EUTR & China trade. Will it effect your business?

EUTR – European Timber Regulations, came in to effect as of March 3rd 2013. How do they effect your China timber and wood business?

Whether you exporting raw material to China or importing finished products such as furniture, flooring or even paper to the EU you should be aware of the new legislations.

This article seeks to combine some key resources whilst giving you a brief overview of some of the requirements.

 

Requirements: Suppliers of wood/timber products into the EU must record and be able supply information including:

  • description (including the trade name, type of product and common name/full scientific name of species);
  • country of harvest (and, if applicable, region of harvest, as well as the concession of harvest – i.e. any arrangement conferring the right to harvest timber in a defined area);
  • quantity (expressed in volume, weight or number of units);
  • name and address of the supplier to the operator;
  • name and address of the buyer (trader) who purchases the timber;
  • documents or other information indicating compliance of the timber and timber products with the applicable legislation.

 

Risk assessment: You must analyse and evaluate the risk that the timber you are dealing in is illegally harvested. When making this assessment, investigate the wood you are dealing in using the following criteria:

  • assurance of compliance with applicable legislation, which may include certification or other third-party-verified schemes which cover compliance with applicable legislation;
  • prevalence of illegal harvesting of specific tree species;
  • prevalence of illegal harvesting or practices in the country of harvest and/or sub-national region where the timber was harvested, including consideration of the prevalence of armed conflict;
  • sanctions imposed by the UN Security Council or the Council of the European Union on timber imports or exports;
  • complexity of the supply chain of timber and timber products.

The regulation is EU wide.  Each member state has a nominated responsible authority, for reference you take a look at the following link to find your local authority: EU member state responsible authorities.

 

Exporting Timber to China

Earlier we mentioned that this EUTR could impact companies exporting wood to China. Why is this, has China partnered with the EU? No, but many Chinese factories sourcing wood internationally are processing the raw material into products that will be sold to the EU, as such these factories will be required to maintain audit trails of the raw materials to ensure they can demonstrate to their customers due diligence. Failure to do so could mean difficulties exporting to the EU and certainly could cause delays & issues with EU customs.

 

VPA – Volunterary Partnership Agreements

As of 2013 there are currently six countries developing the systems agreed under a Voluntary Partnership Agreement (VPA) and six countries that are negotiating with the EU. Furthermore, there are around 15 countries from Africa, Asia and Central and South America that have expressed interest in VPAs.  More information on the individual countries can be found at: http://www.euflegt.efi.int/portal/home/vpa_countries/

Indonesia and Malaysia are both early adopters of agreement and are developing systems at the time of writing. This is significant for the China timber trade as these two countries are major suppliers of wood material. By signing up to the VPA, countries implement a strict set of policies and systems to certify and audit exporters. This in-turn means that the supply chain becomes much more clearly documented. These documents can then be used by the Chinese producers when selling finished products to the EU.

 

Are you involved in the wood and timber trade? Heighten International has a wide range of experience in both importing wood and timber products from around the world as well as helping companies export wood based products to the EU and the rest of the world. If you have any questions, we are here to help.

 

Additional resources:

FLEGT – Forest Law Enforcement Governance & Trade

Due diligence, certification and enforcement of the EUTR FAQ (English)

Importing and exporting under EUTR FAQ (English)

https://ic.fsc.org/eu-timber-regulation.46.htm

http://www.cpet.org.uk/eutr