(This page was last updated in September 2022)
EU Timber Regulation
The European Union is in the process of revising its regulatory framework for timber supply chains as part of its effort to act on deforestation linked to agricultural commodities. The process will likely affect the EU Timber Regulation and EU FLEGT Regulation. This page will be updated once the legal framework has been formally agreed upon in the European institutions.
For the time being, the EU Timber Regulation and EU FLEGT Regulation remain in force as described below. For more information and updates, please visit the dedicated site on illegal logging hosted by the European Commission.
The EU Timber Regulation (Regulation No 995/2010 of the European Parliament and of the Council of 20 October 2010) outlines the obligations of operators and traders who place timber and timber products on the European market. The Timber Regulation has three key components:
- It prohibits the placing of illegally harvested timber and products derived from illegally harvested timber on the EU market;
- It requires the “first placer” of timber products on the EU market to exercise due diligence; and
- It requires traders who deal in timber products after the first placing to keep records enabling basic traceability of supply chains.
The Regulation covers a wide, but not exhaustive, range of timber and wood products, including fuelwood, plywood, raw timber, sawn wood, pulp and paper, furniture, joinery, and barrels. It does not cover musical instruments, printed materials (i.e., books and newspapers), or wood products imported by individuals for personal use, among other categories. A partial list of products that are included in and excluded from the Regulation is available from the European Commission here.
"Due diligence" in the EUTR context requires operators to undergo a process to minimize their risk of placing illegally harvested products on the EU market. In practice, this is similar to the concept of "due care" in the U.S. Lacey Act, but in Europe, it is a prescriptive system with specific steps that must be followed. The three elements of the EU due diligence system are:
- 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 the supply chain, based on the information identified during the first step, and taking into account criteria set out in the EUTR.
- Risk mitigation: When the assessment shows that there is a risk of illegal timber in the supply chain, the operator must mitigate that risk by requiring additional information and verification from the supplier.
"Monitoring organizations" which are officially recognized by the European Commission, are private entities (which can be for profit or nonprofit) responsible for providing operational due diligence systems to EU operators. The Competent Authorities of EU member states, which are government departments responsible for implementing the Regulation in their respective countries, must check monitoring organizations operating on their territory at "regular intervals," understood to be every 2 years.
Products carrying CITES or FLEGT licenses are considered to be legal by default under the EU Timber Regulation. This is a significant difference from the U.S. system, where no third-party licenses are recognized as proof of legality.
Excellent websites with additional resources on the EU Timber Regulation include the dedicated page on the Regulation at the European Commission and the Country Overviews compiled by the UNEP World Conservation Monitoring Centre. ClientEarth maintains a newsletter tracking the implementation of the EU Timber Regulation.
Penalties and Enforcement to Date
The EUTR applies to all EU Member States and European Economic Area countries. Each of the 30 different jurisdictions therefore developed their own implementing regulation, enforcement mechanism and penalty regime.
The various penalty regimes can include administrative fines and seizures, criminal fines, imprisonment, suspension of trade and other penalties. Potential fines start from €50, and there is no upper limit defined.
After the EUTR entered into force in 2013, Competent Authorities generally chose a “soft” approach to enforcement by addressing instance of non-compliance identified during their first enforcement actions with notices of remedial action, even if temporary seizures of material were already reported in 2013.
The European Commission also had to follow up with several member states to ensure implementation between 2015 and 2017.
First reports on sanctions date back to 2016 and mentioned penalties in the range of €2,000, when for example Swedish administrative courts ruled that a certificate issued by the Myanmar Forest Products Merchants’ Federation (MFPMF) did not provide adequate proof that a shipment of teak imported into Sweden had been legally harvested. The company in question, Almtra Nordic, was fined 17,000 Swedish kronor (US$1,700).
In November 2017, furniture retailer Lombok became the first UK business to be fined (£5,000) for non-compliance with the EUTR.
The highest penalties reported so far were €80,000 and in one case €20,000 per m³. The most prominent cases of EUTR enforcement deal with imports of natural forest teak from Myanmar, including the Gorch Fock case involving public procurement in Germany. Teak trade with Myanmar under the EUTR allegedly also led to a shift in trade routes to EU member states with less strict enforcement. Further details on enforcement so far are summarized in the report issued by the Policy Department for Citizens’ Rights and Constitutional Affairs, which was requested by the European Parliament's Committee on Petitions in 2021.
Compared with cases reported under the U.S. Lacey Act, the sanctions imposed under the EUTR are low. This might also be due to the lack of precise definitions in various member states for key concepts like due diligence and negligible risk. Several courts found it difficult to prosecute based on the current definitions in the EUTR, which has impeded enforcement progress.
Enforcement among domestic operators so far has received less public attention with the exception of Romania, where several NGO investigations highlighted the risk of illegal logging and triggered enforcement action and identified needs to update the national forest legislation.
Fitness check and way forward
In early 2020, the European Commission decided to undertake a “fitness check” on the FLEGT Action Plan and the EUTR to assess their effectiveness, efficiency, relevance, coherence and added value.
The main issues identified in this process include the high variability in implementation and enforcement of the EUTR across member states (including in number of checks on operators, sanction regimes and their application), a need for better cooperation between member state Competent Authorities and customs authorities, a need for more comprehensive definitions of key concepts like “due diligence” and definitions of “negligible risk” and more transparency in reporting by Competent Authorities to enable better performance tracking.
In parallel, EU policy has moved towards addressing deforestation and forest degradation beyond illegal logging and the European Commission is working on a proposal for a regulation on deforestation-free products that proposes to cover commodities like soy, beef, palm oil and others. It is anticipated that the EUTR will be integrated into this new regulation.