Transparency data

FLEGT report 2022 to 2023

Published 15 August 2023

Applies to England, Scotland and Wales

Report on Council Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community, as retained and amended in UK law.

Reporting period: 1 April 2022 to 31 March 2023.

Introduction

1. This report summarises the application of the Forest Law Enforcement Governance and Trade (FLEGT) licensing scheme for the dates 1 April 2022 to 31 March 2023, hereafter referred to as the 2022 to 2023 financial year. It has been prepared in line with Article 8(3) of Regulation (EC) No 2173/2005 (2005) on the establishment of a FLEGT licensing scheme for imports of timber into the UK, as amended in UK law, hereafter the FLEGT Regulation, and is based on information gathered by Defra.

2. This is the first report produced by the government on the application of the FLEGT Regulation since the United Kingdom left the EU.

Voluntary partnership agreements (VPAs)

3. A voluntary partnership agreement (VPA) is a bilateral agreement between a timber- producing country and the UK. VPAs are a key element of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan published in 2003. The Action Plan aims to reduce illegal logging by strengthening the sustainability and legality of forest management, improving forest governance and promoting trade in legally produced timber. The FLEGT Regulation, adopted by the EU in 2005 and retained and amended under UK law in 2018, empowers the UK to negotiate VPAs with timber-exporting countries. The UK signed a VPA with Indonesia on 29 March 2019 and expects to replicate other EU VPAs.

4. VPAs include commitments and actions from both parties to halt trade in illegal timber. Producer countries issue FLEGT licences that certify the legality of timber exported to the UK. To issue FLEGT licences, a VPA partner country must implement a timber legality assurance system (TLAS) and other measures specified in the VPA. When fully operational a TLAS includes effective supply chain controls, mechanisms for verifying compliance and is subject to independent audits. A VPA TLAS is built around a practical definition of legality that has been agreed through participatory processes involving stakeholders from government, the private sector and civil society. The VPA also promotes better enforcement of forest law and an inclusive approach involving civil society and the private sector.

5. The aim of a VPA is to use trade as an incentive to limit illegal logging. Since FLEGT licensed timber automatically meets the requirements of the UK Timber Regulation, which requires UK operators to conduct due diligence to prevent illegal wood entering the UK market, FLEGT licensed timber is not subject to those checks and offers a ‘green lane’ for businesses importing timber from partner countries. This reduces the regulatory burden on UK importers and gives countries exporting FLEGT licensed timber a market advantage.

6. VPAs are also intended to strengthen forest governance in timber-exporting countries by improving transparency, accountability and stakeholder participation. Such gains may result from commitments the partner country makes in the VPA text and annexes, or from the very process of negotiating and implementing a VPA.

FLEGT regulation enforcement

7. This report is based on data provided by the Office for Product Safety and Standards (OPSS), HMRC and UK Border Force (UKBF) for the 2022 to 2023 financial year. These delivery partners enforce the regulation on behalf of the Secretary of State, who is the Competent Authority under Regulation (EC) No 2173/2005 (2005) on the establishment of a FLEGT licensing scheme for imports of timber into the UK.

How FLEGT licensed timber is placed on the market.

8. The following section describes how FLEGT licensed timber is placed on the UK market and explains the role of each enforcement delivery partner in this process. UK importers who wish to import timber and timber products from Indonesia obtain a FLEGT licence from a supplier. When the shipment is in transit, the FLEGT licence is submitted to OPSS for verification. Importers also complete customs forms which are submitted to the HMRC National Clearance Hub (NCH). The clearance hub matches the customs data with verification from OPSS before the shipment is released for free circulation. UK Border Force (UKBF) perform physical inspections of shipments.

9. OPSS maintain retrievable records of applicant and licence details. They also develop, maintain and administer an electronic licencing system through which FLEGT licences are processed, records of licences are kept, and the status of checked licences is made available to enforcement partners and importers. They establish the validity of licences and communicate the decision to the end user automatically when no problems are identified and through officer intervention with the end user when problems are encountered. OPSS communicate FLEGT Regulation requirements as widely as possible, including through an up-to-date website. They also respond to those seeking guidance on fulfilling the requirements of the regulation.

