Transparency data

UKTR report 2021 to 2022

Published 15 August 2023

Applies to England, Scotland and Wales

Report on Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market as amended in UK law.

Reporting period: 1 April 2021 to 31 March 2022.

Introduction

1. Prior to exiting the EU, the UK enforced the adopted Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 (EUTR) in the United Kingdom. On 29 March 2019, the United Kingdom retained this law in our domestic law. Currently, the European Union Timber Regulations (EUTR) apply in Northern Ireland under Annex II of the Northern Ireland Protocol.

2. This is the first report produced by the government on the application of Regulation (EU) No 995/2010, as amended in UK law, since the UK left the EU. Hereafter this is known as the ‘timber regulation’, for England, Wales and Scotland.

3. The timber regulation prohibits the placing of illegally harvested timber and timber products on the United Kingdom market and require operators, those first placing such products on the market, to exercise due diligence. Illegally harvested timber is timber harvested in contravention of the applicable legislation in the country of harvest. Traders, those who trade in timber and timber products after they have been placed on the market, are required to keep records of who they buy timber products from and any traders they sell them to. This enables timber and timber products to be traced.

4. The timber regulation arose from the 2003 Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, a European Union (EU) initiative aimed at tackling illegal logging by ensuring that imports of timber into the EU are from legal sources.

5. The Report is based on data for the period 1 April 2021 to 31 March 2022 provided to the Department for Environment, Food and Rural Affairs by The Office for Products, Safety and Standards (OPSS). OPSS enforce the United Kingdom timber regulations on behalf of the Secretary of State, who is the Competent Authority under The Timber and Timber Products (Placing on the Market) Regulations 2013. OPSS report on penalties in place, checks on Operators and Traders and enforcement action.

Enforcement of the timber regulation - requirements of operators, traders and monitoring organisations

6. The requirements of operators, those first placing timber or timber products on the market, are set out in Article 4 of the timber regulation. The requirements of monitoring organisations, which are organisations who grant operators the use of a due diligence system, are set out in Article 8 of the timber regulation. Both these sets of requirements are summarised below:

• Operators are prohibited from placing illegally harvested timber on the market.
• Operators shall exercise due diligence when placing timber or timber products on the market using a framework of procedures and measures, referred to as a ‘due diligence system’ (as set out in Article 6 of the timber regulation).
• Operators must maintain and regularly evaluate due diligence systems except where the operator makes use of a due diligence system established by a monitoring organisation referred to in Article 8, a separate organisation who are able to grant operators the use of a due diligence system.
• Monitoring organisations must maintain and regularly evaluate a due diligence system and grant operators the right to use it. They must also verify the proper use of its due diligence system by such operators and take appropriate action in the event of failure by an operator to properly use its due diligence system, including notification of enforcement authorities in the event of significant or repeated failure by the operator.
• Traders (those who buy and sell timber after it has been placed on the market) must be able to identify the operators or the traders who have supplied the timber and timber products and, where applicable, the traders to whom they have supplied timber and timber products. Traders must keep this information for at least five years and provide that information to enforcement officers on request.

Checks on operators

7. The timber regulation sets out the requirements for checks on Operators. As the enforcement delivery partner, OPSS must check that Operators are exercising due diligence when placing timber or timber products on the market and using a due diligence system.

8. The checks should be conducted as part of a periodically reviewed plan following a risk-based approach. Checks may also be conducted when relevant information concerning compliance comes to light including substantiated concerns provided by third parties. Checks may include:

• examination of the due diligence system, including risk assessment and risk mitigation procedures
• examination of documentation and records that demonstrate the proper functioning of the due diligence system and procedures
• spot checks, including field audits

9. Where shortcomings have been detected, OPSS may issue a notice of remedial actions to be taken by the operator and may also take immediate interim measures, including:

• seizure of timber and timber products
• prohibition of marketing of timber and timber products

Checks on Monitoring Organisations

10. Commission Implementing Regulation (EU) No 607/2012 sets out the frequency and nature of the checks on monitoring organisations as provided for in the timber regulation. Checks must be carried out at regular intervals to verify that the monitoring organisations continue to fulfil the functions set out in the timber regulation. Checks are also carried out:

• where shortcomings in the effectiveness or implementation by operators of the due diligence system established by a monitoring organisation have been detected, or
• where a monitoring organisation has undergone subsequent changes since they have been recognised as a monitoring organisation

11. Such checks include spot checks including:

• field audits
• examination of documentation and records of monitoring organisations
• interviews with the management and staff of the monitoring organisation
• interviews with operators and traders or any other relevant person
• examination of documentation and records of operators - and examination of samples of the supply of operators using the due diligence system of the monitoring organisation concerned - regular checks must be carried out every two years

12. The monitoring organisations active in the United Kingdom are SGS United Kingdom Ltd, Soil Association, Preferred by Nature, Control Union (UK) Ltd, BM Certification and Envirosense.

