A simple and short step-by-step beginners’ guide for companies who are EUTR beginners
The European Timber Regulation (EUTR) aims to stop the trade of illegal timber through banning placing illegally harvested timber on the EU market. It came into force in 2013 and has been adopted by all member states of the European Union together with Iceland, Norway and Liechtenstein.
Legally harvested timber is defined as timber which has been harvested by following the minimum requirements of applicable legislation in the country of origin.
Step-by-step guide for companies
Are the products you import into the EU covered by the EUTR?
You can find out here. The list is based on the EUTR product annex, which identified products based on the EU custom codes (HS/CN codes). Most wood product types are covered, but not all. See a list of wood products that are not covered by the EUTR here. Other products may be covered by the EUTR under certain circumstances. You can see some of the important distinctions to be aware of here. If your products are covered by the EUTR, please identify if your company is an ‘Operator’ or a ‘Trader’.
You are a ‘Trader’ if you:
Buy or sell timber products that have already been placed on the EU market. As a ‘Trader’ you are obliged to keep a log of buyers and suppliers of EUTR-listed products, and to keep a record of your suppliers and your customers.
You are an ‘Operator’ if you:
- Import and place any timber product covered by the EUTR on the EU market regardless if it is for sale or further processing. (Importers are in most cases listed as the “Consignee” on the customs declaration document). See below what is required from you as an ‘Operator’.
- Harvest timber from a forest within the EU and sell the harvested product on the EU market, or you use it in your own business.
As an ‘Operator’ you have a legal responsibility to register buyers and suppliers of EUTR-listed products, and you need to comply with the EUTR due diligence requirements, meaning: you have to show that you have done everything in your power to make sure the imported timber is not harvested illegally. A due diligence system is a documented, step-by-step method, that requires you to:
Set up due diligence procedures
Organise and implement due diligence procedures, define responsibilities, and ensure employees are trained/competent in their understanding of the EUTR.
Collect information about your products and supply chain
- This may include documentation such as harvest permits, invoices, transport documents. The specific documents will vary according to the supply chain of each product.
- You need to have access to adequate information to determine if the risk of illegal harvesting is present in your supply chain.
Assess the risk of illegally harvested material entering the supply chain
For each product, you need to conclude whether the risk is low (“negligible”) or specified (“non-negligible”).
Conducting a risk assessment can be divided into five areas of focus:
Access to Information: Do you have an adequate level of information available about the supply chain to answer all the following points?
Risk at Origin: Risk related to timber harvesting, including the prevalence of illegal harvesting practices, corruption, armed conflict, and potential timber export bans in the country or sub-national region of harvest.
Species Risk: Is the timber species endangered, subject to export controls or is there a prevalence of illegal harvesting of this specific species?
Supply Chain Complexity: What is the exact product composition? Is there a possibility that the timber species has been substituted with another type somewhere in the supply chain?
- Risk in Trade and Transport: Have all duties and taxes been paid? Do you have full information on the transport route of the product?
Assessing the risk based on the criteria above will allow you to reach a well-informed decision on whether the risk is ‘negligible’ or ‘non-negligible’ for the supply chain of each product.
See what the European Commission Guidance Document for the EU Timber Regulation (12.02.2016) says about due diligence here.
Mitigate identified risk
For high-risk (‘non-negligible’) products, you need to implement risk-mitigating actions. These measures must be effective and reduce the identified risk to a negligible level.
These risk mitigation actions must be specific to the specific risks you have identified and may range from collecting more information and documentation, scientific timber testing techniques, conducting on-site supplier audits, using independent third-party verification schemes (see more about certification here) or replacing suppliers altogether.
See the Expert Group on the EUTR Guidance document on Risk Mitigation measures here.
Your due diligence system should be evaluated regularly
Best practice recommendation is that this is done at least once a year, or every time you change to a new supplier.
If you are new to the EUTR, it is important to first identify any wood or wood products in your supply chain to find out whether you need to comply with the EUTR. Secondly, you can begin to map out your supply chains. This will help you in identifying which information it is necessary to collect to assess the risk.
Enforcement of the EUTR
The EUTR is enforced by Competent Authorities, also known as CAs. They are the official authority in your EU member state tasked to regulate and investigate any breach of the EUTR. Operators are liable to prosecution according to the statute of law in the individual EU member states.
Competent Authorities are responsible for carrying out checks on EUTR compliance. Enforcement actions include:
- Notifying ‘Operators’ of misconduct and potentially issuing instructions of remedial actions.
- Fines ranging from €50 to over €1,000,000.
- Confiscation of wood or wood products found to be violating the EUTR.
- Breaches of the EUTR can be punishable by imprisonment in some EU member states
Examples of enforcement action
- In August 2020, an Operator in Denmark was fined €10,000 for violating acting against an enforcement notice issued by the Danish Competent Authority about importing teak from Myanmar.
- In December 2019, the French Competent Authority issued an administrative fine of €5,000 to an Operator for the lack of risk assessment and mitigation actions from high-risk countries including Bolivia, Brazil, Peru, Cameroon and Gabon.
- In March 2019, the Belgian Competent Authority fined an Operator €12,000 for violating the EUTR obligation to perform due diligence on timber from high-risk countries.
- In January 2019, a Swedish Operator was fined €62,800 for failing to conduct proper due diligence on imported products such as gift bags and photo frames.
Guidance for suppliers based outside the EU
If you are based outside the EU and selling your products to a company within the EU, your buyer may request information on timber products for them to comply with the EUTR. Following these steps will aid you in the process:
Collect information: Seek information about the risk of illegal logging in the areas where your products are being harvested.
Assess the quality of the information: Understand where your gaps of knowledge are and how the information you need to assess the risk can be obtained. Address and mitigate any potential risk you may discover.
Identify and record the country of origin and timber species: It is important every participant handling or trading timber products keep a file to document transactions.
Provide documentation that the timber has been harvested legally: This requires compliance with all legislation within the country of harvest. Suppliers need to provide reliable documentation for legal harvesting. This may include logging permits, harvest regulations, environmental laws and payment of fees, duties, and taxes. If needed, implement a timber tracking system to ensure traceability. A credible certification or verification scheme like the FSC™ (Forest Stewardship Council™) may enable you to achieve this quicker.
The European Commission (donor) is not responsible for any claims or views presented in this material. The European Commission's support for the production of this publication does not constitute endorsement of the contents which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of information contained therein.