In March 2013, new legislation prohibiting the placing on the market of illegally harvested timber will come into force.
Breaching the EU Timber Regulations will result in penalties which are likely to include fines proportionate to the environmental damage caused and the value of the timber, or timber products concerned. Further penalties may also include the seizure of products and possibly the suspension of authorisation to trade.
Companies selling or trading in timber products would therefore be well advised to ensure they are familiar with the requirements of the legislation and start to put into place the necessary systems to guarantee compliance.
The definition of 'timber and timber products' is vast and includes anything, from fuel wood to photo frames , paper and pulp as well as solid wood products, flooring, plywood etc. Printed papers including books, magazines and newspapers, recycled timber and timber products that have completed their life cycle are excluded from the regulations.
The regulations will apply to both operators, namely those who place a timber product on the EU market for the first time and traders that is all other participants in the supply chain, prior to the sale to the final consumer. The requirements for these two groups are different.
Operators are prohibited from placing timber on the EU market if it was illegally harvested. They must have in place a due diligence system to be able to provide certain specified information to the authorities, as well as documenting both risk assessment and risk mitigation procedures.
Traders, who are effectively anyone purchasing and selling timber products which have already been placed on the EU market, must keep records to enable traceability of products for a period of five years.
It is important that those who buy and sell timber products are fully aware of their obligations; those obligations are greater for an operator than they are for a trader.
Organisations need to fully understand which category they fall into at any given time. For example, if a purchasing team of a large retailer buys timber products from the Far East and ships them directly to the UK they will be an operator. However if the same organisation sells furniture supplied by an EU company they are a trader because they are buying from a company in the EU and are not placing timber on the EU market the first time.
The due diligence process required will follow a traditional risk management format and preparation and retention of documentation will be crucial to establishing any due diligence defence. Detailed rules on implementing measures in this area will be published by the European Commission later this year.
Retailers who buy and sell timber products should start to take steps now to ensure that their internal systems are capable of dealing with the challenge of the new regulations. They should also ensure that their buying staff are fully aware of the requirement of these regulations and that suitable information is obtained in order to be able to comply with them.