10. HMRC are responsible for the customs clearance of goods falling under the UK FLEGT Regulation. HMRC is also responsible for conducting documentary checks on 10% of FLEGT Shipments. During this process they ensure that a valid licence has been presented which matches the relevant customs declaration prior to releasing the shipment for free circulation. HMRC’s clearance hub works with OPSS on the electronic clearance of licences in line with procedures they agree bilaterally. HMRC are responsible for referring consignments to UKBF for further investigation when no valid FLEGT licence has been presented. HMRC withhold customs clearance until UKBF notify whether the consignment can be released or whether it is going to be seized.

11. UKBF are responsible for acting on any timber arriving from VPA countries without a valid FLEGT licence and responding to specific intelligence about suspected breaches of the FLEGT Regulation involving goods arriving at UK ports, airports or whilst the goods are under customs supervision. They make any required physical inspections of timber shipments presented for release to free circulation without a valid FLEGT licence, including the use of specialist assistance in the identification of species as appropriate. As well as detaining or seizing any timber without a valid FLEGT licence, UKBF deal with post detention and seizure issues such as requests for restoration, appeals against seizures or non-restoration decisions and arranging for the disposal of seized timber as legally permitted. They refer detected FLEGT breaches that fall within agreed criteria to the Border Policing Command of the National Crime Agency for further investigation. UKBF are required to physically inspect 0.3% of shipments made under a FLEGT licence.

12. The National Wildlife Crime Unit (NWCU) are the liaison point for any Police activity relating to FLEGT. They are responsible for liaising with other Police units in order to support investigations by other enforcement partners into breaches of the EU FLEGT Regulation away from the border.

The licence verification process

13. FLEGT licences and verification forms are emailed to OPSS who then perform the following actions:

• Check that the licence appears on the Indonesian timber legality verification system (sistem verifikasi legalitas kayu in Bahasa, or ‘SVLK’) and the status is showing as approved.
• Check the details that have been provided on the verification form match with the information that has been provided on the FLEGT Licence. If there are any discrepancies between the two, or there is information missing, OPSS email the sender (usually the importer or the agent) to clarify the discrepancy.
• The licence is then verified on the UK FLEGT IT system. Licence details are entered into the system including the licence number, country of export, licence expiry date, the date and time that the licence was received, the harmonized system (HS) Code of the timber or timber products, the volume, weight and number of units included in the shipment, estimated date of arrival of the shipment, method of transport and arrival port or airport.
• Verification is then confirmed to the importer/agent, HMRC and the licence submitter.

Maritime shipments are verified within two working days of receipt. Air shipments must be verified within four working hours of receipt.

2022 to 2023 Financial Year - Verification of FLEGT licences and shipments

14. The FLEGT Regulation Article 5(4) provides for the enforcement delivery body to decide on the need for further verification of shipments using a risk-based approach. During the 2022 to 2023 financial year, OPSS used the following approach.

15. The criteria used to determine whether additional verification of a FLEGT licence was required included:

• if there was a mismatch of document information
• if the HS codes mismatched
• if the volume or weight of shipment was mismatched
• if the operator was not the same or if there was a mismatch in the UK and Indonesian Trade Tariff codes

The above checks were carried out by OPSS.

16. The criteria used to determine whether additional verification of a FLEGT licensed shipment was required included:

• if there was a mismatch in HS codes
• if there was a mismatch of document information
• random spot checks
• any other issues with the FLEGT licence

The above checks were carried out by HMRC and UK Border Force.

17. In the 2022 to 2023 Financial Year a total of 4345 FLEGT licences were checked, with 14 licenses requiring additional verification. OPSS rejected two FLEGT licenses. UK Border Force have not provided data on the number of physical inspections carried out over this period. We will provide data on their activities relating to this period in future reports.

Penalties

18. Under the Forest Law Enforcement, Governance and Trade Regulations (2012), which implement the FLEGT Regulation in the UK, penalties can be applied if any person discloses information received from HMRC Commissioners if:

(a) the information relates to a person whose identity is specified in the disclosure or can be deduced from the disclosure

(b) the disclosure is for a purpose other than the enforcement of the FLEGT Regulation

(c) the Commissioners have not given their prior consent to the disclosure

19. It is also an offence to:

• intentionally to obstruct a wildlife inspector without reasonable excuse
• fail to give to an inspector any information or assistance that the inspector may reasonably require
• knowingly to give false or misleading information to an inspector
• fail to produce a record or document when reasonably required to do so by an inspector without reasonable excuse

20. A person guilty of any of the above offences is liable on summary conviction to a fine of any amount.

Other sanctions

21. Customs may suspend the release of, or detain, timber products where they have reason to believe that the FLEGT licence may not be valid in line with Article 5(7) of the FLEGT Regulation. In these cases, costs relating to the holding and subsequent disposal of the timber (including costs of removal, transport, storage, donation, sale or destruction) are recoverable as a debt from the importer.

