# Commission Decision (EU) 2015/1158Show full title

Commission Decision (EU) 2015/1158 of 8 July 2015 on the position to be taken by the Commission, on behalf of the European            Union, in the Joint Implementation Committee set up by the Voluntary Partnership Agreement between the European Union and            the Republic of Indonesia on Forest Law Enforcement, Governance and Trade in timber products into the European Union as regards            the amendments to the Annexes I, II, and V of the Voluntary Partnership Agreement between the European Union and the Republic            of Indonesia         

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U.K.

# Commission Decision (EU) 2015/1158                     

# of 8 July 2015

# on the position to be taken by the Commission, on behalf of the European Union, in the Joint Implementation Committee set                        up by the Voluntary Partnership Agreement between the European Union and the Republic of Indonesia on Forest Law Enforcement,                        Governance and Trade in timber products into the European Union as regards the amendments to the Annexes I, II, and V of the                        Voluntary Partnership Agreement between the European Union and the Republic of Indonesia                     

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Decision 2014/284/EU of 14 April 2014 on the conclusion of the Voluntary Partnership Agreement between                           the European Union and the Republic of Indonesia on forest law enforcement, governance and trade in timber products to the                           European Union(1), and in particular Article 4 thereof,                        

Whereas:

(1)the Voluntary Partnership Agreement between the European Union and the Republic of Indonesia on forest law enforcement, governance                              and trade in timber products to the European Union(2) (hereinafter referred to as ‘the Agreement’) entered into force on 1 May 2014.

(2)Article 22(3) of the Agreement provides for amendments regarding the Annexes to be adopted by the Joint Implementation Committee.

(3)There is a need to update the Annexes I, II, and V to the Agreement in order to reflect changes made after the conclusion                              of the Agreement in the relevant Indonesian legislation and guidelines concerning the application of the Indonesian Timber                              Legality Assurance System.

(4)The proposed changes are aimed at further strengthening the TLAS and facilitate participation in the system by all economic                              operators

(5)Therefore, Annexes I, II, and V to the Agreement should be amended accordingly.

(6)Those modifications should be approved on behalf of the European Union.

(7)This Decision is adopted in accordance with the opinion of the Committee on the Forest Law Enforcement Governance and Trade                              (FLEGT Committee),

HAS ADOPTED THIS DECISION:

# Article 1U.K.

The amendments to Annexes I, II, and V to the Voluntary Partnership Agreement between the European Union and the Republic                     of Indonesia on Forest Law Enforcement, Governance and Trade in timber products into the European Union are hereby approved                     on behalf of the European Union.                  

The position to be taken by the Commission, on behalf of the European Union, in the Joint Implementation Committee (JIC) set                     up by the Voluntary Partnership Agreement between the European Union and the Republic of Indonesia on Forest Law Enforcement,                     Governance and Trade in timber products into the European Union shall be based on the attached draft decision of the JIC.                  

# Article 2U.K.

After adoption of the amendments to Annexes I, II, and V to the Agreement by the JIC, the decision of the JIC shall be published                     in the *Official Journal of the European Union*, as well as the date of its entry into force.                  

# Article 3U.K.

This Decision shall enter into force on the day following that of its publication in the *Official Journal of the European Union*.                  

Done at Brussels, 8 July 2015.

*For the Commission*                            

*The President*                            

Jean-Claude Juncker                            

## ANNEXU.K.Decision No 3/2015 of the Joint Implementation Committee set up by the Voluntary Partnership Agreement between the European                        Union, of the one part, and the Republic of Indonesia, of the other part, adopting amendments to the Annexes I, II, and V                        of the Agreement

DraftU.K.                  

THE JOINT IMPLEMENTATION COMMITTEE,U.K.                  

Having regard to the Voluntary Partnership Agreement between the European Union and the Republic of Indonesia (hereinafter                     referred to as the ‘Agreement’), which following ratification by the Parties entered into force on 1 May 2014,                  

Whereas:

#### (a)The Agreement provides in Article 22, paragraph 3 that the Joint Implementation Committee may adopt amendments to the Annexes                        to this Agreement.U.K.

#### (b)The Parties have agreed that there is a need to update the Annexes I, II, and V to the agreement in order to reflect changes                        made after the conclusion of the Agreement in the relevant Indonesian legislation and guidelines concerning the application                        of the Indonesian Timber Legality Assurance System.U.K.

#### (c)The proposed changes are aimed at further strengthening the TLAS and facilitate participation in the system by all economic                        operators,U.K.

HAS DECIDED AS FOLLOWS:

### Article 1U.K.

The Annexes I, II and V to the Agreement are replaced by amended version as set out in the Annex to this Decision.

### Article 2U.K.

This Decision shall be drawn up in duplicate in the Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish,                     French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian,                     Spanish, Swedish and Indonesian (Bahasa Indonesia) languages, each of these texts being authentic. In case of divergence of                     interpretation the English text shall prevail.                  

### Article 3U.K.

This Decision shall enter into force on ....

Done at ..., on .../.../...

*For the Republic of Indonesia*                            

*For the European Union*                            

### ANNEX

#### “ANNEX I**PRODUCT COVERAGE**

The list in this Annex refers to the Harmonised Commodity Description and Coding System established by the International Convention                     on the Harmonised Commodity Description and Coding System of the World Customs Union.                  

#### ANNEX IATHE HARMONISED COMMODITY CODES FOR TIMBER AND TIMBER PRODUCTS COVERED UNDER THE FLEGT LICENSING SCHEME

Chapter 44:

Chapter 47:

Chapter 48:

Chapter 94:

Chapter 97:

#### ANNEX IBTHE HARMONISED COMMODITY CODES FOR TIMBER PROHIBITED FROM EXPORT UNDER INDONESIAN LAW

Chapter 44:

#### ANNEX II**LEGALITY DEFINITION**

##### INTRODUCTIONU.K.

Indonesian timber is deemed legal when its origin and production process as well as subsequent processing, transport and trade                     activities are verified as meeting all applicable Indonesian laws and regulations.                  

Indonesia has five legality standards articulated through a series of principles, criteria, indicators and verifiers, all                     based on the underlying laws, regulations and procedures. These standards can be further divided into sub-standards as described                     in the TLAS Guidelines.                  

The Indonesian legal framework also includes sustainable forest management standards defined for permit holders operating                     within production forest zones on state-owned land. All permit holders must comply with the criteria of legality as stipulated                     in the legality standards. Not later than the date when their first legality certification expires, permit holders operating                     within production forest zones on state-owned land must comply with both the legality standard and the sustainable forest                     management standard, as stipulated in the TLAS Guidelines.                  

Indonesia is committed to regularly review and improve the legality standards through a multistakeholder process.

The five legality standards are:

:

the standard for concessions within production forest zones on state-owned lands: Natural Forests, Plantation Forest, Ecosystem                        Restoration, Forest Management Right (Hak Pengelolaan);                     

:

the standard for community plantation forests and community forests within production forest zones on state-owned lands;

:

the standard for privately-owned forests;

:

the standard for timber utilisation rights within non-forest zones or from convertible production forest on state-owned lands;

:

the standard for primary and downstream forest based industries and traders.

The five legality standards apply to different types of timber permits as set out in the following table:

##### LEGALITY STANDARD 1: THE STANDARDS FOR CONCESSIONS WITHIN PRODUCTION FOREST ZONESU.K.

##### LEGALITY STANDARD 2: THE STANDARD FOR COMMUNITY PLANTATION FORESTS AND COMMUNITY FORESTS WITHIN PRODUCTION FOREST ZONESU.K.

##### LEGALITY STANDARD 3: THE STANDARD FOR PRIVATELY-OWNED FORESTSU.K.

##### LEGALITY STANDARD 4: THE STANDARD FOR TIMBER UTILISATION RIGHTS WITHIN NON-FOREST ZONES OR FROM CONVERTIBLE PRODUCTION FORESTU.K.

##### LEGALITY STANDARD 5: THE STANDARD FOR PRIMARY AND DOWNSTREAM FOREST-BASED INDUSTRIES AND TRADERSU.K.

#### “ANNEX V**INDONESIAN TIMBER LEGALITY ASSURANCE SYSTEM**

##### 1.**Introduction**U.K.

Objective: To provide assurance that harvesting, transportation, processing and selling of round logs and processed timber                     products comply with all relevant Indonesian laws and regulations.                  

Known for its pioneering role in combating illegal logging and the trade in illegally harvested timber and timber products,                     Indonesia hosted the East Asia Ministerial Conference on Forest Law Enforcement and Governance (FLEG) in Bali, in September                     2001, which resulted in the Declaration on Forest Law Enforcement and Governance (Bali Declaration). Since then, Indonesia                     has continued to be at the forefront of international cooperation in combating illegal logging and associated trade.                  

As part of international efforts to address these issues, a growing number of consumer countries have committed themselves                     to take measures to prevent trade in illegal timber on their markets, whilst producer countries have committed themselves                     to provide a mechanism assuring the legality of their timber products. It is important to establish a credible system to guarantee                     the legality of harvesting, transportation, processing and trade of timber and processed timber products.                  

The Indonesian Timber Legality Assurance System (TLAS) provides assurance that timber and timber products produced and processed                     in Indonesia come from legal sources and are in full compliance with relevant Indonesian laws and regulations, as verified                     by independent auditing and monitored by civil society.                  

###### 1.1.Indonesian laws and regulations as foundation of the TLASU.K.

The Indonesian regulation on the “Standards and Guidelines on the Assessment of Performance of Sustainable Forest Management                     and the Verification of Timber Legality in the State and Privately-owned Forests” (Forestry Minister's Regulation P.38/Menhut-II/2009)                     establish the TLAS. The TLAS also includes the Indonesian sustainability scheme and targets to improve forest governance,                     to suppress illegal logging and the associated timber trade to ensure credibility and to improve the image of Indonesia's                     timber products.                  

