New Analysis of the EUTR and the Lacey Act – Legal Implications for Timber Industry

New legal analysis by the Environmental Investigation Agency (EIA) reveals previously unrecognised risks and liabilities under the Lacey Act (2008) in relation to the EU Timber Regulation. The implications could mean extra scrutiny for products traded from the EU to the US.

The EIA are a non-profit who investigate and report on environmental crimes, offering guidance to enforcement agencies. Their investigation focuses on the implications arising from the US Lacey Act, which prohibits timber being sold in violation of any foreign law protecting plants. The EUTR is such a foreign law, therefore any wood in violation of the EUTR is also prohibited in the US.

The EIA conclude that due to weaknesses in the EUTR – including its limited scope, lack of obligations on traders and no seizure powers for authorities – EU products are still exported to the US despite breaking due diligence requirements in Europe. These products should therefore be considered contraband in the US and enforced as such.

Illegal Timber Falling Through the Cracks – The Luxury Yacht Example

Yacht_Wood_Deck

Using the example of Burmese teak in the luxury yacht industry the EIA describe how, despite repeated EUTR violations and enforcement rulings on Myanmar timber sources, the yacht industry continues to import high risk teak to meet demand. All EU manufactured yachts containing Burmese teak exported to the US since March 2013 (when the EUTR was enacted) should therefore be considered contraband under the Lacey Act.

Effectively, through the Lacey Act, there is an opportunity for authorities to catch products which fall through the cracks in EUTR enforcement.

You can read the full report here. Below are EIA’s own recommendations for EU operators (those who first place timber into the EU market) and EU traders/exporters who need to protect their market share and access to the US market.

Operators

  • Conduct full due diligence on any timber purchased
  • Do not place on the market any product where risks cannot be mitigated
  • Communicate with suppliers in producer countries
  • Establish procedures to disclose to customers all evidence you have applied due diligence
  • Be willing to share due diligence practices with companies down the supply chain who may also need to mitigate liabilities under the Lacey Act

Traders and exporters

  • Insist on viewing and accessing due diligence systems used by operators to protect yourself, your distributors and customers who are liable under the Lacey Act

Need further advice on EUTR compliance? Get in touch with us with one of our experts.