EUTR

Why do we need EUTR? (EU Timber Regulation no. 995/2010)

Illegal logging is a pervasive problem of major international concern. It poses a significant threat to forests as it contributes to the process of deforestation and forest degradation, which is responsible for about 20 % of global CO2 emissions, threatens biodiversity, and undermines sustainable forest management and development including the commercial viability of operators acting in accordance with applicable legislation. It also contributes to desertification and soil erosion and can exacerbate extreme weather events and flooding. In addition, it has social, political and economic implications, often undermining progress towards good governance and threatening the livelihood of local forest-dependent communities, and it can be linked to armed conflicts. Combating the problem of illegal logging in the context of this Regulation is expected to contribute to the Union’s climate change mitigation efforts in a cost-effective manner and should be seen as complementary to Union action and commitments in the context of the United Nations Framework Convention on Climate Change. (Paragraph 3, EUTR).

For the purpose of combating illegal logging and related trade, measures have been adopted within the EUTR to prohibit the first placement into the internal market of illegally harvested timber or derived timber products.

What means illegally harvested wood?

‘Illegally harvested’ means harvested in contravention of the applicable legislation in the country of harvest. (art.2, letter g, EUTR)

Applicable legislation

According to EUTR ‘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.

Thus, the applicable legislation is also the legislation concerning harvesting rights payments and taxes, third party rights on use and ownership, timber harvesting legislation including environmental legislation where these are directly related to harvesting of wood.

EUTR provisions:

• The placing on the market of illegally harvested timber or timber products derived from such timber is prohibited;
• Operators – those who first place timber and timber products on the EU market – must act with caution (“due diligence”);
• Traders – those who buy or sell timber or timber products already placed on the EU market – are required to keep information on suppliers and customers to facilitate traceability of wood.

Due Diligence system (DDS)

On the basis of a systemic approach, operators placing timber and timber products for the first time on the internal market should take the appropriate steps in order to ascertain that illegally harvested timber and timber products derived from such timber are not placed on the internal market. To that end, operators should exercise due diligence through a system of measures and procedures to minimise the risk of placing illegally harvested timber and timber products derived from such timber on the internal market.. (Paragraph 16, EUTR).

The main elements of DDS:

Schematic representation of the Due Diligence system

A. Access to information:

Access to information is the first requirement for implementing a DDS. The obligation of operators to inform themselves and to allow access to information on the supply of timber or timber products is regulated by art. 6 par. (1) letter (a) of the Regulation.

(a) measures and procedures providing access to the following information concerning the operator’s supply of timber or timber products placed on the market:

• description, including the trade name and type of product as well as the common name of tree species and, where applicable, its full scientific name;
• country of harvest, and where applicable: (i) sub-national region where the timber was harvested, and (ii) concession of harvest;
• quantity (expressed in volume, weight or number of units);
• name and address of the supplier to the operator;
• name and address of the trader to whom the timber and timber products have been supplied;
• documents or other information indicating compliance of those timber and timber products with the applicable legislation.

B. Risk assessment:

Risk assessment is a basic requirement for DDS implementation and at the same time constitutes a novelty element compared to current practices in Romania. The obligation of the operators to analyse and evaluate the risk of illegally harvested timber products is regulated by art. 6, paragraph (1) letter (b), EUTR.
For evaluation, the wood used will be analysed based on the following criteria:

assurance of compliance with applicable legislation, which may include certification or other third-party verified schemes which cover compliance with applicable legislation;

prevalence of illegal harvesting of specific tree species;

prevalence of illegal harvesting or practices in the country of harvest and/or sub-national region where the timber was harvested, 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.

relevant for Romania

irrelevant for Romania

Relevance justification is detailed in the EUTR Guide (pages 14-16).

C. Risk mitigation:

Operators who are not sufficiently convinced that the risk of placing illegally harvested timber on the market is negligible, must implement risk mitigation measures. These may include:

• requiring additional information from suppliers;
• requiring additional documents from suppliers;
• request for verification by third parties, etc.

Operators may opt to develop their own Due Diligence System or appeal to one of the EU-recognized monitoring organizations. Procedural rules for the recognition and withdrawal of recognition of monitoring organizations are set out in the Delegated Regulation (EU) 363/2012.

EUTR and FSC

In order to recognise good practice in the forestry sector, certification or other third party verified schemes that include verification of compliance with applicable legislation may be used in the risk assessment procedure. (Paragraph 19, EUTR)
According to art. 4 of Comission Implementing Regulation (EU) no. 607/2012,certification or other third-party verified schemes may be taken into account in the risk assessment and risk mitigation procedures where they 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.

FSC^® through the Controlled Wood Standard, defines the requirements for a Due Diligence system that meets all the criteria listed above. Alignment with EUTR requirements was achieved by adopting the latest version (V3-1), published in March 2017. The changes made can be found in Annex H Matrix of changes between versions 2-1 and 3-1 of the standard.

How is it apllied?

The Regulation is legally binding for all 27 EU Member States, which are responsible for establishing effective, proportionate and dissuasive sanctions and for the implementation of the Regulation.

Each Member State shall designate the competent authority responsible for the implementation of the Regulation.

In Romania the designated competent authority is the Ministry of Environment and the Ministry of Waters and Forests, which exercises its attributions through the National Environmental Guard, respectively the Forest Guard, based on the GD. 668/2011.

The methodology for exercising control duties was developed following the WWF’s proposals and was adopted by Order no. 819/2015.

According to art. (6), al. (6), the objectives of the controls carried out by the competent authority on the operators are:

• compliance with the prohibition of introducing illegally harvested wood or derived products, according to art. 4, al. 1, EUTR;
• the establishment by operators of a Due Diligence System in accordance with the provisions of art. 4 par. (2) of the EUTR and its use;
• compliance of the due diligence system used by operators, whether it is their own system or one established by a monitoring organization, with the specific elements provided in art. 6 of EUTR;
• application of the due diligence system by operators in accordance with the specific provisions of the EUTR and the Commission Implementing Regulation;
• evaluation and review the due diligence system on a regular basis and whenever is required, in accordance with the provisions of art. 4 par. (3), EUTR.

Checks are carried out according to a regularly revised plan, following a risk-based approach:

• Controls will be carried out with priority for operators alerted by traceability systems, third-party alerts, or economic operators who accumulate penalty points over a certain “alert rate” for sanctioning forest contraventions;
• Checks will be performed primarily at operators who place the highest amounts of timber from areas of risk;
• Checks will be carried out primarily for operators who place the highest amount of timber on the internal market;
• The controls will pay special attention to timber products of complex origin (composite products, paper, particleboard, chipboard, etc.);
• The competent authority will carry out controls on operators setting up a DDS system maintained and verified by a monitoring organization whenever irregularities are reported (this does not mean limiting other checks carried out in accordance with the law). The competent authority will monitor the monitoring body at least once every two years.

The results of the checks are recorded in the registers of controls which must be made available to the public in accordance with Directive 2003/4 / EC. For this purpose, the Competent Authority should develop an electronic system of public records of economic operators that implements a Due Diligence system including checklists (keeping the confidentiality elements) where the nature and results of the checks and the remedial measures imposed by the competent authority are to be found.