The TLAS comprises the following elements:

Legality Standards,

Control of Supply Chain,

Verification Procedures,

Licensing Scheme,

Monitoring.

TLAS is the basic system used to assure the legality of timber and timber products produced in Indonesia for export to the                     Union and to other markets.                  

###### 1.2.Development of the TLAS: a multi-stakeholder processU.K.

Since 2003, a wide range of Indonesian forestry stakeholders have been actively engaged in developing, implementing and evaluating                     the TLAS, thereby providing better oversight, transparency and credibility in the process. In 2009, the multi-stakeholder                     process resulted in the issuance of Forestry Minister's Regulation P.38/Menhut-II/2009, followed by DG Forest Utilization                     Technical Guidelines No 6/VI-SET/2009 and No 02/VI-BPPHH/2010, which were revised by Forestry Minister's Regulation P.68/Menhut-II/2011,                     P.45/Menhut-II/2012, P.42/Menhut-II/2013, DG Forest Utilization Technical Guidelines P.8/VI-SET/2011 and P.8/VI-BPPHH/2012.                  

Based on lessons learned from initial TLAS implementation, the results of the joint assessment in accordance to Annex VIII                     of this Agreement, and recommendations from various stakeholders, the regulations were again revised through a multi-stakeholder                     process to become Forestry Minister's Regulation P.43/Menhut-II/2014 in June 2014 and P.95/Menhut-II/2014 in December 2014,                     followed by DG Forest Utilization Technical Guidelines No.P.14/VI-BPPHH/2014 in December 2014 and No.P.1/VI-BPPHH/2015 in                     January 2015 (hereinafter referred to as the TLAS Guidelines).                  

The process of engagement with all stakeholders will be continued during implementation of the TLAS.

##### 2.**Scope of the TLAS**U.K.

Indonesian production forest resources can broadly be divided into two types of ownership: state forests and privately owned                     forests/lands. State forests consist of production forests for long-term sustainable timber production under a variety of                     permit types and forest areas that can be converted for non-forestry purposes such as for settlement or agricultural plantations.                     The application of TLAS on state forests and privately owned forests/lands is set out in Annex II.                  

The TLAS covers timber and timber products from all permit types as well as the operations of all timber traders, downstream                     processors, exporters and importers.                  

The TLAS covers timber products destined for domestic and international markets. All Indonesian producers, processors, and                     traders will be verified for legality, including those supplying the domestic market.                  

The TLAS requires that imported timber and timber products are cleared at customs and comply with Indonesia's import regulations.                     These regulations require that imported timber and timber products must be accompanied by documents and other pieces of evidence                     providing assurance of the legality of the timber in its country of harvest. All timber and timber products imported into                     Indonesia must be included in a supply chain whose controls comply fully with all relevant Indonesian regulations.                  

Certain timber products may contain recycled materials. Specific legality requirements for recycled timber are described in                     the legality standards and TLAS Guidelines.                  

Impounded timber may be sold for use exclusively on the domestic market, with the exception of impounded timber that was harvested                     in conservation forest, which must be destroyed. Any industry receiving impounded timber must implement measures to segregate                     that timber from other supplies and duly inform a conformity assessment body (CAB), which will promptly conduct a special                     audit to ensure that this timber does not enter the export supply chain. No impounded timber may be covered by an export licence.                  

Changes in the procedures for utilization and/or administration of timber from Customary Forests, to address implementation                     of Constitutional Court Decision (MK) No 35/PUU-X/2012, shall be introduced after the adoption of related implementing legislation.                  

Timber and timber products in transit are strictly kept outside the gazetted Principal Customs Areas (PCA). Thus, such transit                     timber does not enter the PCA and furthermore will not be included in the timber supply chains of Indonesia. No transit timber                     will be issued with an export licence.                  

###### 2.1.TLAS legality standardsU.K.

The TLAS is based on specific timber legality standards covering all types of timber sources (permits and operators) and all                     operators' activities. These standards and their verification guidelines are set out in Annex II.                  

The TLAS also incorporates the “Standard and Guidelines on Assessment of Performance in Sustainable Forest Management (SFM)”.                     The assessment of sustainable forest management using the SFM standard also verifies that the auditee complies with the relevant                     legality criteria of the TLAS. Permit holders operating within production forest zones on state-owned lands (permanent forest                     domain) must adhere to both relevant legality and SFM standards. They can opt for complying with the legality standard at                     first, but they must comply with both the legality standards and the sustainable forest management standards not later than                     the date when their initial legality certification expires.                  

##### 3.**Control of the Timber Supply Chain**U.K.

The permit holder (in the case of concessions) or landowner (in the case of private land) or company (in the case of traders,                     processors and exporters) shall demonstrate that every node of their supply chain is controlled and documented as set out                     in the Minister for Forestry Regulations P.30/Menhut-II/2012, P.41/Menhut-II/2014 and P.42/Menhut-II/2014 (hereinafter referred                     to as the Regulations). These Regulations require provincial and district forestry officials to undertake field verification                     and validate the documents which are submitted by permit holders, landowners, or processors at each node of the supply chain.                  

The key documents for operational controls at each point in the supply chain are summarised in Diagram 1.

All consignments in a supply chain must be accompanied by relevant transport documents indicating whether the material is                     covered by a valid SVLK certificate, or declared legal by use of Suppliers' Declaration of Conformity (SDoC), or originates                     from impounded sources. The owner or custodian of any consignment of timber or timber products at each point in a supply chain                     must record whether that consignment is SVLK certified, declared legal by use of Suppliers' Declaration of Conformity, or                     from an impounded source. If a consignment includes any impounded timber, the owner or custodian of that consignment must                     apply an effective system to segregate timber or timber products from verified legal sources, from impounded timber or timber                     products, and maintain records that distinguish between these sources.                  

Operators in the supply chain are required to keep complete records on received, stored, processed and delivered timber and                     timber products. These records must be sufficient to enable subsequent reconciliation of quantitative data between and within                     nodes of the supply chain. Such data shall be made available for provincial and district forestry officials to carry out reconciliation.                     Main activities and procedures, including reconciliation, for each stage of the supply chain and the role of the CABs in assessing                     the integrity of the supply chain, are further explained in the Appendix of this Annex.                  

###### *Diagram 1***Control of the supply chain which shows the required key documents at each point in the supply chain where data reconciliation                           takes place**U.K.

##### 4.**Institutional set-up for Legality Verification and Export Licensing**U.K.

###### 4.1.IntroductionU.K.

The Indonesian TLAS is based on an approach known as “operator-based licensing” which has much in common with product or forest                     management certification systems. The Indonesian Ministry of Forestry nominates a number of conformity assessment bodies (Lembaga                     Penilai/LP and Lembaga Verifikasi/LV) which it authorizes to audit the legality of operations of timber producers, traders,                     processors, and exporters (“operators”).                  

The conformity assessment bodies (CAB) are accredited by the Indonesian National Accreditation Body (KAN). CABs are contracted                     by operators who want their operations to be certified as legal. CABs are required to operate according to the ISO/IEC 17065                     guideline. They report the outcome of the audits to the auditee and to the Ministry of Forestry. Summaries of reports are                     made publicly available.                  

A CAB checks that the operator that is audited is operating in compliance with the Indonesian legality definition as contained                     in Annex II, including effective implementation of controls to prevent material from unknown sources entering its supply chains.                     When an auditee operating in state forests or a large industry (primary industry with a capacity above 6 000 m3/year, secondary industry with an investment above IDR 500 million) is found to be compliant, an SVLK legality certificate                     with a validity of 3 (three) years is issued. During this period, the CAB conducts annual surveillance visits to check that                     compliance is being maintained. For auditees operating small industries (primary industry with a capacity below 6 000 m3/year, secondary industry with an investment below IDR 500 million) the validity of the legality certificate is 6 (six) years,                     and 10 (ten) years for operators in privately owned forests/lands. In these cases CAB surveillance visits take place every                     second year (biennial).                  

Operators in privately owned forests/lands, household industries, craftsmen/artisans, primary industry that exclusively processes                     timber from privately-owned forests/lands and cannot directly export, registered depots (trading timber or processed timber                     that is exclusively sourced from privately owned forests/lands or from SVLK certified operations under Perum Perhutani), and                     importers can use Suppliers' Declaration of Conformity to demonstrate the legality of their timber and timber products and                     are therefore not audited by the CABs (refer to section 5.3).                  

LVs also act as export Licensing Authorities. They check the validity of the exporters' SVLK certificate and export registration,                     and the consistency of exporters' data declarations (monthly balance sheets) before issuing export licences in the form of                     V-Legal Documents or FLEGT licences. Thus exports of timber products covered by Annex I without an export licence are prohibited.                     Exports to the European Union that meet these conditions are issued with FLEGT licences, while exports to other destinations                     are issued with V-Legal Documents.                  

The TLAS Guidelines specify that Indonesian civil society groups, individuals and communities have the right to monitor the                     implementation of the TLAS on the ground. Such Independent Monitors are allowed to assess the compliance of operations against                     the requirements of the legality definition and also the conformity of the auditing and licensing processes against TLAS requirements                     and file complaints to CABs, Licensing Authorities, KAN and the Ministry of Forestry.                  

###### *Diagram 2***Relationship between different entities involved in implementing the TLAS**U.K.

###### 4.2.Conformity assessment bodies and Licencing AuthoritiesU.K.

The conformity assessment bodies (CABs) play a key role in the Indonesian system. They are authorized by the Ministry of Forestry                     and contracted by individual operators to verify the legality of the production, processing and trade activities of individual                     operators in the supply chain, including the integrity of the supply chain.                  

