CUSTOMS & FLEGT

Implementation guidance

Public summary

(2020/C 20/01)

Disclaimer This document is provided as a service to interested parties. It is non-binding guidance and does not represent the official view of the European Union, nor should it be taken as legal advice.

Contents

1. Introduction 2

2. Import of FLEGT timber – basic principles 2

3. Recommendations for cooperation between authorities 4

3.1. Technical assistance for officers and services in charge of verifications of shipments 5

3.2. Communication between Authorities during controls 6

3.3. CITES and FLEGT timber 6

3.4. Commercial and non-commercial goods 6

3.5. Controls under Simplified Customs Procedures 7

3.6. Handling licences in split shipments 7

3.7. Partner Country of export 8

3.8. Verification of FLEGT licences 8

3.9. Disposal of detained timber 8

Annex I – Glossary 9

Annex II – Legal framework 12

Annex III – Communication 14

1. Introduction

Illegal logging is a global problem with significant negative economic, environmental and social impact. Based on the Forest Law Enforcement Governance and Trade (FLEGT) Action Plan (1) the European Union (EU) has adopted subsequent FLEGT legislation (2) that establishes a FLEGT licensing scheme for imports of timber and timber products into the EU. This legal framework establishes a control system for certain timber products exported from countries that have concluded a Voluntary Partnership Agreement (VPA) with the EU. Timber products exported from those countries must be covered by a FLEGT licence issued at the Partner Country assuring the legality of the timber (i.e. produced from domestic timber that was legally harvested or from timber that was legally harvested in a third country and imported into the Partner Country in accordance with national laws in the partner country). In order to ensure the effectiveness of the FLEGT licensing scheme, Customs can not release for free circulation timber products subject to this scheme unless a FLEGT licence is presented and accepted by the Competent Authority in the Member State.

The main objective of the Guidelines is to support Customs and FLEGT Competent authorities in effectively carrying out their tasks in accordance with the FLEGT legislation2, setting out the FLEGT licensing scheme for imports of timber and timber products into the EU and the detailed measures for its implementation. In particular the Guidelines aim at providing a common approach towards harmonising the implementation by:

— Creating an appropriate, recommended and, where possible, comprehensive approach for Customs and FLEGT Competent Authorities on the implementation of the FLEGT legislation.

— Establishing recommendations for enhanced cooperation between Customs and Competent Authorities.

Consequently the document is structured as follows:

1. Introduction, where the document is presented;

2. Import of FLEGT timber and timber products – basic principles, where the import process is described;

3. Recommendation for cooperation between authorities, where national agreements are suggested, specific issues are analysed and examples are given;

4. Annexes I, II and III, where the terminology and legal provisions are included for reference.

These Guidelines have been drafted in due time before the first VPA became operational in order to give the necessary guidance for this new task for customs authorities from the outset. These guidelines are now updated on the basis of the practical experience gained with the implementation of the first FLEGT licensing scheme with Indonesia, which became operational on 15 November 2016.

The Guidelines may be reviewed on the basis of further practical experience following the operation of FLEGT licensing scheme by other Partner countries and any changes in the legal framework. The Guidelines have been drafted in cooperation with the Members States’ experts from Customs and competent authorities and should not be considered mandatory.

2. Import of FLEGT timber and timber products – basic principles

FLEGT is based on a comprehensive framework that includes the Voluntary Partnership Agreements (VPAs) between the EU and Partner Countries on forest law enforcement governance and trade in timber and timber products one one side and the FLEGT Legislation (FLEGT Regulation and FLEGT Implementing Regulation) on the other, that sets out the rules governing the imports into the EU of timber and timber products from Partner countries. In accordance with this framework, imports into the EU of timber products exported from Partner countries will be allowed only if covered by a FLEGT licence issued by the Licensing Authority in the Partner Country attesting their legality. Customs must verify that a shipment of timber and timber products from a Partner country is covered by a valid FLEGT licence when presented for release for free circulation. Following its release, FLEGT timber benefits from presumption of compliance with the EU Timber Regulation (3).

With regards to the product scope, there is a core list of products prescribed in Annex II of the FLEGT Regulation that applies to all VPAs and beyond that, each VPA has included additional products in its scope. Annex III of the FLEGT Regulation includes the Partner countries and their respective product scopes – currently only Indonesia –providing thus sufficient legal clarity on the FLEGT products from each Partner country for which Customs must verify the presence of a FLEGT license. Non-commercial goods, products covered by CITES (4) documents and timber transiting through a Partner Country, are exempted from the presentation of a FLEGT licence.

When bringing goods into the customs territory of the Union, the importer has to lodge a customs declaration and the declarant can choose between different customs procedures which are designed to address specific economic needs. According to the FLEGT legislation, importing is defined as the customs procedure ‘release for free circulation’ and this includes paying the customs duties, excise duties, if applicable, and VAT for the goods. The declarant also has to comply with specific restrictions that may apply to the goods declared, for example the requirement to present a FLEGT licence for timber or timber products. As soon as the duties are charged and evidence is given that all other conditions for the importation of the goods are fulfilled, Customs release the goods. The goods change their status from non-Union goods into Union goods and they can be placed on the internal market without prejudice to any other applicable legislation.

