China’s legal timberverification
ifi tisystemt

China Timber and Wood Products
Distribution Association (CTWPDA)
Zhu Guangqian
December 1010, Tokyo1. Domestic timber••

Domestic timber management is mainly reflected in timber cutting
license, timber transportation license and timber processing
license, the so-called “3 licenses” system.
Article 32, Forest Law: “Anyone who intends to cut down forest trees
must apply for a cutting license and the cutting must be carried out
pursuant to the provisions of the license; but exceptions should be madefor rural inhabitants who intend to cut down scattered trees belonging tothemselves and growing on plots of land allocated to them or aroundtheir houses.” “For cutting down forest trees by state-owned forestry
pand institutions,, government
gagencies,g, armyy units,, schools,,
enterprises
etc., the cutting license should be issued by the competent forestry
department at county level or above where they are located pursuant torelevant provisions upon examination and verification.” “For cutting
down forest trees along railway and highway and those in cities andtowns, cutting license should be issued by the competent department
concerned upon examination.” “Cutting licenses for cutting downy rural collective economic organizations
gshould beforest trees owned byissued by the competent department at the county level upon
examination.” “Cutting licenses required for rural inhabitants to cut
down forest trees on hills allocated for their private use and those of thecollective woods contracted out to individuals should be issued by thecompetent forestry department at the county level or the people’s
government at the township or town level authorized by it.”

Domestic timber: cutting license
Application form
Certificate offorest ownership

Timber cutting
licenseApproved documentof design• Timber cutting license is designed by the National
People’s Congress, and implemented by the State
Forestry Administration.

Domestic timber: cutting
g license• Regulations
egu a o s oon cucutting
g quo
quota：Annuala：ua quoquotasas forocutting down forests and forest trees owned the stateshould be worked out, taking a state enterprise,
institution, farm, factory or mine as a unit; for theforests and forest trees owned by the collective andthose individually owned, annual quota should beworked out by taking the county as a unit;• These quotas should then be aggregated and adjusted
by the competent forestry departments of provinces,autonomous
tregions,ior municipalities
i i liti andd examinedi dby the government at the corresponding level, before
they are submitted to the State Council for approval
approval.

Legalg liability
y for illegal
g cuttingg•

Whoever illegally cuts down forest or trees, when less than 0.5 m3 in volume, orless than 20 seedlings, will be instructed to plant 10 times the number of theillillegal
l cutt trees
tb thebyth competentt t forestry
ft departmentdt
t att countyt levelll or aboveb,and, the timber or incomes obtained by selling illegal timber will be confiscated,and pay a fine of 3 to 5 times of timber value;
Whoever illegally cuts down
forest or trees,
trees when
hen larger than 0.5
0 5 m3 in volume,
ol me or more than 20 seedlings,
seedlings
will be instructed to plant 10 times the number of the illegal cut trees by thecompetent forestry department at county level or above, and, the timber orincomes obtained by selling illegal timber will be confiscated,confiscated and pay a fine of 5
to 10 times of timber value; Whoever denudes forest or trees, when less than
2 m3 or 50 seedlings, will be instructed to plant 5 times the number of thedenuded trees by the competent forestry department at county,
county and pay a fine of
2 to 3 times of the timber denuded; Whoever denudes forest or trees, whenlarger than 2 m3 or 50 seedlings, will be instructed to plant 5 times the number ofthe denuded trees by the competent forestry department at county, and pay afine of 3 to 5 times of the timber denuded; Whoever deals with (or processes)
timber in forest area without permission, the timber dealt with and incomes
obtained from illegal
g business will be confiscated,, and ppay
y a fine of 2 times of theillegal income by the competent forestry government at county level or above .

Domestic timber: transportation
plicense• Timber transportation license is designed by the StateCouncil, and implemented by the State Forestry
Administration.

Certificates oflegal source

Quarantine
certificate
Other necessary
document

Certificate of timbertransportation
management

Legal liability for transportation
without license• Timber transportation management is an important step tomaintain regular order of timber transportation and toprevent illegal timber from entering distribution;• The total quantity of timber transportation approved must notexcess the total quantity of timber sold and shipped out as
designedgbyy the local annual timber harvest pplan;;• To those who transport timber without timber transportation
license, their illegally transported timber will be confiscatedby the competent forestry department at county level orabove, and pay a fine of under 30% of the timber value;• To those who transport timber using fake or altered timberttransportationt ti license,li
their
th i illegallyillll ttransportedt d titimberb willill
be confiscated by the competent forestry department atcounty or above level, and pay a fine of under 10% to 50%
off theth timberti b value.
lDomestic timber: Processing license• Timber transportation license is designed by the StateCouncil and implemented by the State Forestry
Council,Administration.
Suitable and fixed place
Suitable technology
and equipment
Provincial productquality examination report

Legal sourcecertification
Business Permit

Timber
Processing license

China’sChinas domestic timber is legal• It is necessary to get approved to deal with orprocess timber in forest areas by the competent
forestry department at county level or above.
Any timber dealing organizations or individuals
are not allowed to purchase timber without
cutting license or other legal source certificates;• Therefore, it can be seen that in China themanagement by “3 licenses” can show thelegality of domestic timber.