There are two types of CABs: (i) assessment bodies (Lembaga Penilai/LP) which audit the performance of Forest Management Units                     (FMUs) in state forests against the sustainability standards as well as the requirements of the legality standard; and (ii)                     verification bodies (Lembaga Verifikasi/LV), which audit FMUs, forest-based industries, traders and exporters against the                     legality standards.                  

In order to ensure that those audits that verify the legality standards as set out in Annex II are of the highest quality,                     the LP and LV are required to develop the necessary management systems addressing competency, consistency, impartiality, transparency,                     and assessment process requirements as outlined in ISO/IEC 17065. These requirements are specified in the TLAS Guidelines.                     The conformity assessment bodies (CAB) are accredited by the Indonesian National Accreditation Body (KAN).                  

LVs can also act as Licensing Authorities. In this case the LVs issue export licences to cover timber products destined to                     international markets. For non-Union markets, the Licensing Authorities will issue V-Legal Documents, and for the Union market,                     FLEGT licences will be issued in accordance with the requirements as outlined in Annex IV. Detailed procedures for the V-Legal                     Document and FLEGT licensing of export consignments are described in the TLAS Guidelines. LPs cannot act as Licensing Authorities                     and do not issue export licences.                  

All auditors working for CABs or Licensing Authorities must be registered and hold a valid certificate of competence from                     the Profession Certification Body (Lembaga Sertifikasi Profesi — LSP). The LSP will assess any alleged misconduct by an auditor                     brought to its notice, and may revoke the certificate of competence of that auditor.                  

###### 4.3.Accreditation bodyU.K.

The Indonesian National Accreditation Body (Komite Akreditasi Nasional — KAN) is an independent accreditation body established                     through Government Regulation (Peraturan Pemerintah/PP) 102/2000 concerning National Standardisation and Presidential Decree                     (Keputusan Presiden/Keppres) 78/2001 regarding the National Accreditation Committee. It operates under the guidance of ISO/IEC                     17011 (General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies). It has developed internal                     TLAS-specific supporting documents for the accreditation of LPs and LVs.                  

KAN is internationally recognised by the Pacific Accreditation Cooperation (PAC) and the International Accreditation Forum                     (IAF) to accredit certification bodies for Quality Management Systems, Environmental Management Systems and Product Certification.                     KAN is also recognised by the Asia Pacific Laboratory Accreditation Cooperation (APLAC) and the International Laboratory Accreditation                     Cooperation (ILAC).                  

On 14 July 2009, the KAN signed a Memorandum of Understanding with the Ministry of Forestry to provide accreditation services                     for the TLAS. This makes it responsible for the accreditation of CABs to ensure their continued compliance with ISO/IEC 17065.                  

Complaints concerning the performance of a LP or LV can be submitted by any interested party, including operators and independent                     monitors, to the KAN.                  

###### 4.4.AuditeesU.K.

Auditees are operators which are subject to legality verification. They include forest management units (concessionaires or                     timber utilization permit holders, community-based or village based forest permit holders, private forest/land owners), registered                     timber depots, forest-based industries, non-producer registered exporters. The forest management units and forest-based industries                     must comply with the applicable legality standard. For export purposes, the forest-based industries and non-producer registered                     exporters must comply with export licensing requirements. The TLAS allows auditees to submit appeals to the LP or LV on the                     conduct of or results of audits.                  

###### 4.5.Independent monitorU.K.

Civil society plays a key role in the Independent Monitoring (IM) of the TLAS. Civil society groups, individuals and communities                     acting as Independent Monitors have the right to assess and report on the compliance of operations against legality requirements,                     as well as on accreditation, verification and licensing activities. Findings from an Independent Monitor can also be used                     as part of the Periodic Evaluation (PE) which is required under this Agreement (Annex VI).                  

In the event of an irregularity related to the legality of an operator, complaints by an Independent Monitor shall be submitted                     directly to the concerned LP or LV. If they consider the response to a complaint by the LP or LV to be unsatisfactory, an                     Independent Monitor may file a report to the KAN and to the government. In case of complaints about the issuance of export                     licences, the Independent Monitor may directly file complaints with the Licensing Authority or with the Ministry of Forestry.                  

###### 4.6.The GovernmentU.K.

The Ministry of Forestry (as of October 2014, the Ministry of Forestry was merged with the Ministry of Environment to become                     the Ministry of Environment and Forestry) regulates the TLAS and authorises the accredited LPs to undertake SFM assessment                     and LVs to undertake legality verification.                  

The Ministry of Forestry also authorises the LVs to issue export licences (V-Legal Documents or FLEGT licences).

The Ministry of Forestry has issued a set of Guidelines providing the requirements related to verification and licensing activities.                     These Guidelines also include provisions for Ministry of Forestry's control over LVs verification, and specify the Ministry's                     procedures to authorize and oversee their licensing activities.                  

Furthermore, the Ministry of Forestry shall establish an ad-hoc follow-up team in charge of investigating on a case-by-case                     basis any reported violation in relation to the issuance of a legality certificate and/or V-Legal Document/FLEGT licence.                     The composition of the follow-up team depends on the nature of the violation reported. It can comprise different government                     agencies and civil society actors. Based on the follow-up team findings and recommendations, the Ministry of Forestry may                     revoke the authorization of the CAB resulting in an immediate cessation of their verification and licensing activities.                  

The Minister of Forestry will also immediately revoke their authorization of a CAB based on a KAN decision on withdrawal of                     its accreditation (e.g. resulting from KAN's annual surveillance activities of the CABs). CABs can appeal to KAN but not to                     the Ministry.                  

The Ministry of Forestry also regulates the Licence Information Unit (LIU) as an information management unit which validates                     information concerning V-Legal Document/FLEGT licence issuance. The LIU is also responsible for general information exchange                     on the TLAS, and receives and stores relevant data and information on the issuance of certificates of legality and V-Legal                     Documents/FLEGT licences. It also responds to queries from competent authorities of trading partners and stakeholders. The                     LIU also manages the due diligence based import recommendation process through its SILK online system.                  

In addition, the Ministry of Forestry controls the registration of technical governmental field supervisors (Wasganis) and                     technical company field staff (Ganis). Wasganis are tasked to carry out the supervision and control of log measurements. They                     also terminate the mandatory transport documents and carry out data reconciliation (for further details refer to the Appendix                     of this Annex). Ganis prepare the production and transport documents from all production in state forests. Ganis can also                     terminate the mandatory transport documents in the case of Wasganis' absence for more than 48 hours. Both Wasganis and Ganis                     are registered with the Ministry of Forestry. On a yearly basis, they are evaluated by the Ministry of Forestry through an                     official examination.                  

##### 5.**Legality Verification**U.K.

###### 5.1.IntroductionU.K.

Indonesian timber is deemed legal when its origin and production process as well as subsequent processing, transport and trade                     activities are verified as meeting all applicable Indonesian laws and regulations, as set out in Annex II. CABs carry out                     conformity assessments to verify compliance. To reduce the burden on private forest owners, as well as traders and household                     industries/craftsmen/artisans fully depending on timber from privately owned/privately utilized forests (private land permit),                     such operators are allowed in clearly described cases to issue a Supplier's Declaration of Conformity as an alternative to                     obtaining an SVLK certification (see paragraph 5.2 below for more detail).                  

###### 5.2.Legality verification process by CABsU.K.

In accordance with ISO/IEC 17065 and the TLAS Guidelines, the legality verification process consists of the following:

Application and contracting: The operator submits to the CAB an application that defines the scope of verification, operator's                     profile and other necessary information. A contract between the operator and the CAB, setting out the conditions for verification,                     is required prior to the commencement of the verification activities.                  

Verification plan: After the signing of the verification contract, the CAB prepares a verification plan, which includes nomination                     of the audit team, verification programme and schedule of activities. The plan is communicated to the auditee, to the relevant                     Provincial Forestry Authority and other relevant authorities at provincial and regional levels, and the dates of verification                     activities are agreed upon. This information shall be made available in advance for the independent monitors and to the public                     through the websites of the CABs and the Ministry of Forestry, and/or mass media or letters.                  

Verification activities: The verification audit consists of three stages: (i) opening audit meeting and coordination, (ii) document                     verification & field observation and (iii) closing audit meeting.                  
          -  Opening audit meeting and coordination: coordinate with relevant regional, provincial and district offices to inform about                           audit plans and to gather initial information from those offices. The CAB may also disseminate information and build communication                           with relevant CSOs to add to the initial information. The CAB discusses the audit's objective, scope, schedule and methodology                           with the auditee in the opening audit meeting, so as to allow the auditee to raise questions on methods and conduct of verification                           activities;                         
          -  Document verification and field observation stage: in order to collect evidence on the auditee's compliance with the Indonesian                           TLAS requirements, the CAB checks the auditee's systems and procedures, relevant documents and records. The CAB then carries                           out field checks to verify compliance, including cross-checking their findings with the findings of official inspection reports.                           The CAB also checks the auditee's timber traceability system to ensure that there is evidence that all timber entering the                           supply meets the legality requirements.                         
          -  Closing audit meeting: the verification results, in particular any non-compliances that may be detected, are presented to                           the auditee. The auditee may raise questions on the verification results and provide clarification on the evidence presented                           by the CAB.                         

Reporting and decision making: The audit team draws up a verification report, following a structure provided by the Ministry                     of Forestry. The report, which includes a description of any findings of non-compliances and the decision on certification                     taken, is shared with the auditee within fourteen calendar days after the closing audit meeting and submitted by the CAB to                     the Ministry of Forestry.                  

The audit team findings are used primarily to decide on the outcome of the verification audit by the CAB. The CAB takes the                     decision on whether to issue a legality certificate based on the verification report prepared by the audit team.                  

