-timber.info/en/flegt-eutr.html

In addition to the information described above you can use assessment and risk mitigation tools on a voluntary basis: - Forest Certification - Verification of legality of origin.

5.2 Illegality risk in relation to the country: conflicts “Conflict timber” is a term used to describe timber that is produced and sold to finance armed conflict. The definition used by the NGO Global Witness is “timber that has been traded at some point in the chain of custody by armed groups, be they rebel factions, regular soldiers, or the civilian administration, either to perpetuate conflict or to take advantage of conflict situations for personal gain” (http://www.globalwitness.org/news-and-reports)

Fig. 12 map of the countries affected by “conflict timber”.

Corruption Given that logs are large and need infrastructures to be cut, transported and sold, illegal logging can only survive with the connivance of many people. Thus, corruption plays a key role!

Fig. 13 corruption index in relation to the percentage of suspicious log supply http://siteresources.worldbank.org/EXTFINANCIALSECTOR/Resources/Illegal_Logging.pdf

Such corruption can be high-level: politicians can decide who gets land concessions, give contracts to friends and relatives, or allow logging without appropriate permits. But even low-level officers can turn a blind eye to trees being cut, or ignore illegal transport (Panjer, Magrath, Greenberg, & Goncalves, 2012).

Fig. 14 map of the corruption perception in the world. http://www.transparency.org/cpi2012/results

UN/EC sanctions The United Nations and Interpol have joined forces to tackle global forest crimes such as illegal logging and timber trafficking. Working with local enforcement agencies, the partnership hopes that the scheme will be able to take on some of the biggest problems facing the poorest nations.

Complexity of the supply chain o Each operator must be able to reconstruct (in a documented way) the supply chain o > Complexity > risk o Importance of the COC

6 Risk mitigation To be implemented in cases where the risk is not negligible. Examples of actions: • Collecting more information (document) • Collecting evidence in the field • Preference providers with more guarantees (eg. FSC certificates) • Exclusion of supplies from countries/species at risk

Fast tracks Are automatically considered legal, materials/products holding: - FLEGT licenses (currently only includes Indonesia C. 47 and 48) - CITES Certificates FLEGT licenses Voluntary partnership agreements (VPAs) ensure through Legality Assurance Systems (LAS) that timber being exported to the EU is legally produced. The legal source and production of wood will 29

be verified by the partner country, which will award a “FLEGT” license to each consignment that is verified as legal. Once the LAS is in place and has successfully passed an independent evaluation, the EU will only accept FLEGT licensed timber from that country (Greenpeace, 2008).

Fig. 15 products included in VPA-FLEGT and products included in the scope of Regulation 995/2010.

CITES CITES works by subjecting international trade in specimens of selected species to certain controls. All import, export, re-export and introduction from the sea of species covered by the Convention has to be authorized through a licensing system. Each Party to the Convention must designate one or more Management Authorities in charge of administering that licensing system and one or more Scientific Authorities to advise them on the effects of trade on the status of the species (Chen, 2006). o Washington Convention on International Trade of Endangered Species of wild fauna and flora threatened with extinction; o Relatively small number of woody species of commercial interest; o In the first months of 2013 there has been an increase in CITES licenses in the European market (EU-FLEGT Committee , May 2013). By crossing public information on (a) the supervision inspections conducted by the Supervisory Body for Forest Resources and Wildlife (OSINFOR for its Spanish initials), on a series of timber concessions with (b) the documentation for CITES export permits for cedar and mahogany, EIA identified more than 100 shipments containing illegally logged CITES wood that were exported to the US between January 2008 and May 2010 – that is more than 35% of all such shipments with CITES with CITES permits that left Peru for the US during this period. Peru’s primary exporter, Maderera Bozovich, exported shipments under 152 CITES permits during this time, at least 45% of which included wood of illegal origin. It is likely that more supervision in the field would discover that these 30 percentages are actually higher (EIA, 2012). http://www.eia-international.org/the-laundering-

Fig. 16 example of CITES certificate.

7 Current state of implementation In general, owners and logging companies should face fewer difficulties than importers (shorter supply chain, direct access to information, familiarity with the context ...). In substance they must respect the current regulations. There are more burdens on operators and fewer difficulties for traders. Is it an opportunity to revitalize forms of associations and networks of operators? There are some relevant aspects (eg. regularity/job safety) left on the sidelines by the Regulations. The implementation of EUTR presents a framework of great uncertainty because of… • Innovative character of the Regulation • Late reaction of the institutions at the national level (top-down)

Is the system ready to work? Regulation approval: October 2010 => entry into force: the 3rd March ,2013. Only 5 of the 27 EU member states have completed the process of procedure for the appointment and the activation of the Competent Authorities: UK, NL, DE, DK and LUX (EU FLEGT Committee, meeting of 16 May 2013). Currently no Monitoring Organizations has been recognized by the European Commission (first awards expected by summer 2013) => 5 Organizations waiting to get recognition for work (even) in Italy: NEPCon, SGS, Control Union, ConLegno and Icila. Costs Difficult to make a preliminary estimate (lack of similar experiences, big variety of situations): • preparation/adaptation (by March 3, 2013),

maintenance/updating of the system, • closing non-compliance • Possible sanctions •

Could it be an added value for the businesses? Only if it is integrated into a broader strategic review of the industry, with the active involvement of all actors ... otherwise it will be an expensive maintenance of the status quo.