2. Import timber
1. Management of import timber in China(1)M i governmentt agencies(1)Maini
Concerning timber trade, Ministry of commerceandd ththe St
Statet Forestry
Ft Administration
Ad i i t ti are thethmain competent institutions; the General
Administration of Customs is the supervision
institution for imports and exports；GeneralAdministration of Quality Supervision
Supervision, Inspection
and Quarantine is responsible for quality
supervision,p, inspection
pand qquarantine. Thesefour institutions fully cooperate, and form themanagement system of timber imports andexports.

2. Import timber(2)Related law and regulations
China has a strict supervision process to timber imports. Institutions
g Ministry
y of Commerce,, China Customs and the Sate Forestryy
including
Administration supervise timber and wood products imports and combat
illegal activities together.
Related law and regulations include：• 1. CITES (the Convention on International Trade in Endangered
Species of Wild Fauna and Flora)• 2. Foreign Trade Law• 3. Forest Law, and its implementation regulations• 4. Customs Law• 5. Importp and Export
p Commodity
y Inspection
plaw, and its implementation
pregulations• 6. Law of Quarantine to Passing Customs, and its detailed
implementation regulations• 7. Management Regulations on import and export goods• 8. Regulations on the Administration of the Import and Export ofEndangered Wild Animals and Plants• 9. Regulations on Wild Plants Protection• 10. Administration Measures On Goods Export License

2. Importptimber(3) An introduction to policies and regulations
1 Customs
1.
1.1 Import tax
policy, China needs to protect• Since taking a open policyecological environment and develop its economy at ahigh speed, and implements a policy of forbidding illegal
llogging
i andd fforestt ddenudation,d ti
andd encouraging
i titimberb
imports. Imports of timber usually can be divided into two
categories:ca
ego es roundwood
ou d ood aandd sa
sawnwood.
ood Now,o , zeroe o tariff
afor roundwood and sawnwood. Quota management
system for roundwood was abolished. Value-added tax
rate for roundwood is 13%
13%, for sawnwood it is 17%17%.

2. Importptimber1.2 Customs procedures• When importing timber,
timber it is necessary to submit following 7
documents to Customs：• (1) CONTRACT(signed by two sides, provided by trade company)；• (2) INVOICE(issued by seller side, provided by trade company)；• (3) B/L(issued by shipment side, provided by trade company)；• (4) PACKING LIST(issued by consignor,consignor provided by tradecompany)；• ((5)) CERTIFICATE OF ORIGIN，(issued(byy related department of
the government at origin country, provided by trade company)；• (6) Certificates of endangered species (issued by endangered
species department
department, provided by Customs clearance company)；• (7) Inspection certification (issued by inspection and quarantine
agencies, provided by Customs clearance company).

3. Ideas on the verification oflegal import timber(1) Definition• Legal timber：Firstly, it is necessary to abide by forestry
related regulations
gin each country,
y sourced from legalgcutting, and forest management is undertaken inaccordance with related domestic law. It should include
the followings:
legal cutting concession, in accordance withregulations
gconcerning
g forest management,
genvironment,labor and welfare, health and safety, tax and copy rights,
international treaties, such as CITES. As for thedefinition of legal timber
timber, it should be made clear in theagreement by two signing countries. And it is also
necessary to set up a list of regulations that should beabided
bid d bby, whichhi h can bbe an iimportant part off verification
ifi isystem for timber legality.

3. Ideas on the verification oflegal import timber• “Signing countries”implies”
those countries which sign
the framework agreement for timber legality verification
system;• Timber legality verification system: For some concretetimber or wood productproduct, suppliers should promise thelegality of the source of the timber used. For imported
products, certificates showing legality issued by “signingcountries” can be used to verify its legality; or, it can beverified by certificates issued by internationally;recognized
i d fforestt certification
tifi ti schemes。AshA forf importittimber from countries other than “signing countries”, it isnecessary to provide certificates to show timber legality
or forest certificates.

3. Ideas on the verification oflegal import timber(2) Basic principles• 1. Respect every country’s sovereign rights. A country is asocial synthesis
yunit which is independent
pand inviolable. All theinternational regulations must take a full consideration ofsovereign rights;• 2.
2 AbidAbide bby Chi
China’s’ law
land
d regulations,l ti
as ththe titimberb llegality
lit
certificates are issued under the current framework of law andregulations;egu a o s;
• 3. Abide by WTO regulations and related internationalagreements, which is a measurement to enforce forest
resources to develop sustainably and to protect ecologicalenvironment;• 4.
4 Benefit to developing countries
countries, enforce the role ofgovernment.

3. Ideas on the verification oflegal import timber• Timber export country should provide
g y verification document:
timber legality
Through the negotiations between signingcountries the competent forestry
countries,
department verify the legality of timbersource to ensure that the timber isproduced and exported legally, and issue
unified legal document.

Th k You！
ThankY ！