In cases of any non-compliance, the CAB will refrain from issuing a legality certificate, which will prevent the timber from                     entering the supply chain of verified legal timber. Once the non-compliance has been addressed, the operator may resubmit                     a request for legality verification.                  

Infringements, which are discovered by a CAB during the verification, are reported to the Ministry of Forestry and handled                     by the responsible authorities in accordance with administrative or judicial procedures. If an operator is suspected of breaching                     regulations, the national, provincial and district authorities may decide to halt the operator's activities.                  

Issuance of the legality certificate and recertification: the CAB will issue a legality certificate if an auditee is found                     to fully comply with all the indicators and verifiers in the legality standard, including the rules on control of the timber                     supply chain.                  

The CAB may report at any time to the Ministry of Forestry on issued, changed, suspended and withdrawn certificates and every                     three months shall issue a report. The Ministry of Forestry will then publish these reports on its website.                  

According to the type of permit held by the auditee, a legality certificate is valid for a period of three to 10 years, after                     which the operator is subject to a re-certification audit. The re-certification shall be done prior to the expiry date of                     the certificate.                  

Surveillance: According to the type of permit held by the auditee, operators with a legality certificate are subject to annual                     or biennial surveillance that follow the principles of the verification activities summarised above. The CAB may also carry                     out surveillance earlier than scheduled if the scope of the verification has been extended.                  

The surveillance team draws up a surveillance report. A copy of the report, including a description of any non-compliance                     found, is submitted to the Ministry of Forestry. Non-compliances detected by the surveillance will result in suspension or                     withdrawal of the legality certificate.                  

Special audits: Operators with a legality certificate are obliged to report to the CAB any significant changes in ownership,                     structures, management, and operations that may affect the quality of its legality controls during the period of validity                     of the certificate. The CAB may carry out special audits to investigate any complaints or disputes filed by the independent                     monitors, government institutions or other stakeholders or upon receipt of the operator's report on changes that affect the                     quality of its legality controls. CABs also carry out special audits if the operator reports that he intends to process impounded                     timber.                  

###### 5.3.Legality verification using Supplier's Declaration of Conformity (SDoC) and internal checksU.K.

Supplier's declaration of conformity based on SNI/ISO 17050 is a “self-declaration” as defined in ISO/IEC 17000, i.e. first-party                     attestation following review that fulfilment of specific requirements has been demonstrated.                  

The SDoC can be used by (i) private forest owners, (ii) registered timber depots (only timber depots that exclusively receive                     timber from privately owned forests/lands or receive SVLK certified timber from Perum Perhutani), (iii) household industries/craftsmen/artisans,                     (iv) primary and secondary industries that exclusively process timber from privately owned forests/lands and hold no export                     permit. The SDoC applies to (a) timber from privately-owned forests/lands, (b) timber from regenerations of roadsides and                     graveyards, (c) recycled/demolished timber, and (d) imported timber or timber products.                  

The SDoC contains information about the supplier, products and their sources, transport document, recipient of the products,                     and date of issuance. The SDoC by private forest owners shall also include a proof of ownership of the land the timber comes                     from. The SDoC is attached to the transport document based on timber administration regulations. Detailed procedures for SDoC                     issuance and related checks are provided in the TLAS Guidelines.                  

The recipient of the SDoC from privately owned forest shall undertake and document internal checks on the validity of the                     information to be declared in the SDoC prior to signing of the purchase contract and at least once a year after the contract                     has been signed. Information contained in SDoCs issued by timber depots is checked by the recipient of the SDoC (primary or                     secondary industries) in intervals of three months for the traceability of log sources. This is verified by CABs when conducting                     an SVLK audit of the recipient through document review in case the recipient is certified. In addition, the Ministry of Forestry                     can carry out random inspections, which may be contracted to competent third parties. In indications of fraud and irregularities,                     the Ministry of Forestry can conduct special inspections of the operator which uses SDoC.                  

All timber products covered by a V-Legal Document or FLEGT licence must come from a SVLK certified and or SDoC supply chain.                     Timber and timber products covered by SDoC cannot directly access international markets. Such access is only possible through                     a SVLK certified operator.                  

###### 5.4.Legality verification of imported timber and timber productsU.K.

Minister for Trade regulation 78/M-DAG/PER/10/2014 states that imported timber and timber products require proof of legality                     in the country of harvest. In this context, the SDoC template is also used for imports. Only registered importers (traders)                     and processing operators can import timber and/or timber products into Indonesia. These operators must exercise due diligence                     on imported timber and/or timber products to minimize the risk of illegal timber entering the Indonesian supply chain. They                     are required to provide information such as HS codes of products, Bill of Lading, countries of harvest, country of origin,                     proof of timber legality, and port of export in the declaration template. The due diligence procedures encompass data collection,                     risk analysis and risk mitigation. Procedures are carried out using the SILK online system of the Ministry of Forestry. The                     Ministry issues an import recommendation to the Ministry of Trade after assessing each due diligence process conducted by                     an operator.                  

CABs when conducting audits of the importer carry out document review of the due diligence system applied. Detailed procedures                     for the due diligence system and related checks will be provided in the TLAS guidelines and related import regulations.                  

###### 5.5.Government responsibility for enforcementU.K.

The Ministry of Forestry, as well as provincial and district forestry offices are responsible for the control of timber supply                     chains and checking of related documents (e.g. annual work plans, log felling reports, log balance-sheet reports, transport                     documents, logs/raw material/processed products balance-sheet reports and production tally sheets). In the event of inconsistencies,                     forestry officials may withhold approval of the control documents resulting in a suspension of operations.                  

Infringements detected by forestry officials or by independent monitors are communicated to the CAB, which upon verification                     may lead the CAB to suspend or withdraw the awarded legality certificate. Forestry officials may take appropriate follow-up                     action in accordance with the regulatory procedures.                  

The Ministry of Forestry also receives copies of the verification reports and subsequent surveillance and special audit reports                     issued by the CABs. Infringements discovered by the CABs, by forestry officials or by independent monitors are communicated                     between the involved actors and handled in accordance with administrative and judicial procedures. If an operator is suspected                     of breaching regulations, the national, provincial and district authorities may decide to suspend or halt the operator's activities.                     CABs immediately revoke the legality certificates if the requirements of the legality standard are no longer met.                  

The Ministry of Forestry shall establish an ad-hoc task force in charge of inquiring and investigating any reported violation                     in relation to the issuance of a legality certificate and/or V-Legal Document/FLEGT licence (follow up team) on a case-by-case                     basis.                  

##### 6.**FLEGT Licensing**U.K.

The Indonesian export licence for legal timber products is known as the “V-Legal Document”. This is an export licence that                     provides evidence that the timber products exported meet the requirements of the Indonesian legality standard as set out in                     Annex II and were sourced from a supply chain with adequate controls against the inflow of timber from sources not verified                     as legal. The V-Legal Document is issued by the LVs who act as Licensing Authorities (LA) and will be used as a FLEGT licence                     for shipments to the Union once the parties have agreed to start the FLEGT licensing scheme.                  

The procedures for issuing FLEGT licences/V-Legal Documents are provided in the TLAS Guidelines.

The Ministry of Forestry has established a Licence Information Unit to maintain an electronic database with copies of all                     V-Legal Documents/FLEGT licences and LA non-compliance reports. The Licence Information Unit will grant on-line access to                     its database to the competent authorities of the Union. In the event of an inquiry concerning the authenticity, completeness,                     and validity of a specific FLEGT licence, the competent authority in the Union will be able to verify the licence information                     by using the SILK on-line database. For further information, the competent authorities of the Union can contact the Licence                     Information Unit, which will communicate with the relevant LA if needed.                  

The V-Legal Document/FLEGT licence is issued at the point at which the consignment is consolidated prior to export. The procedure                     is as follows:                  

The V-Legal Document/FLEGT licence is issued by the LA, which holds a contract with the exporter, for the consignment of timber                              products to be exported.                           

The exporter's internal traceability system shall provide evidence on the legality of timber for export licensing. The previous                              stage of the supply chain shall be included in the exporter's internal traceability system.                           

For a V-Legal Document/FLEGT licence to be issued, all suppliers in the exporter's supply chain that make up the consignment                              must have been covered by a valid legality or SFM certificate or a SDoC.                           

To obtain a V-Legal Document/FLEGT licence, an operator must be a registered exporter (an ETPIK holder) who possesses a valid                              legality certificate. The ETPIK holder submits a letter of application to the LA and attaches the following documents to demonstrate                              that the timber raw materials in the product originate only from verified legal sources (SVLK certified or SDoC declared):                           

A summary of the transport documents for all timber/raw materials received by the factory since the last audit (up to max                                       12 months); and                                    

Summaries of Timber/Raw Material Balance-Sheet Reports and Processed Timber Balance-Sheet Reports since the last audit (up                                       to max 12 months).                                    

The LA then carries out the following verification steps:

Verification of the validity of the operator's legality certificate and ETPIK registration, using LA's own database as well                                       as SILK.                                    

Data reconciliation based on the summaries of the transport documents, Timber/Raw Material Balance-Sheet Report, and Processed                                       Timber Balance-Sheet Report;                                    

Control of the recovery rate(s) for each type of product (primary industry only), based on analysis of the Timber/Raw Material                                       Balance-Sheet Report and Processed Timber Balance-Sheet Report.                                    

Where necessary, a field visit may be conducted by the LA after data reconciliation so as to ensure consistency with the information                                       to be specified in the V-Legal Document/FLEGT licence. This may be done through export consignments sample checking and inspecting                                       the factory operation or timber depot, and record-keeping.                                    

Result of verification:

If an ETPIK holder complies with legality and supply chain requirements, the LA issues a V-Legal Document/FLEGT licence in                                       the format presented in Annex IV;                                    

An ETPIK holder meeting the above mentioned requirements may use conformity marking (V-Legal Label) on the products and/or                                       packaging. National Guidelines on the use of conformity marking are described in the TLAS Guidelines.                                    

