Since 2013, all European market participants have had to comply with the EUTR (EU Timber Regulation). It was introduced for many good reasons. Sustainability, for one. But above all, the EUTR is about ensuring that timber has been harvested legally.
For companies involved in the timber trade, however, the EUTR means significant additional work. Especially in assessing and minimising the risk of illegal timber in the supply chain. You can read more about this below, and also learn how to reduce the effort required to comply with the EUTR.
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1. What is the EUTR?
The EUTR (European Union Timber 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. 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 process or trade them in the internal market. 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:
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.
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 Timber Trade Regulation is a crucial European instrument for ensuring legality in the timber trade. 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.
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3. What do you have to do?
Operators who need to comply with the EUTR must collect information (data collection), assess risks (risk assessment) and mitigate risks (risk mitigation). Each of these steps can be complex – depending on the supply chain – and entails financial risks.
Many of our clients ask themselves: How should I master this complexity? How can I play it safe without my process getting out of hand financially or organisationally?
RADIX Tree offers all-in-one data and risk management
With RADIX Tree, large parts of the data collection and risk assessment for the EUTR is automated. RADIX Tree also answers the frequently asked question of which documents are needed in each situation. All this reduces the effort and costs for the operator. Get in touch with us!
How to manage the complexity of data, risk analysis and mitigation?
Our online platform RADIX Tree not only brings together the information and evidence provided by your supply chain partners (Including the timber species, forest origin, volume, supplier info and any compliance documents, harvest permits, 3rd party schemes etc). It also supports you with automated data management, by automatically alerting you which documents you need for each of your products or whether you are still missing documents.
RADIX Tree simplifies the work of assessing the data received in the gathering process enormously. Showing, for example, whether your trading partners have all the documents or whether you run the risk of buying illegally felled timber.
Similar to analysis, risk mitigation is demanding in terms of personnel and organisation – when done with traditional methods. RADIX Tree can transform this process too.
The latest version of RADIX Tree even provides auto-generated Risk Assessment Reports. With a push of a button you can report on your compliance with the EUTR, for all of your products.
4. What we can do for you?
We at Global Traceability have many years of experience in the field of compliance management. We have been providing solutions for the EUTR due diligence requirements since it was introduced in 2013.
In the past, we have handled much of the compliance management manually for our clients. With the new RADIX Tree we have developed new functions and automations to make compliance with the EUTR much easier, safer and cost-effective.
See for yourself what this tool can do.
RADIX Tree – automated data collection, risk analysis and risk mitigation
- RADIX Tree makes automated data collection possible.
- It simplifies the risk assessment by working automatically.
- It simplifies risk mitigation
- It ensures you’re working in a legally compliant and secure manner.
- If required, RADIX Tree can also take care of reporting to authorities.
- We provide templates that make your work easy.
- We offer service packages that fit the size of your company – individually expandable and customisable.
- Most of all, RADIX Tree is the smart tool that minimises the financial impact of complying with the EUTR.
User-friendly & customisable
Collaborate with your supply chain
Work smart with automated risk analysis
Affordable to every business
Get in touch for a free demonstration of RADIX Tree for EUTR compliance
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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.
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 will be subject to 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, including FLEGT licensed products. These are timber imports subject to the Forest Law Enforcement, Governance and Trade licensing scheme.
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.