Licence fee

22. Article 5(6) of the FLEGT Regulations (2012) allows fees to be charged for processing FLEGT licences. The fee is £9.60 per licence.

FLEGT licensed timber imports

23. In the 2022 to 2023 financial year more than 134 million kilogrammes of FLEGT-licensed timber and timber products were imported into the UK under validated licences. Due to disclosure restrictions, we are unable to show the breakdown of these imports by commodity code. A full list of HS codes included in FLEGT legislation can be found in Annex A.

Table 1: Top five HS4 Codes Imported by Weight

HS Code	Classification
4418	Builders’ joinery and carpentry of wood, including cellular wood panels, assembled flooring panels, shingles and shakes
4802	Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punchcards and punch-tape paper, in rolls or rectangular (including square) sheets
4811	Paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets
4412	Plywood, veneered panels and similar laminated wood
9403	Other furniture and parts thereof

Annex A: HS product codes

Table 2: Key to harmonised system (HS) codes of products imported to the EU in 2017.

HS code	Details
4407	Wood sawn or chipped lengthwise, sliced or peeled, planed, sanded or end- jointed, of a thickness exceeding 6 mm.
4407.25	Wood, tropical; dark red meranti, light red meranti and meranti bakau, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, thicker than 6mm
4408.90	Sheets for veneering (including those obtained by slicing laminated wood), for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced or peeled, whether or not planed, sanded, spliced or end-jointed, of a thickness not exceeding 6mm
4409	Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, moulded, rounded or the like) along any of its edges, ends or faces, whether or not planed, sanded or end-jointed.
4409.22	Wood; tropical (including unassembled strips and friezes for parquet flooring), continuously shaped along any edges, ends or faces, whether or not planed, sanded or end-jointed
4409.29	Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V jointed, beaded, moulded, rounded or the like) along any of its edges, ends or faces, whether or not planed, sanded or end jointed, non-coniferous (not from rattan)
4412	Plywood, veneered panels and similar laminated wood
4412.31	Plywood; consisting only of sheets of wood (not bamboo), each ply 6mm or thinner, with at least one outer ply of tropical wood
4412.94	Blockboard, laminboard and battenboard (not bamboo, and other than plywood consisting only of sheets of wood each ply 6mm or thinner)
4414	Wooden frames for paintings, photographs, mirrors or similar objects (not from bamboo nor rattan)
4418	Builders’ joinery and carpentry of wood, including cellular wood panels, assembled flooring panels, shingles and shakes
4418.20	Wood; doors and their frames and thresholds
4418.99	Wood; builders’ joinery and carpentry of wood n.e.c. in heading no. 4418, other than of bamboo
4421	Wooden articles n.e.c. in heading no. 4414 to 4420
4421.99	Wood; not of bamboo, articles n.e.c. in heading no. 4414 to 4420 (excluding clothes hangers)
4703	Chemical wood pulp, soda or sulphate, other than dissolving grades
4802	Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and punch card stock and punch tape paper, in rolls or sheets, other than paper of heading No 4801 or 4803 ; handmade paper and paperboard :
4802.56	Uncoated paper and paperboard (not 4801 or 4803); printing, writing or graphic, 10% or less by weight of mechanical or chemi-mechanical processed fibre, weight 40-150g/m2, in sheets 435mm or less by 297mm or less (unfolded)
4803	Tissue, towel, napkin stock or similar; for household or sanitary uses, cellulose wadding, webs of cellulose fibres, in rolls over 36cm in width or rectangular sheets with one side exceeding 36cm when unfolded
4804	Uncoated kraft paper and paperboard, in rolls or sheets, other than that of heading no. 4802 or 4803
4810	Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size (not from non-wooden nor recycled material)
4821	Paper or paperboard labels of all kinds, whether or not printed
9401	Seats (other than those of heading 94.02), whether or not convertible into beds, and parts thereof
9401.69	Seats; with wooden frames, not upholstered, (excluding medical, surgical, dental, veterinary or barber furniture)
9403	Other furniture and parts thereof
9403.60	Furniture; wooden, other than for office, kitchen or bedroom use