If an ETPIK holder does not comply with the legality and supply chain requirements, LA will issue a non-compliance report                                       instead of V-Legal Document/FLEGT licence. The non-compliance report halts the movement of the related timber and/or timber                                       products.                                    

In case a shipment changes configuration before leaving the port of export (e.g. change of destination, volume, species as                                       defined in the TLAS Guidelines), the exporter must request the Licensing Authority to cancel the initial export license and                                       issue new licence(s). The Licensing Authority must inform LIU of all cancelled export licences.                                    

In case of misuse or falsification of legality certificates and/or export licences by an operator, a sanction shall be imposed                                       by the Ministry of Forestry as defined in applicable regulations.                                    

The LA shall:

Forward a copy of a V-Legal Document/FLEGT licence or non-compliance report to the Ministry of Forestry within twenty four                                       hours from the time the decision was taken;                                    

Submit a comprehensive report and a public summary report outlining the number of V-Legal Documents/FLEGT licence issued as                                       well as the number and type of non-compliances detected to the Ministry of Forestry once every three months with copies to                                       the Ministry of Trade and Ministry of Industry.                                    

##### 7.**Monitoring**U.K.

The Indonesian TLAS includes civil society monitoring (Independent Monitoring). To make the system even more robust for a                     FLEGT-VPA, a Period Evaluation (PE) component is added.                  

IM is carried out by civil society to assess compliance of the operators, LPs, LV, and LAs with the Indonesian TLAS requirements                     including accreditation standards and Guidelines. Civil society is defined in this context as Indonesian legal entities including                     NGOs, communities, and individual Indonesian citizens.                  

The objective of PE is to provide independent assurance that the Indonesian TLAS is functioning as described, thereby enhancing                     the credibility of the FLEGT licences issued. PE makes use of the findings and recommendations of IM. Terms of Reference for                     PE are set out in Annex VI.                  

#### Appendix**Control of the Supply Chain**

As described in Annex V, all along the different supply chains, operators' declarations and record keeping (e.g. transport                     documents and balance-sheet reports) must indicate whether timber or timber products are SVLK certified, declared legal by                     use of Suppliers' Declaration of Conformity (SDoC), or from an impounded source.                  

##### 1.DESCRIPTION OF THE OPERATIONAL CONTROL OF THE SUPPLY CHAIN FOR TIMBER FROM STATE-OWNED FORESTSU.K.

Operational controls of the supply chain for state-owned forests (natural forests and plantation forests) are regulated by                     Minister for Forestry regulations P.41/Menhut-II/2014 and P.42/Menhut-II/2014 on timber administration. This includes Minister                     for Forestry regulation P.43/Menhut-II/2014 on SVLK standards, followed by DG Forest Utilization Technical guidelines P.14/VI-BPPHH/2014                     and DG circulation letter SE 8/VI-BPPHH/2014 in August 2014.                  

All procedures and rules for decision-making related to verification, data reconciliation and non-compliance management at                     each stage of the supply chain listed below apply to all kinds of forest permits granted on state-owned forests: natural forest                     concessions (IUPHHK-HA/HPH), industrial plantation forest concessions (IUPHHK-HT/HPHTI), ecosystem restoration concessions                     (IUPHHK-RE), management right for plantation forests (Perum Perhutani), community forest plantation concessions(IUPHHK-HTR)                     and community forest concessions (IUPHHK-HKM), village forest concessions (IUPHHK-HD), utilization of timber from reforestation                     area concessions (IUPHHK-HTHR)and utilization of timber from non-forest zones or convertible production forest (IPK).These                     procedures and rules are described in the technical guidelines provided in Minister for Forestry regulations P.41/Menhut-II/2014                     and P.42/Menhut-II/2014 on timber administration.                  

All operators holding a harvesting permit for timber from a natural forest concession must declare all their production data                     in the national online-tracking system at each stage of the supply chain from the forest concession until intermediate log-yard                     and primary industry.                  

###### 1.1.**Felling Site**U.K.

Main activities:
                -  Timber cruising (enumeration of trees for natural forest concessions or Perum Perhutani) or timber inventory (for plantation                                    forest concessions or to propose an IPK) by the permit holder;                                  
                -  Preparation of a Timber Cruising Report or Timber Inventory Report by the permit holder; 
                -  Verification and approval of the Timber Cruising Report or Timber Inventory Report by the district forestry official; 
                -  Submission of a Proposed Annual Work Plan (or Work Plan/*Bagan Kerja* to propose an IPK) by the permit holder;                                  
                -  Approval of the Annual Work Plan(or Work Plan/*Bagan Kerja* for IPK) by the provincial forestry official;                                   Note that an operator holding a valid SFM certificate issued under the SVLK can self-approve and issue his Annual Work Plan.                                    Conformity of the Annual Work Plan is verified by the CAB when carrying out initial and surveillance audits.                                  
                -  Harvesting operations by the permit holder, including skidding of logs to the log-landing site. 

Procedures:
                -  Timber cruising (enumeration of trees) for natural forest concessions or Perum Perhutani, is conducted by the permit holder                                    using tags. These tags are made up of three detachable sections, attached to the stump, harvested log, and the operator report.                                    Each section contains the necessary information required for timber tracking, including the number of the tree and its location.                                    Timber inventory for plantation forest concessions or IPK is conducted by permit holders;                                  
                -  The permit holder prepares a Timber Cruising Report or a Timber Inventory Report, which contains information on the number,                                    estimated volume, preliminary species identification, and location of trees (or harvesting location for plantation forest                                    concessions or IPK) to be harvested, and a summary, using official Ministry of Forestry Forms;                                  
                -  The permit holder submits the Timber Cruising Report or the Timber Inventory Report to the district forestry official. The                                    official conducts both a document-based and field verification of the Timber Cruising Report or the Timber Inventory Report                                    on a sample basis. The official approves the Report if all declared data match field observations.                                  
                -  The Timber Cruising Report (or the Timber Inventory Report) provides the basis for the Proposed Annual Work Plan (or Work                                    Plan/Bagan Kerja), which is prepared by the permit holder and submitted to the district forestry officer for review and to                                    the provincial forestry officer for approval. The district forestry official reviews and cross-checks the Proposed Annual                                    Work Plan (or Work Plan/Bagan Kerja) against the approved Timber Cruising Report (or the Timber Inventory Report) and approves                                    the work plan if all is in order. The official approval is not required for a permit holder who has passed SFM certification                                    with a good grade as described in TLAS Guidelines. Once the Annual Work Plan (or Work Plan/Bagan Kerja) is approved by the                                    official, the permit holder is allowed to commence harvesting operations;                                  
                -  During harvesting operations, tags are used to ensure that the log is from an approved felling site, as described above. For                                    planted trees or trees harvested in plantation forest concessions (for pulp or chip purposes), tags are not required.                                  

###### 1.2.**Log-Landing Site**U.K.

Main activities:
                -  Where necessary, cross cutting of the logs by the permit holder, and marking of such logs so as to ensure consistency with                                    the Log Production Report. Marking is not applied for plantation forest concessions for pulp or chip purposes;                                  
                -  Scaling (measurement) and grading of logs by the permit holder. Grading is not applied for plantation forest concessions (for                                    pulp or chip purposes);                                  
                -  Preparation of a log-list by the permit holder; 
                -  Submission of Proposed Log Production Report by the permit holder; 
                -  Approval of the Log Production Report by the technical governmental field supervisor (Wasganis). 

Procedures:
                -  The permit holder marks all cross-cut logs (not applied for plantation forest concessions for pulp or chip purposes); 
                -  The permanent physical marking of logs consists of the original tree ID number and other marks enabling the log to be linked                                    to the approved felling site (not applied for plantation forest concessions for pulp or chip purposes);                                  
                -  The permit holder scales and grades all logs and records the information on the logs in a log-list using an official Ministry                                    of Forestry Form (grading not applied for plantation forest concessions for pulp or chip purposes);                                  
                -  The permit holder uploads the log-list data in the national online tracking system. Unique barcodes issued via the online                                    tracking system must be tagged on the corresponding logs and strains, and labelled in the related transport document (only                                    applied for natural forest concessions);                                  
                -  Based on the log-list, the permit holder prepares a periodic Log Production Reports and the related summary report using official                                    Ministry of Forestry Forms;                                  
                -  The permit holder periodically submits the Log Production Reports and the related summaries to the Wasganis for approval; 
                -  The Wasganis carries out sample-based physical verification of the reports. The result of the physical verification is summarised                                    in a log-verification-list using an official Ministry of Forestry Form;                                   Subject to a positive outcome of the sample-based physical verification, the Wasganis approves the Log Production Reports;                                    In case of 48 hours are exceeded since the report submission, the designated technical company staff (Ganis) of the permit                                    holder can self-approve and issue the Log Production Reports on its own responsibility (not applied for IPK);                                  
                -  Once logs have been verified by the Wasganis, they must be stacked separately from any non-verified logs; 
                -  The Log Production Report is used to calculate the required payment of the Forest Resources Fee and to the Reforestation Fund                                    (as applicable);                                  
                -  The permit holder monthly submits the approved Log Production Reports and the related summaries to the district forestry office. 

Data reconciliation:
                -  For natural forest concessions or ecosystem restoration concessions or community forests concessions or village forest concessions                                    or IPK:                                   The district forestry official checks the number of logs, the tags and the total cumulative volume of logs extracted and declared                                    in the Log Production Report against the quota approved in the Annual Work Plan. Tags are not applied for IPK.                                  
                -  For industrial plantation forest concessions or Perum Perhutani or community forest plantation concessions or utilization                                    of timber from reforestation area concessions:                                   The district forestry official checks the total cumulative volume of logs extracted and declared in the Log Production Report                                    against the approved quota in the Annual Work Plan.                                  
                -  The Log Production Reports are also checked by CABs during initial and surveillance audits. CABs also organize field inspections                                    on an ad-hoc basis when needed as described in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the district forestry official informs the CAB in charge of verifying the compliance                                    of the operator, and vice-versa.                                  