8 EU TR and FSC Certification Forest Stewardship Council (FSC) FSC is a global, multi-stakeholder, not-for-profit organisation dedicated to the promotion of responsible forest management worldwide in order to meet the social, ecological, and economic rights and needs of the local and global communities and stakeholders. To achieve this FSC 32

facilitates the development of standards, ensures monitoring of certified operations and protects the FSC trademark so consumers can choose products that come from well managed forests. The organization members (more than 900 so far) include some of the world’s leading environmental NGOs (WWF and Greenpeace), businesses (Tetra Pak and Mondi PLC) and social organizations (the National Aboriginal Forestry Association of Canada), as well as forest owners and managers, processing companies, and individuals. So far, FSC counts on 159.798 forest million ha certified in 80 countries and on more than 23,807 Chain of Custody certificates released in 107 countries along the value chain of forest products (wood, paper and non timber forest products). More information at: www.fsc.org FSC meets the criteria defined by article 4 of Regulation (EU) 607/2012. Changes have been made to adapt FSC system to the requirements of EUTR (and similar regulatory systems in the U.S. and AUS): o Additional information notes o Ad hoc Instruments Additional information notes Product description  Trade name  Product type  Wood species Country of harvest (and, if applicable)  Sub-national region  Concession of harvest Name and address of the supplier/customer (dealer) Documents / information demonstrating compliance with the applicable legislation FSC-DIR-40-004-40-ADVICE 004-10 o Obligation for organizations certified to provide upon request information on wood species and origin of the products included in the EUTR o Modes and frequencies to be agreed with clients o Need to "trace" the COC, collaborating with suppliers Compliance with applicable legislation Legality = basic FSC requirements FSC-DIR-40-004 ADV-11 33

Companies with FSC certification exporting or importing wood and wood products must adopt procedures to ensure compliance with applicable laws and trade and customs (in the country of business).

Analysis and mitigation of risk Minor components (MC) FSC-DIR-40-004 ADV-09 From 1 January 2013: Obligation to indicate on the invoice/delivery note the amount of minor components even if <1% (see FSC-STD-40-004, 6.3.1). Prohibition to place on the market, in countries with rules relating to timber legality, products containing MC (eg. AUS, EU, U.S.), and products falling within the same scope. From 1 January 2016: CM no longer allowed. Non-compliant products FSC-DIR-40-004, ADV-08 =Products or materials for which the organization is unable to demonstrate compliance with the requirements for statements and / or FSC label. If found: • cessation of sales of such products • written notice to the customers within 3 days • identification/analysis of causes: adoption of corrective and preventive measures • communication to the certification body • collaboration to verify the closure of the NC

(New) Ad hoc instruments Online Claims Platform -

For organizations already certified (by 2014) and neo-certified (2015) Registration and control of all FSC claims on the invoice (input) Availability of additional information can be easily recovered (wood species, origin, volume) access data to the Competent Authorities.

The aim of the FSC online claims platform is to be able to remedy any issues with the veracity or authenticity of an FSC claim in a timely manner, for example within 48 hours. In addition, the platform will streamline the processes for validating FSC claims to ensure that they are scalable as FSC certificates continue to grow.

Online Claim Platform (OCP)

http://ocp-info.fsc.org/

Insights and information material, Preview, Free online seminars, Discussion Forum,â&#x20AC;Ś Exercise: Please go to FSC EU TR platform www.claims-forum.fsc.org and look for some organization.. products.. which are able to import certified tropical timber from Ghana wood species, origin, volume): do I have all the required information to meet UE TR requirements?

EUTR and Forest Certification Regulation (EU) 995/2010 Article 4 “[...]any voluntary chain of custody mechanism which fulfil the requirements of this Regulation may be used as a basis for the due diligence system”.  Article 6.1b '[...] assurance of compliance with applicable legislation, which may include certification or other third party verified schemes which cover compliance with applicable legislation'.  Art 6.1c 'mitigation procedures [...] include [...] occurs by a third party' 

Regulation (EU) 607/2012 

Article 4 'Certification or other third party verified schemes referred to in Article 6, paragraph 1, letter b), second subparagraph, first indent, and Article 6, paragraph 1, letter c) of Regulation (EU) No. 995/2010, may be taken into consideration in the assessment and mitigation of risk if they meet the following criteria: [...] '

Tab. 3 examples of legality verification systems (VLO/VLC).

Name SGS

Rainforest Alliance Bureau Veritas

SCS Global Services Certisource

Functions

inspection, verification, testing and certification independent and transparent verification, validation and certification services global leader in Testing, Inspection and Certification (TIC), delivering services to help clients meet quality, safety, environmental protection and social responsibility targets. third-party environmental, sustainability and food quality certification, auditing, testing and standards development not-for-profit’ organisation; ‘verified legal’ timber certification, using an independent ISO accredited Certification Body

Link

http://www.sgs.com/ http://www.rainforest-alliance.org/ http://www.bureauveritas.com/wps/wcm/co nnect/bv_com/group http://www.scsglobalservices.com/timberlegality-verification http://www.certisource.co.uk/

REFERENCES Brack, D., & Hayman, G. (2001). INTERGOVERNMENTAL ACTIONS ON ILLEGAL LOGGING Options for intergovernmental action to help combat illegal logging and illegal trade in timber and forest products by, (March). Chen, H. K. (2006). The Role of CITES in Combating Illegal Logging ~ Current and Potential. Cambridge, UK. EIA. (2012). THE LAUNDERING MACHINE - How fraud and corruption in Peruâ&#x20AC;&#x2122;s concession system are destroying the future of its forests. Greenpeace. (2008). Wood Products Legality Verification Systems, (January). Hirschberger, P. (2008). Illegal wood for the European market. INTERPOL Environmental Crime Programme. (2012). GREEN CARBON, BLACK TRADE. (C. Nellemann, Ed.). ISPRA. (2009). Deforestazione e processi di degrado delle foreste globali. Panjer, M., Magrath, W. B., Greenberg, T. S., & Goncalves, M. P. (2012). Justice for Forests. World Bank. doi:10.1596/978-0-8213-8978-2