Since 2013, all European market participants have had to comply with the EUTR (EU Timber Regulation). It was introduced for good reasons. After all, timber is only a sustainable raw material if it is also sustainably managed and traded. For companies involved in the timber trade, however, the EUTR means a certain amount of additional work. Especially in risk assessment and risk mitigation. You can read more about this below, and also learn how to reduce the effort required to comply with the EUTR.
Want to get straight to the solution? Learn about RADIX Tree
1. What is the EUTR?
The EUTR (European Union Timber Trade Regulation) has been in force since 2013. It is a EU-wide regulation (which is replicated in the UK since Brexit, UKTR) that also has international implications. The aim of the EUTR is to prevent illegal logging worldwide and to put timber sustainability on a stronger footing but excluding illegally source timber products from the single market. The EUTR stands alongside other regulations, such as the US Lacey Act, which pursues similar goals to the EUTR, with significantly higher penalties, however.
2. Who is affected by the EUTR?
The requirements of the EU Timber Trade Regulation apply to all operators and traders who import timber or timber products into the EU or who work with them here. There are some exceptions, such as recycled and waste wood products, printed matter, bamboo products and seating furniture. There is also furniture and other inventory used in medical or veterinary environments. Nevertheless, a predominantly large percentage of wood products are affected by the EUTR.
According to the EUTR, there are two different roles you can play in the market:
- Operators – In this case, you are the first to place timber and timber products on the EU market. Your obligations under the EU Timber Regulations are to implement a due diligence system to ensure you have not procured illegally felled timber for import into the EU. This is often very costly, as it is highly time intensive. More on due diligence systems in part 3.
- Traders – For traders, those who trade timber with EU operators or within the single market, you have fewer obligations. Put simply, traders must ensure the traceability of their products. This works by storing information about suppliers and sharing this with operators when required.
How is it enforced internationally so that timber is legally harvested?
The EUTR is a crucial European instrument for quality assurance and for more sustainable timber trader. However, this does not mean that European laws are applied in the countries of timber origin. Rather, the EUTR stipulates that the respective national regulations apply. If timber is harvested in Viet Nam, for example, the laws in force there must be applied. In order for operators to buy safely from there, the timber harvesters must have documented proof of compliance. There are big variances in timber harvesting laws across the world, which should be accounted for in any risk assessment.
Have any questions? Let us know!
3. Data, risk analysis and mitigation – how do you comply with the EUTR?
Operators who need to comply with the EUTR must firstly collect information (data collection), secondly assess risks (risk assessment) and thirdly mitigate risks (risk mitigation). These due diligence obligations can be implemented with varying degrees of ease or difficulty.
You must gather information from your supply chain partners on the key details of your products. Including the timber species, forest origin, volume, supplier info and any compliance documents (harvest permits, 3rd party schemes etc)
Next the data must be assessed as to the risk of illegally felled timber entering the supply chain using relevant criteria. Usually, this relies on the expertise of risk analysts. This can be time-consuming and expensive, requiring significant investment. Here at Global Traceability we have considerable experience with this process and can advise on the best approach to meet your requirements.
Where your assessment has led to non-negligible risk you must implement risk mitigation against the identified issues. These can vary from requiring more information to site visits or changing suppliers.
RADIX Tree offers a complete risk management solution
With RADIX Tree, you can move your due diligence process online, with automated tools to speed up your risk assessment process. This reduces effort and costs for operators. Get in touch with us!
Who enforces the EUTR and what are the penalties?
As mentioned above, you must ensure the requirements of the EU Timber Trade Regulation are met for our own products. If this is not done, you can expect sanctions and penalties in the event of an audit. The consequences can vary in severity from country to country. Possible sanctions include:
- Confiscation of timber and timber products
- Suspension of trading
- Fines (in Germany up to 50,000 euros per individual product)
- It is also not uncommon for competitors or other non-profit organisations to send out warning letters
Compliance with the EUTR is controlled by authorities in each member state, for example the Federal Agency for Agriculture and Food (BLE) in Germany, where the EUTR was integrated into national law with the Timber Trade Assurance Act (HolzSiG).
Can you quickly see which of your products are affected?
Yes! You can check the customs tariff numbers of your imported products to see if they are affected by the EUTR. You can also exclude various products.
4. Save costs and reduce riskWe at Global Traceability have many years of experience in the field of sustainability compliance management. And we have been providing solutions for the EUTR due diligence requirements since it was introduced in 2013. We currently work with many companies, large and small, when it comes to EUTR. RADIX Tree is our proven tool for EUTR compliance management, see for yourself what this tool can do.
RADIX Tree – online data collection & risk assessment services
- Move your data collection to the RADIX Tree platform to simplify how your suppliers share data with you.
- Automated validations of the data allow swift identification of risk.
- Use our templates to get the exact information you need.
- Our experts can support your risk assessment in a range of ways, from supplier onboarding to complete risk assessment service.
- No matter the number of suppliers or your budget, RADIX Tree is the smart tool to manage your compliance.
User-friendly & customisable
RADIX Tree 2.0 for faster performance
New dynamic tools
Get in touch for a free demonstration of RADIX Tree for EUTR complianceSend us your email and we’ll be get right back to book an appointment
FAQs on the EUTR:
Which products and countries are affected by the EUTR?
The EUTR provides slightly complex distinctions of different wood-based products. You can find out more here.
The EUTR applies to all 27 member states , as well as Iceland, Norway and Lictenstein. Since Brexit, the UK has replicated the EUTR into its own regulation meaning British companies also have to implement due diligence on their products (with some complications for Northern Ireland, see here). Switzerland is also implementing a timber regulation that is equivilent to the EUTR. More on Switzerland here.
Why was it created?
As early as 2003, the need for action was recognised in the EU – a joint regulation was drawn up to ensure compliance with legal regulations regarding the timber trade. This resulted in Regulation (EU) No.995/2010 of the European Parliament and of the Coucil of 20 October 2010, now known as the EUTR. It enterned into force in March 2013.
The goals are clear:
- Keep illegally harvested timber out of the single market to minimise the demand for unsustainable logging
- Improve the competition and market for legally harvested timber.
What are the obligations under the EUTR?
Operators must comply with their EUTR due diligence obligations or face penalties. They must indentify and document their supply chain to assess the risk of illegal timber, then mitigate any potential risks.
Will the EUTR be changed?
An important question! The answer is almost certainly yes! The EU Commission has proposed a new broader-in-scope regulation on deforestation. This will significantly expand on the number of businesses affected and add a new obligation to ensure their products are not associated with deforestation (regardless of whether the timber was legally harvested in that country). See here for more info.
More on the EUTR
EVENT Part 2: Die Risikobewertung und Konsequenzen bei Verstößen gegen die Sorgfaltspflichten 30.März 2022
The second event in the series is dedicated to the topic of risk assessment as the core of the due diligence system to be implemented by the market participants and shows which allegations regularly play a role in the discussion
After a year of significant global challenges, with everything from lockdowns to a blocked Suez canal, we look ahead...
Swiss timber regulation (HHV/ OCBo/OCoL) to begin January 2022 – equivalence with EU Timber Regulation
Switzerland will begin enforcement of the Timber Trade Ordinance (Holzhandelsverordnung - HHV/L’ordonnance sur le...