The declaration for release for free circulation does not necessarily have to be lodged at the customs office where the timber arrives in the EU. There are also procedures available that allow for the storage, processing or transport of goods under customs supervision. When goods are transported between Member States within the EU, the customs declaration for release for free circulation can be lodged with the customs authorities at the point of destination. The only customs procedure that requires the presentation of a FLEGT licence is the release for free circulation (5).

When FLEGT timber is declared for release for free circulation in a certain Member State, Customs must ensure that the FLEGT licence has been approved (6) by the Competent Authority in the same Member State. Otherwise Customs can not release the timber. National procedures may define how this is done in practice, whilst the FLEGT legislation provides for the following grounds:

— Customs can identify FLEGT Timber by the country of dispatch and the Harmonized System code up to 6 digits. This will be reflected in the Annexes I, II and III of the FLEGT Regulation, duly updated, and subsequently integrated in TARIC (7).

— Products included in Annexes A, B and C of the EU Wildlife Trade Regulation (8) (CITES (9)) are exempted from the FLEGT formalities at import. Other relevant exceptions are non-commercial goods and products that transited the Partner Country under customs supervision. VPAs may include an Annex IB listing products prohibited from being exported from the Partner Country, thus cannot be FLEGT licensed, and therefore may not be imported into the Union.

— The FLEGT licence has to be presented to the Competent Authority in the same Member State where the customs declaration for release for free circulation will be lodged. The FLEGT licence can be presented in advance but not later than the moment when the customs declaration is lodged. At a later stage, Competent Authorities shall be informed on the customs declaration that corresponds to each FLEGT licence.

— The Competent Authority verifies the FLEGT licence and informs Customs on its decision to approve it.

— For verification purposes, the European Commission will provide Customs and Competent Authorities with specimens and other details of the Licensing Authorities.

— Further verifications of the FLEGT licence and the shipment are possible; Customs and Competent Authorities should closely cooperate and agree on the tasks to be performed by each service.

— Competent Authorities may request additional information from the Licensing Authority following procedures described in each VPA.

— Given the nature of timber products, weight or volume at import may deviate up to 10 % from those declared in the FLEGT licence.

— Costs incurred while verification is completed shall be at the expense of the importer, except where the Member State determines otherwise.

— In Box 44 of the Single Administrative Document (SAD) on which the customs declaration for release for free circulation is made, reference shall be made to the FLEGT licence. The certificate code number C690 for FLEGT licences has to be selected and the number of the licence covering the shipment has to be declared.

— FLEGT licences can be paper based or electronic licences, and, when necessary, authorities can request a translation, with the costs borne by the importer. When FLEGT licences are paper based, the FLEGT implementing Regulation and the VPAs foresee a copy for Customs; this copy is conceived as an extra instrument to facilitate communication with or between authorities and needs to be presented to Customs.

— Customs can suspend the release for free circulation in case they suspect the FLEGT licence may not be valid. Then, the Competent Authority shall act in accordance with national legislation in force when provisions set in the FLEGT legislation are infringed (and the applicable provisions in the VPA, which may require prompt communication to the Partner Country).

— Records of FLEGT licences and related customs declarations received, and relevant data on non-compliant shipments, have to be kept in order to fulfil reporting obligations. The European Commission is obliged to provide a format for the annual reports.

— Competent Authorities shall grant the appointed independent auditor (10) access to relevant documents and data, within the limits of relevant national law, to cross check information from the Licensing Authority and to review EU verification procedures.

3. Recommendations for cooperation between authorities

In those cases where Competent Authorities are different from Customs, the cooperation and communication between authorities is a key element of the implementation process of border controls under the FLEGT legislation.

The legislation foresees different ways of cooperation: communication on approved FLEGT licences (11), delegation of functions to Customs (12), coordination of verifications procedures (13) or data exchange by electronic means (14), inter alia.

In order to ensure proper implementation and a common approach, it is recommended that cooperation between Customs and Competent Authorities, and when they are involved, other authorities with competencies in related fields, is based on formal national agreements.

For the establishment of national agreements and the development of operational procedures, the following steps should be ideally taken:

— Establishment of contacts between Customs and Competent Authorities (15) – at strategic, management and operational expert level.

— Finding of an appropriate approach and formal layout to ensure that agreements will be established in a proper way.

— Determination of the elements of the agreements (national terms of reference) on which further common cooperation between Customs and Competent Authorities will be based. These national terms of reference should be based on the recommendations in these Guidelines, and should take account of the specific provisions in the national legislations and/or administrative structure.

— Implementation of the agreements into practical operational procedures to be carried out during the control process.

It is recommended to include the following elements into national cooperation agreements:

— Enhanced cooperation including terms for an efficient and effective long-term cooperation: — regular meetings between Customs and Competent Authorities at appropriate strategic, management and operational level with agreed terms of reference; — early communication between Customs and Competent Authorities concerning upcoming policy and legislative proposals with impact on both authorities; — rapid response cooperation system for dealing with emerging situations, new types of infringements or high risk economic operators; — means for technical assistance for officers and services in charge of verifications.