###### 1.3.**Log-Yard**U.K.

Logs are transported from the log-landing site to log yards and then either directly transported to a processing mill, to                     an intermediate log-yard or to a registered timber depot.                  

Main activities:
                -  In the case the Log Production Report has not yet been approved at the Log-Landing Site: Preparation of a log-list by the                                    permit holder; Submission of Proposed Log Production Report by the permit holder; Approval of the Log Production Report by                                    the Wasganis;                                  
                -  Invoicing by the district forest office and payment of relevant amount for the Forest Resources Fee and to the Reforestation                                    Fund by the permit holder based on the approved Log Production Reports;                                  
                -  Issuance a Log Transport Document by the Ganis, to which is annexed a log-list; 
                -  Preparation of a Log Balance-Sheet Report by the permit holder. 

Procedures:
                -  If using the national online log tracking system, the permit holder may submit the Log Production Reports and the related                                    summary report to the Wasganis for approval; the Wasganis carries out sample-based physical verification of the reports, if                                    not already approved at the log-landing site. The result of the field inspection is summarised in a log-verification-list                                    using an official form established by the Ministry of Forestry; subject to a positive outcome of the field inspection, the                                    official approves the reports; in case 48h is exceeded after the submission of the Log Production Reports and the related                                    summary report, the Ganis self-approves the reports on its own responsibility (not applied for IPK);                                  
                -  The permit holder submits a request to settle the relevant fees to the district forestry official in charge of billing, based                                    on the log–list, which is attached to the request;                                  
                -  Based on the aforementioned request, the district forestry official issues an invoice or invoices for settlement by the permit                                    holder;                                  
                -  In case 48 hours are exceeded after the submission of the request, the permit holder can issue the related invoice or invoices                                    engaging its own responsibility;                                  
                -  The permit holder pays the amount set out in the Forest Resources Fee and/or Reforestation Fund Invoice(s) and/or stumpage                                    value and the district forestry official issues a receipt or receipts for this payment. Stumpage value only applied for HTHR                                    or IPK;                                  
                -  The permit holder submits a request for the issuance of Log Transportation Documents, accompanied by the payment receipt,                                    log-list, and Log Balance-Sheet Report;                                  
                -  The Ganis issues the Log Transport Documents to accompany the log-list; 
                -  The permit holder prepares/updates the Log Balance-Sheet Report to record the quantity of incoming, stored and outgoing logs                                    at the log-yard.                                  
                -  The permit holder monthly submits the Log Balance-Sheet Report to the district forestry office. 

Data reconciliation:
                -  The district forestry official checks the Log Balance-Sheet Report comparing inflows, outflows and storage of logs at the                                    log-yard, based on Log Production Reports and relevant Log Transport Documents. When needed, the district forestry official                                    also carries out field inspections to assess the consistency between stocked logs, the balance-sheet report and relevant transport                                    documents. TheLog Balance-Sheet Report is also checked by CABs during initial and surveillance audits. CABs also organize                                    field inspections on an ad-hoc basis when needed as described in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the district forestry official informs the CAB in charge of verifying the compliance                                    of the operator, and vice-versa.                                  

###### 1.4.**Intermediate Log-Yard**U.K.

Intermediate log-yards are used if logs are not transported from the concession area directly to the mill yard. Intermediate                     log-yards are used in particular for inter-island transportation of logs or if the transport mode is changed.                  

The permit for establishment of an intermediate log-yard located in state forests is granted by the district forestry official                     based on a proposal submitted by the permit holder. An intermediate log-yard permit is valid for three years, but can be extended                     following review and approval by the forestry official. The establishment of an intermediate log-yard located outside state                     forests does not require any specific permit and is determined by the permit holder.                  

Main activities:
                -  Termination of the validity of the Log Transport Document for timber from natural forests by a district forestry official;  In case 48 hours are exceeded after the submission of Log Transport Document, termination of its validity can be done by the                                    Ganis.                                   In addition, termination of the validity of the Log Transport Document can be done by the Ganis only in the case of:  (i)
an operator using timber from natural forests declaring its production through the online log tracking system, or
(ii)
an operator using plantation timber (only applied for plantation forest concessions for pulp or chip purposes);
 
                -  Preparation of Log Balance-Sheet Report by the permit holder; 
                -  Preparation of log-list by the Ganis; 
                -  The Ganis completes the Log Transport Document following the format provided by the Ministry of Forestry. 

Procedures:
                -  The Wasganis physically verifies the number, species, and dimensions of incoming logs by counting them (census) or on a sample                                    basis if the number of logs exceeds 100;                                   In the case of 48 hours are exceeded after the Log Transport Document was submitted, this verification can be done by the                                    Ganis.                                   The Ganis can also carry out this verification in the case of:  (i)
an operator using timber from natural forests declaring its production through the online log tracking system, or
(ii)
an operator using timber from plantation forests (only applied for plantation forest concessions for pulp or chip purposes);
 
                -  Subject to a positive outcome of the verification, the Wasganis terminates the validity of the Log Transport Document for                                    the incoming logs and records the logs in the Log Balance-Sheet Report;                                  
                -  The permit holder prepares a Log Balance-Sheet Report as a means to control the inflow and outflow of logs at the intermediate                                    log-yard;                                  
                -  For the outgoing logs, the Ganis prepares a log-list, which is linked to the previous Log Transport Documents; 
                -  The Log Transport Document for moving logs from the intermediate log yard is completed by the Ganis; 
                -  The permit holder updates the Log Balance-Sheet Report, which records inflows, outflows and storage of logs at the intermediate                                    log-yard, based on the relevant Log Transport Documents;                                  
                -  The permit holder monthly submits the Log Balance-Sheet Report to the district forestry office. 

Data reconciliation:
                -  The district forestry official checks the Log Balance-Sheet report to assess the consistency between the logs transported                                    from the log-yard and the logs entering the intermediate log-yard. When needed, the district forestry official also carries                                    out field inspections to assess the consistency between stocked logs, the balance-sheet report and relevant transport documents.                                  
                -  The Log Balance-Sheet report is also checked by CABs during initial and surveillance audits. CABs also organize field inspections                                    on an ad-hoc basis when needed as described in the TLAS Guidelines.                                  

##### 2.DESCRIPTION OF THE OPERATIONAL CONTROL OF SUPPLY CHAINS OF TIMBER FROM FOR PRIVATELY OWNED FORESTS/LANDSU.K.

Timber harvesting operations on privately-owned forests/lands are regulated by Minister of Forestry Regulation P.30/Menhut-II/2012                     (hereinafter referred to as the Regulation).                  

There are no legal requirements for the private owners of forests/lands to affix ID tags or marks on trees inventoried for                     harvesting. Log-yards and intermediate log-yards are generally not used for timber harvested from privately-owned forests/lands.                  

Control procedures for timber from privately-owned forests/lands differ between logs obtained from trees which were on the                     site when the land title was acquired and logs obtained from trees that have been established since the title was acquired.                     They also depend on the tree species harvested. The payment of the Forest Resources Fee, to the Reforestation Fund and stumpage                     fee apply to logs from trees already present on the site when the land title was awarded but does not apply to logs from trees                     established after the award of the land title.                  

In the case of logs harvested from trees established after granting of the land title, there are two scenarios:
          -  for species listed in Article 5(1) of the Regulation (such as Rubber, Sengon, and fruit trees), the owner prepares an invoice,                           following the format provided by the Ministry of Forestry which serves as the Transport document.                         
          -  for other species (such as Teak, Mahogany, Pine), the trained and appointed head of the village or appointed official issues                           the Transport document.                         

In the case of logs harvested from trees present on a site before the granting of the land title, the district forestry official                     issues the Transport document. Such timber needs to be SVLK certified.                  

###### 2.1.**Felling/Log-Landing Site**U.K.

Main activities:
                -  Recognition of the property right; 
                -  Where necessary, cross-cutting; 
                -  Scaling (measurement); 
                -  Preparation of a log-list; 
                -  Invoicing by the district forestry office and payment of the invoiced amount by the owner of the Forest Resources Fee and/or                                    to the Reforestation Fund;                                  
                -  Issuance or preparation of the transport document. 
                -  Issuance or preparation of the Supplier's Declaration of Conformity (SDoC), unless the operator is engaged into SVLK certification. 

Procedures:
                -  The private forest/land owner requests recognition of his or her property right; 
                -  Once the forest/land property right is recognised by the State (National Land Agency), the owner prepares a log-list after                                    measurement of the logs;                                  

In the case of logs harvested from trees present on a site before the granting of the land title:
                -  The owner submits a log-list and a request to settle the Forest Resources Fee, Reforestation Fund and stumpage fee payment                                    to the district forestry official;                                  
                -  The official conducts document checks and physical verification of the logs (dimensions, species identification, and number                                    of logs);                                  
                -  Subject to a positive outcome of the document checks and physical verification, the district forestry official issues a Forest                                    Resources Fee and Reforestation Fund Invoice for settlement by the owner;                                  
                -  The landowner submits the receipt for payment of the Forest Resources Fee and to the Reforestation Fund to the district forestry                                    official, together with a request for issuance of a Log Transport Document;                                  
                -  The district forestry official conducts document checks and physical verification of the logs (dimensions, species identification,                                    and number of logs);                                  
                -  Based on the above, the district forestry official issues the Log Transport Document. 