Access to premises and documents

13. OPSS enforcement officers require a warrant and access to operators’, traders’ and monitoring organisations’ premises, documentation and records in order to perform these checks. In certain situations, enforcement officers can gain access without advance notice where it can be shown that giving notice would impede the investigation.

Record of checks

14. Keeping records of checks is necessary for carrying out effective inspections and enforcement activities and facilitates planning and reporting. These records also allow the general public access to environmental information upon request. Data related to checks under the timber regulations and kept in the records is considered environmental information. As a rule, access to environmental information needs to be granted to anyone who requests it, unless this information falls under one of the exceptions to this rule, such as confidentiality of proceedings protected by law, ongoing proceedings, commercial information and personal data.

15. OPSS record the name and address of the company, the reasons for the check (risks identified in check plan, substantiated concern) and the nature of the check (whether it is desk-based on- site, or joint inspections) unless otherwise stated. This information is only partially made available upon request. Similarly, concerns, infringements identified, and enforcement activities are only partially made available to the public.

16. The names and addresses of the supplier companies (applies to operators and traders) and the names and addresses of buyer companies (applies to operators and traders) are restricted. The names and addresses of operators using monitoring organisation services are not retained. Records of checks on monitoring organisations are kept, but not made available.

Risk-based approach

17. OPSS adopt a risk-based approach for planning checks on operators, targeting operators that meet one or more risk criteria. Those operators are considered at risk of breaching the timber regulation. This risk-based approach allows OPSS and Defra to take effective measures to prevent illegal timber being placed on the market and if necessary, to impose effective, dissuading and proportionate penalties.

18. OPSS rely on a referral from Forestry Commission officials to enforce The timber regulation in relation to domestic timber or timber products. For imported timber, the criteria they use to target specific imports are:

• type of timber products - for example, composite wood
• country of harvest – for example, countries with high corruption, internal armed conflicts, track record of illegal logging, export bans
• area or region of harvest – for example areas or regions with high corruption, internal armed conflicts, a track record of illegal logging
• timber types – for example, tropical, broad leaf or species such as teak
• complexity or type of supply chains - for example, trade involving transit or processing countries
• high value of timber and timber products placed on the market

19. Having identified imports which meet the criteria above, OPSS prioritise which operators to check using the following criteria:

• checks carried over from the previous reporting period which have not yet been actioned
• substantiated concerns from non-governmental organisations (NGOs)
• specific risk criteria ranking higher than others and
• previous compliance levels

20. The risk criteria, risk level and prioritisation of risk are re-assessed when new relevant information becomes available.

Resources

21. Having sufficient resource to perform enforcement activities is key to ensuring the application of the timber regulation, the reduction of illegally harvested timber or derived products being placed on the market, and the improvement of traceability of timber throughout the supply chain.

22. During this reporting period the following metrics applied:

• OPSS were operating at full capacity with 4.8 full-time equivalents (FTE) working on enforcement of the timber regulations
• the total annual budget for the timber regulations implementation and enforcement (which includes travel costs, workshops costs, sample analysis, issuing penalties and legal fees) was £620,000
• the average time spent on each type of check on operators (including preparation, transport, on-site inspections, administration, but not including pursuing enforcement actions, preparation of replies to complaints and court cases) was longer than one week for purely domestic-based checks and desk and on-site checks
• the average time spent on each type of check on monitoring organisations was three to five days for both

23. More recently there have been issues regarding the complexity of legislation and the need for documents to be translated. Some issues are country or region-specific, for example:

• the conflict in Ukraine has raised issues with transparency and traceability within supply chains
• there are significant issues facing importers and enforcement agencies regarding the traceability of timber entering the UK from China, as well as the risk of timber laundering
• for the Solomon Islands - there are risks of illegal logging and timber laundering

Voluntary partnership agreements (VPA countries)

24. 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 UK signed a VPA with Indonesia on 29 March 2019 and expects to replicate other EU VPAs. In the EU, the first VPA to be signed was with Ghana, followed by the Republic of the Congo, Cameroon, Indonesia, the Central African Republic, Liberia and Vietnam. The EU has concluded negotiations and initialled a VPA with Honduras and Guyana. Negotiations are ongoing with Côte d’Ivoire, Democratic Republic of the Congo, Gabon, Laos, Malaysia and Thailand.

25. VPAs include commitments and action 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.

26. It is important to gather information on whether the Voluntary Partnership Agreement (VPA) processes are having a beneficial effect on the implementation and enforcement of the timber regulation and whether there is evidence that illegal trade from those countries is reducing, which is indicated by the reduction of the perceived risk of illegally harvested timber and derived products originating in these countries over time.

27. OPSS assign a high level of risk of illegal harvesting to Cameroon, Central African Republic, Cote d’Ivoire, Democratic Republic of Congo, Gabon, Thailand, and Vietnam. A medium risk is assigned to Ghana and Malaysia. Timber from Indonesia is classed as low risk (this relates to timber and timber products which do not fall under the FLEGT regulation). For Guyana, Honduras, Laos, and Liberia there are no inputs in this reporting period.

28. The time spent on checks relating to imports from countries participating in VPA processes, and the complexity of those checks, was similar when compared to checks of non-VPA countries of the same risk level.

Checks planned and performed during the reporting period

Checks on operators placing domestic timber on the market

29. One operator placing domestic timber or timber products on the market was referred to OPSS as having met the criteria for being at risk of breaching the United Kingdom timber regulations. However, OPSS was unable to identify the operator and therefore no check was performed.

Checks on operators placing imported timber on the market

30. Planned checks of importers of international timber:

• 40 operators who had placed imported timber or timber products on the market were considered at risk of having breached the timber regulation
• OPSS planned to check 31 of these
• OPSS planned to check six traders and six monitoring organisations

31. Checks completed:

• 30 operators were checked - this corresponds to 31 separate checks - one check consisted of multiple desk-based document reviews and several on-site visits which included multiple sample takings
• 15 checks remained open at the end of the reporting period
• two checks were based on substantiated concerns from third parties
• two checks involved issues gaining access to premises or documentation
• one check revealed a mismatch compared to the declared information

32. Types of checks

• 31 checks were desk-based
• Six checks included scientific testing

Countries of origin

33. Operators had imported from the following countries: Belarus, Bosnia and Herzegovina, Brazil, China, Ghana, Malaysia, Myanmar, Russia, Solomon Islands, South Africa, Ukraine, and nine other countries.

Restriction on activities

34. During this period OPSS were not able to check all the operators they had initially planned to due to the following issues:

• an increase in substantiated concerns
• issues with accessing premises or documentation

Records

35. OPSS recorded the declared country, country of harvest, origin of the timber or timber products, type of timber and timber products (HS Code and denomination)

Products

36. The following HS Codes were subject to checks:

4401 – Fuel wood, in logs, in bitters, in twigs, in faggots or in similar forms: wood in chips or particles: sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms

4407 – Wood sawn or chipped, lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed of thickness exceeding 6 mm

4409 – Wood (including strips and friezes for paraquet flooring, not assembled). Continuously shaped (tongued, grooved, rebated chamfered, v-joint, moulded, rounded or the like) along any of its edges, end of faces, whether or not planed, sanded or end-jointed

4412 – Plywood, veneered panels and similar laminated wood

4418 – Builders’ joinery and carpentry of wood including cellular wood panels, assembled flooring panels, shingles and shakes

940350 – Wooden furniture

Implementation of the exemption for The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) under the timber regulation

36. Checks on operators during this reporting period revealed that some imported products did not comply with CITES. OPSS informed the appropriate personnel.

Remedial action

37. Effective enforcement of the timber regulation requires a robust framework of measures to be able to take effective, dissuasive and proportionate enforcement action. This includes sanctioning operators, traders and monitoring organisations for not meeting their obligations as laid out in the legislation.

38. OPSS may issue a notice of remedial action when the timber regulation has been breached. On receipt of this notice an operator needs to act within 28 days. There is no set timeframe within which a trader or a monitoring organisation needs to act. OPSS can also pursue other measures such as criminal prosecution in court with an unlimited fine. For breaches under the traceability obligation, OPSS can only refer to a court to issue or fine. It can also refer to Defra to consider withdrawal of recognition of a monitoring organisation.