In the case of logs harvested from trees established after granting of the land title:
                -  Species listed in Article 5(1) of the Regulation:                    -  The owner marks the logs and identifies the species; 
                  -  The owner prepares a log-list; 
                  -  Based on the above, the owner prepares an invoice following the format provided by the Ministry of Forestry, which also serves                                          as the transport document. 
                -  Other species not listed in Article 5(1) of the Regulation:                    -  The owner marks the logs and identifies the species; 
                  -  The owner prepares a log-list; 
                  -  The owner submits the log-list and a request for issuance of a Log Transport Document to the head of village or appointed                                          official;                                        
                  -  The head of village or appointed official conducts document checks and physical verification of the logs (species identification,                                          number of logs, marks/number on each log, location of harvest);                                        
                  -  Based on the above, the head of village or appointed official issues the Log Transport Document following the format provided                                          by the Ministry of Forestry. 

For all timber harvested from planted trees, if not SVLK certified, the owner issues an SDoC using the format provided by                              the Ministry of Forestry.                           

Data reconciliation:
                -  The head of village or an official appointed by the district forestry official, or the district forestry official (in case                                    of timber from naturally grown trees) compares the volume of harvested logs with the log-list.                                  
                -  In case the operator engaged into SVLK certification, the CAB also checks the consistency between the volume of harvested                                    logs with the log-list during initial and surveillance audits. The CAB also organizes field inspections on an ad-hoc basis                                    when needed.                                  
                -  In case of any inconsistencies detected, the head of village or appointed official or the district forestry official (in case                                    of timber from naturally grown trees) informs the CAB in charge of verifying the operator's compliance and vice-versa.                                  

##### 3.DESCRIPTION OF THE OPERATIONAL CONTROL OF TIMBER SUPPLY CHAINS FOR DEPOTS AND INDUSTRYU.K.

Registered Timber and Processed-Timber Depots represent specific actors within the supply chain. Acting as traders, these                     operators buy, stock and sell timber and timber products to other operators without being involved in producing or processing                     activities.                  

There are three different types of permits for registered timber and processed-timber depots:
          -  Depots using exclusively timber (logs) originating from state forests and/or imports (TPT-KB); 
          -  Depots using exclusively timber and/or processed-timber originating from privately-owned forests/lands (TPT); 
          -  Depots using exclusively processed-timber originating from state forests and/or imports (TPT-KO). 

###### 3.1.**Registered Timber Depot for timber from State forests and Imported timber (TPT-KB)**U.K.

Registered Timber Depots for timber from State forests and imported timber (TPT-KB) are used if logs are not transported directly                     to the mill yard, from the concession area and/or intermediate log-yards and/or other TPT-KB or in the case of imported timber(logs).                  

The permit for the establishment of a TPT-KB is granted by the forestry official based on a proposal submitted by the permit                     holder. A TPT-KB permit is valid for three years, but can be extended following review and approval by the forestry official.                  

TPT-KB operators can use SDoC only if they use exclusively imported timber and/or SVLK certified Perum Perhutani timber. If                     only one of their timber sources contains timber from state forests (except the certified Perum Perhutani timber), they must                     be SVLK certified.                  

Main activities:
                -  Termination of the validity of the Log Transport Document for incoming logs by the Wasganis; 
                -  Preparation of the Log Balance-Sheet Report by the permit holder; 
                -  Preparation of the log-list by the permit holder or Ganis for outgoing logs; 
                -  The permit holder or Ganis completes the Log Transport Document for outgoing logs following the format provided by the Ministry                                    of Forestry;                                  
                -  Issuance or preparation of the SDoC (in case of only imported timber and/or certified Perum Perhutani timber being used and                                    operator not being SVLK certified)                                  

Procedures:
                -  The Wasganis terminates the validity of the Log Transport Document for the incoming logs. 
                -  The Wasganis physically verifies the number, species, and dimensions of incoming logs by counting of all of them (census)                                    or on a sample basis if the number of logs exceeds 100;                                  
                -  Subject to a positive outcome of the verification, the permit holder records the timber in the Log Balance-Sheet Report. 
                -  The permit holder prepares a Log Balance-Sheet Report as a means to control the inflow and outflow of logs at the registered                                    log depot;                                  
                -  For the outgoing logs, the permit holder or the Ganis prepares a log-list, which is linked to the previous Log Transport Documents; 
                -  The Log Transport Document for outgoing logs is completed by the permit holder or Ganis. 
                -  If not SVLK certified and using exclusively imported timber and/or certified Perum Perhutani timber, the permit holder issues                                    an SDoC using the format provided by the Ministry of Forestry.                                  
                -  The permit holder updates the Log Balance-Sheet Report, which records inflows, outflows and storage of logs at the registered                                    timber depots, based on the relevant Log Transport Documents;                                  
                -  The permit holder monthly submits the Log Balance-Sheet Report to the district forestry office. 

Data reconciliation:
                -  The district forestry official checks the Log Balance-Sheet Report and the consistency between the logs transported from the                                    log-yard or the intermediate log-yard and the logs entering into the registered timber depot by comparing the log transport                                    document and the log list of incoming logs. The district forestry official carries out field inspections when needed.                                  
                -  In case the permit holder engaged into SVLK certification, the Log Balance-Sheet report is also checked by the CAB during                                    initial and surveillance audits. The CAB also organizes field inspections on an ad-hoc basis when needed as described in the                                    TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the district forestry official informs the CAB in charge of verifying the operator's                                    compliance and vice-versa.                                  

###### 3.2.**Registered Timber and/or Processed-timber Depot for timber originating from Privately-owned forests/lands(TPT)**U.K.

Registered Timber and/or Processed-timber Depots for timber from Privately-owned forests/lands(TPTs) are used if logs and/or                     processed-timber are not transported directly to the mill yard, from privately-owned forests/lands and/or other TPT.                  

The permit for the establishment of a TPT is granted by the forestry official based on a proposal submitted by the permit                     holder. A TPT permit is reviewed and approved by the forestry official.                  

Operators running TPTs can use SDoC only if they are not engaged into SVLK certification.

Operators running TPTs must use exclusively timber and/or processed timber from planted trees of privately-owned forests/lands.

Main activities:
                -  Checking of the validity of the Log and/or Processed-timber Transport Document by the permit holder; 
                -  Preparation of the Log and/or Processed-timber Balance-Sheet Report by the permit holder; 
                -  Preparation of the log-list and/or processed-timber list by the permit holder; 
                -  The permit holder completes the Log and/or Processed-timber Transport Document. 
                -  Issuance or preparation of the SDoC (in case of the operator not engaged into SVLK certification) 

Procedures:
                -  The permit holder checks the validity of the Log and/or Processed-timber Transport Document for the incoming logs and/or processed-timber; 
                -  The permit holder prepares the Log and/or Processed-timber Balance-Sheet Report as a means to control the inflow and outflow                                    of logs and/or processed-timber;                                  
                -  For the outgoing logs, the permit holder prepares a log-list and/or processed-timber list, which may be linked to the previous                                    Log and/or Processed-timber Transport Documents;                                  
                -  The Log and/or Processed-timber Transport Document is completed by the permit holder; 
                -  If not engaged into SVLK certification, the permit holder issues an SDoC using the format provided by the Ministry of Forestry; 
                -  The permit holder updates the Log and/or Processed-timber Balance-Sheet Report, which records inflows, outflows and storage                                    of logs and/or processed-timber at the registered Depots, based on the relevant Log and/or Processed-timber Transport Documents;                                  
                -  The permit holder monthly submits the Log and/or Processed-timber Balance-Sheet Report to the district forestry office. 

Data reconciliation:
                -  The district forestry official checks the Log and/or Processed-timber Balance-Sheet Reports and the consistency between the                                    logs and/or processed-timber transported from the privately-owned forests or other TPTs and the logs and/or processed-timber                                    entering the TPT by comparing the Log and/or Processed-timber Transport Document and the log-list and/or processed-timber                                    list of incoming logs and/or processed-timber. The district forestry official carries out field inspections when needed.                                  
                -  If the permit holder is engaged into SVLK certification, the Log and/or Processed-timber Balance-Sheet Reports are also checked                                    by CABs during initial and surveillance audits. CABs also organize field inspections on an ad-hoc basis when needed as described                                    in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the district forestry official informs the CAB in charge of verifying the operator's                                    compliance and vice-versa.                                  

###### 3.3.**Primary/Integrated Industry**U.K.

Main activities:
                -  Preparation of Log Balance-Sheet Report by the processing mill; 
                -  Termination of the validity of Log Transport Document by a district forestry official; 
                -  Physical verification of logs by the district forestry official; 
                -  In case the operator uses an official online log tracking system, information is recorded by using a barcode reader and uploaded                                    to the system;                                  
                -  Preparation of Raw Material and Products Tally Sheet by the mill operator; 
                -  Preparation of Processed Timber Balance-Sheet Report by the mill operator; 
                -  The mill operator fills in the Timber Products Transport Document following the format provided by the Ministry of Forestry; 
                -  Preparation of sales report of the mill; 
                -  Issuance or preparation of the SDoC (in case of the operator uses exclusively timber originating from privately owned forests/lands                                    and not engaged into SVLK certification).                                  

Procedures:
                -  The mill operator prepares a draft Log Balance-Sheet Report as a means to record the flow of logs received by the mill (mill-yard)                                    and logs entering into the mill (production lines);                                  
                -  The mill operator submits copies of the Log Transport Documents corresponding to each batch of logs received by the mill to                                    the district forestry official;                                  
                -  The district forestry official terminates the validity of the Log Transport Documents; 
                -  In case the operator uses an official online log tracking system, the Log Transport Documents are terminated by the registered                                    technical staff.                                  
                -  The district forestry official verifies the information in the Log Transport Documents by comparing with the physical products.                                    This may be done on the basis of a sample if there are over 100 logs;                                  
                -  The district forestry official verifies the information contained into the Log Balance-Sheet Reports; 
                -  Subject to a positive outcome of the verification, the timber is recorded in the final Log Balance-Sheet Report; 
                -  The district forestry official archives copies of the Log Transport Documents and prepares a Summary List of the Log Transport                                    Documents, following the format provided by the Ministry of Forestry;                                  
                -  Copies of the Log Transport Documents of which validity has been terminated by an official are handed over to the company                                    for filing;                                  
                -  A summary of the Log Transport Documents is submitted to the district forestry office at the end of each month; 
                -  The mill operator prepares one raw material and product tally sheet by production line as a means to control the input of                                    logs and output of timber products and to calculate the recovery rate;                                  
                -  The mill operator prepares a Processed-Timber Balance-Sheet Report as a means to report on flows of timber products, entering                                    and getting out from the mill, as well as stocks;                                  
                -  The mill operator prepares sales reports of the mill for his records; 
                -  If using exclusively timber originating from privately owned-forests/lands and not engaged into SVLK certification, the permit                                    holder issues an SDoC using the format provided by the Ministry of Forestry;                                  
                -  The permit holder monthly submits the Log Balance-Sheet Report and the Processed-timber Balance-Sheet Report to the forestry                                    office.                                  

Data reconciliation:
                -  The forestry official checks the Log Balance-Sheet and Processed-timber Balance-Sheet Reports comparing inflows, outflows                                    and storage of logs based on Log Transport Documents.                                  
                -  The Production Tally Sheet is used to reconcile input and output volume of production lines and the recovery rate is compared                                    with the published average rate.                                  
                -  If the permit holder is engaged into SVLK certification, the Log Balance-Sheet and Processed-Timber Balance-Sheet Reports                                    are also checked by the CAB during initial and surveillance audits. The CAB also organizes field inspections on an ad-hoc                                    basis when needed as described in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the forestry official informs the CAB in charge of verifying the operator's compliance                                    and vice-versa.                                  

###### 3.4.**Registered Processed-Timber Depots for timber originating from State Forest and/or Imports (TPT-KO)**U.K.

Registered Processed-timber Depots for timber originating from State Forests and/or Imports (TPT-KOs) are processed-timber                     depots that receive processed-timber from primary processing units, and/or from other TPT-KOs, and/or imported processed-timber.                     Timber products from TPT-KOs are sold to secondary processing units, other TPT-KOs, household industries, registered exporters,                     and/or end users.                  

The permit for establishment of a TPT-KO is granted by the district forestry official based on a proposal submitted by the                     permit holder. A permit for TPT-KO is valid for three years, but can be extended following review and approval by the district                     forestry official.                  

TPT-KO operators can use SDoC only if they use exclusively timber products originating from imported processed-timber. If                     only one of their processed-timber products contains processed-timber originating from natural forests, they must be SVLK                     certified.                  

Main activities:
                -  Termination of the validity of the Timber Product Transport Document by the Ganis; 
                -  Preparation of Processed-Timber Balance-Sheet Report by the permit holder; 
                -  Preparation of processed timber list by the permit holder; 
                -  The permit holder completes the Timber Product Transport Document filling in the form/using the template following the format                                    provided by the Ministry of Forestry;                                  
                -  Issuance or preparation of the SDoC (in case of processed-timber exclusively from imported timber and operator not engaged                                    into SVLK certification).                                  

Procedures:
                -  The Ganis terminates the validity of the Timber Products Transport Documents for the incoming processed-timber. 
                -  The permit holder prepares a Processed-Timber Balance-Sheet Report as a means to control the inflow and outflow of processed-timber                                    at the Registered Processed-timber Depots;                                  
                -  For the outgoing processed-timber, the permit holder prepares a timber product-list, which is linked to the previous Timber                                    Products Transport Documents;                                  
                -  The permit holder completes the Timber Product Transport Documents 
                -  If not SVLK certified and using exclusively imported processed-timber, the permit holder issues an SDoC using the format provided                                    by the Ministry of Forestry.                                  
                -  The permit holder updates the Processed-Timber Balance-Sheet Report, which records inflows, outflows and storage of timber                                    products at the Registered Processed-timber Depots, based on the relevant Timber Products Transport Documents and import documents.                                  

Data reconciliation:
                -  The Ganis checks the Processed-Timber Balance-Sheet Report and the consistency between the incoming processed-timber and related                                    Timber Products Transport Documents and import documents.                                  
                -  The district forestry official carries out field inspections when needed. 
                -  In case the permit holder is engaged into SVLK certification, the Processed-Timber Balance-Sheet Report is also checked by                                    the CAB during initial and surveillance audits. The CAB organizes field inspections on an ad-hoc basis when needed as described                                    in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the district forestry official informs the CAB in charge of verifying the operator's                                    compliance and vice-versa.                                  

###### 3.5.**Secondary Industry**U.K.

Main activities:
                -  Preparation of Processed Timber (semi-processed products) and Processed Products Balance-Sheet Reports by the factory operator; 
                -  Preparation of invoices by the factory operator, using the format provided by the Ministry of Forestry which also serve as                                    transport documents for processed timber products;                                  
                -  Preparation of Processed Timber Balance-Sheet Report by the factory operator; 
                -  Preparation of Sales Report by the company or factory operator; 
                -  Issuance or preparation of the SDoC (in case of the operator uses exclusively timber originating from privately owned forests/lands                                    and not engaged into SVLK certification).                                  

Procedures:
                -  The factory operator archives the Processed Timber Transport Documents (for incoming material) and prepares a summary of these                                    documents;                                  
                -  The factory operator uses the Processed Timber and Processed Products Tally Sheet by production line as a means to report                                    on flows of materials into the factory and output of products and to calculate the raw material recovery rate;                                  
                -  The factory operator prepares a Processed Timber Balance-Sheet Report as a means to check flows of materials into the mill,                                    output of timber products and stocks held; the factory operator prepares invoices for processed products, following the format                                    provided by the Ministry of Forestry, which also serve as the transport document, and archives copies of the invoices. A timber                                    products list is annexed to each invoice;                                  
                -  The factory operator prepares Sales Reports for his record; 
                -  In case the factory operator wants to re-transport the sawn timber products, the company shall be registered also as a Processed-timber                                    Depots and the operator shall prepare the Processed Timber Transport Documents for the outgoing sawn timber products;                                  
                -  If using exclusively processed-timber originating from privately owned-forests/lands and not engaged into SVLK certification,                                    the non ETPIK permit holder issues an SDoC using the format provided by the Ministry of Forestry.                                  

Data reconciliation:
                -  The factory operator checks the Processed Timber Balance-Sheet Report comparing inflows, outflows and storage of materials                                    based on Processed Timber Transport Documents and Processed Timber Tally Sheet.                                  
                -  The Production Tally Sheet is used to check input and output volume of production lines and the recovery rate is evaluated. 
                -  The company operator checks the Processed Timber Balance-Sheet Report, comparing inflows, outflows and storage of products                                    based on invoices.                                  
                -  The forestry official carries out field inspections when needed. 
                -  In case the permit holder engaged into SVLK certification, the Processed Timber Balance-Sheet Report is also checked by the                                    CAB during initial and surveillance audits. The CAB organizes field inspections on an ad-hoc basis when needed as described                                    in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the forestry official informs the CAB in charge of verifying operator's compliance                                    and vice-versa.                                  

##### 4.EXPORTU.K.

The procedures and data reconciliation processes for export of timber originating from state-owned forests and privately-owned                     forest/lands are identical.                  

Main activities:
                -  The Ministry of Trade issues a Forestry Industry Products Registered Exporters Certificate (ETPIK) to the exporter; 
                -  The Exporter requests the issuance of a V-Legal Document/FLEGT licence for each export consignment; 
                -  If an ETPIK holder complies with legality and supply chain requirements, the LA issues a V-Legal Document/FLEGT licence. The                                    FLEGT licence is issued in the format presented in Annex IV;                                  
                -  The exporter prepares an Export Declaration Document (PEB) using the format provided by Customs, which is submitted to Customs; 
                -  The Customs issues an Export Approval Document for Customs clearance. 

Procedures:
                -  The exporter requests the LA to issue a V-Legal Document/FLEGT licence by submitting a letter of application and attaching                                    documents to demonstrate that the timber raw materials in the products originate only from verified legal sources (SVLK certified                                    or covered by an SDoC);                                  
                -  The LA issues a V-Legal Document/FLEGT licence after a document-based check and physical verification of data consistency                                    if needed, so as to ensure that the timber products come from legally verified sources and are thus produced in compliance                                    with the legality definition described in Annex II. The LAs need to issue the export license via the online database SILK.                                    This ensures that the operator holds valid export (ETPIK) and legality certificates;                                  
                -  The exporter submits an Export Declaration Document (PEB) to which are attached the invoice, Packing List, Export Duty Receipt                                    (if regulated), ETPIK Certificate, V-Legal Document/FLEGT licence, Export Permit (if regulated), Surveyor Report (if regulated),                                    and CITES Document (where applicable) to the Customs for approval;                                  
                -  Subject to a positive outcome of the verification of the Export Declaration Document, Customs issue an Export Approval Document. 

Data reconciliation
                -  The forestry official carries out field inspections when needed. 
                -  The CAB and the LA check the consistency of inflows, outflows and storage based on the Processed-timber Balance Sheet Report.                                    The CAB also cross-checks these data with the volume given in the invoice during initial and surveillance audits. The CAB                                    organizes field inspections and the LA organizes physical verification of data consistency on an ad-hoc basis when needed                                    as described in the TLAS Guidelines.                                  
                -  In case of any inconsistencies detected, the forestry official informs the CAB in charge of verifying operator's compliance                                    and vice-versa.”                                  

1

OJ L 150, 20.5.2014, p. 250.                           

2

See footnote 1.