Penalties

39. Breaches of prohibition (operators) can lead to a fine being applied, seizure of timber or timber products and imprisonment. The criminal fine of a specific monetary value is not set and is imposed by the Court:

• for breaches of due diligence obligations (operators and monitoring organisations) the available penalties are criminal fines and imprisonment
• for breaches of traceability obligations (operators and traders) criminal fines can be applied
• for breaches of reporting obligations (monitoring organisations) other penalties can be applied

40. If Timber or timber products are seized as a penalty for cases of breaches of prohibition, the enforcement agency imposes this penalty and is also responsible for disposing of or confiscating the timber and timber products. A maximum duration of imprisonment is 24 months imposed by the court.

41. OPSS set out their approach to dealing with non-compliance and resolving potential product safety issues in their enforcement policy. This policy details their approach to publishing information about enforcement actions. Data on which companies or online retailers have had remedial actions taken against them and why can be accessed on their website.

42. The details that OPSS publish include:

• company
• action taken and under which regulation
• when the action was issued
• product details
• how the regulations were breached

43. In this reporting period OPSS have undertaken the following enforcement actions:

• one prosecution
• four notices of remedial action
• ten notices of advice and guidance

Collaboration

44. OPSS occasionally collaborate with international enforcement authorities, customs authorities and CITES enforcement officers. Activities include exchanging data and information to implement or enforce the timber regulation in relation to the obligations for operators, traders and monitoring organisations. Since the UK left the EU, collaboration with the EU has been difficult due to OPSS not having access to official EU meetings. OPSS have instead engaged in informal cooperation through fora such as the timber regulation Enforcement Exchange (TREE) meetings.

45. During this reporting period OPSS shared data with the US Department of Justice as part of a joint enforcement operation and with CITES enforcement agents.

Raising awareness and building capacity

46. For the timber regulation to be effective, stakeholders need to be aware of how operators, traders, and monitoring organisations, as well as those involved in compliance verification and enforcement, operate. In addition, civil society, particularly consumers, should be made aware of the risk of illegally harvested timber or timber products being placed on the market and of the measures taken to address this issue. Successful dissemination of this information depends on the type of information campaign and the willingness of the audience to engage. OPSS devised a communication strategy to raise awareness of changes to the timber regulation in the lead up to the UK’s exit from the EU. More recently, as a result of Russia’s invasion of Ukraine, guidance has been provided to trade associations and monitoring organisations which addresses the issues raised by the events in Ukraine, Russia, and Belarus.

47. OPSS use various methods of engaging with stakeholders including hosting Timber Expert Panel (TEP) meetings, attending TREE meetings and presenting at virtual events hosted by other organisations. OPSS also engage with trade associations to pass information to their members on relevant issues relating to compliance. OPSS and the Department for Environment, Food and Rural Affairs (Defra) have also responded to questions from individual businesses concerning various issues, including changes in the obligations of businesses following the UK’s exit from the EU, importing Teak from Myanmar and importing timber from Ukraine, Russia, and Belarus.

48. OPSS have engaged with operators of domestic timber and imported timber, small and medium sized businesses, Trade Associations, monitoring organisations, civil society and scientific bodies. Of the 6,000 operators and traders targeted in 2021 financial year, four were federations of operators or traders, six were civil society organisations and scientific bodies and three were monitoring organisations.

Conclusion

49. The primary objectives of the Regulation are to tackle illegal logging and to create a demand for legally harvested timber. Illegal logging is a major driver of deforestation, leading to loss of ecosystem services and biodiversity, and contributing to climate change. It also affects rural communities that rely on forests for livelihoods, and results in revenue loss to government and legitimate business.

50. By imposing greater responsibility on those placing timber and timber products on the UK market for the first time, the regulations lead to the consolidation of legal practices in the timber sector. The requirements applied to those placing timber on the UK market for the first time have implications on the entire timber supply chain, driving the adoption of similar approaches in source countries. Implementing the Regulations enables the protection of forests around the world, ultimately supporting the government’s ambition to lead the world in environmental protection, end extreme poverty, and be at the forefront of action against global climate change.

51. Implementation of the UK timber regulation has been satisfactory over the reporting period. OPSS have engaged effectively with the sector, both individually and collectively, including through provision of updated guidance on the emerging situation in Russia and Ukraine. OPSS have carried out checks on businesses, as well as proportional and measured enforcement action where appropriate, in line with the regulators code.

52. The recent post implementation review on the Timber and Timber Products (Placing on the Market) Regulations 2013 published in March 2023 provides further information on the implementation of the timber regulations. The evidence base informing the review was too limited to draw firm conclusions on whether the overarching policy objectives have been achieved and we have committed to conduct further research on the questions of policy impact and cost to businesses.