— Distributions of tasks: agreed roles, tasks and responsibilities on controls to be undertaken by Customs and/or Competent Authorities, taking account of the national structures and local situations. Tasks that should be agreed upon are at least the following: — additional verifications of the FLEGT licence; — additional verifications of the shipment; — storing and gathering data for recording (16) and reporting (17) obligations.

— Communication between authorities: — list of contact points of both authorities — Customs and Competent Authority, including a revision clause to ensure regular updates; — means and procedures for communication between Customs and Competent Authorities related to the acceptance of the licence, the control process and the results of any further verifications; — terms for intelligence exchange related to the risk management, including bidirectional feedback and reliable intelligence network; — clear provisions on what information (including nominal data) can be exchanged between Customs and Competent Authorities and under which conditions;

— Implementation and enforcement: — joint development and distribution of operational procedures with clear instructions for officers, in particular for the control and verification activities; — common interpretation or implementation agreements for particular cases, such as FLEGT shipments that are also CITES, that are imported under simplified procedures, that have a country of origin different from the country of export, that are non-commercial goods, or that show inconsistencies with the licence (see further explanations below); — shared instructions and information to economic operators and declarants; — reciprocal training of responsible officers and common training sessions; — periodical exchange of import data in order to detect discrepancies; — enforcement projects or joint operations, with agreed terms of reference; — clear procedures for disposal of detained goods including the handling of costs arising from storage; — arrangements for handling paper licences and avoiding fraudulent reuse of a licence.

Further recommendations are given in the following pages for the elements in the text above.

3.1. Technical assistance for officers and services in charge of verifications of shipments

When Customs are tasked with the verification of the shipment it is recommended that the national agreement includes terms for the Competent Authorities to provide technical assistance at different levels:

— Training and guidance in technical aspects (e.g. measurements and identification of species)

— Technical input in the development of operational procedures for inspections (instructions, checklists, forms, correlation tables, etc.)

— Technical assistance on the spot during controls

— Laboratory services if available, or information on reliable services

— Providing contact details (names, email addresses, telephone numbers) for technical assistance from the Partner Country

It is advisable to include the exchange of information, training and resources between authorities in a Member State or in different Member States, making available expertise and laboratory services. It is recommended to involve Partner Countries in this process, providing knowledge of their own products, expertise and samples of wood for laboratory analysis.

3.2. Communication between Authorities during controls

It is necessary that the Member States arrange for adequate communication channels between Competent Authorities and Customs. Those arrangements must ensure that Customs know without delay that the FLEGT licence is approved (or not) by the Competent Authority, but also that other information related to the control process is exchanged. It is recommended that national authorities put in place communication tools and procedures according to their national structure, and that they foresee at least the following:

— as soon as reasonably possible after the FLEGT licence is approved by the Competent Authority the information must be available for Customs; a negative decision could also be made available to Customs, hence the communication system could include the cases where the Competent Authorities do not approve a FLEGT licence.

— this information can be accompanied by additional elements according to the distribution of tasks agreed at national level, such as the request to perform further verifications of the licence or the shipment, specific details that Customs should look at, or relevant information for the risk profile;

— during the customs controls, Customs may need to inform or consult the Competent Authority when they suspect that the FLEGT licence is not valid or does not correspond to the shipment;

— records on customs declarations related to FLEGT timber, and relevant data on non-compliant shipments, have to be shared in order to fulfil reporting obligations;

— communication channels should be robust and secured;

— when communication is based on paper licences, including the possible use of the paper copy for Customs, there should be clear procedures to avoid fraudulent re-use of FLEGT licences.

3.3. CITES and FLEGT timber

The FLEGT Regulation and the existing VPAs state that timber products subject to the EU Wildlife Trade Regulation (Annexes A, B and C – not Annex D) will not undergo the procedure described for the FLEGT licenced products at the EU border. Nevertheless, existing VPAs apply their FLEGT legality assurance system also to CITES species and therefore it could be the case that in practice some CITES timber shipments are accompanied by either a CITES import permit (annexes A and B) or a CITES import notification (annex C) and a FLEGT licence as well, as in the case of Indonesia.

It is recommended that for those cases where a FLEGT licence is declared for CITES timber, the relevant Competent Authorities are informed. Customs may also report irregularities (such as doubts about compliance with CITES Annotations for timber species, about the origin of the species from the wild/plantations, etc.) regarding CITES requirements in timber from Partner Countries to the Competent Authority, aiming at facilitating the review of the provisions on CITES as indicated in Article 4(3) of the FLEGT Regulation.

If the FLEGT licence is available for Customs or Competent Authorities, irregularities in the FLEGT licence should lead to further verifications pursuing CITES compliance.

3.4. Commercial and non-commercial goods

Timber products of non-commercial nature do not fall within the scope of the FLEGT Regulation (18) and are thus exempted from the obligation to be covered by a FLEGT license when imported into the EU. The distinction between commercial and non-commercial goods is gaining importance in a context of growing mobility of persons and goods at all levels. Travellers, professionals providing services, persons changing residence or consumers buying via distance commerce that entail direct supply via postal and courier services, are all examples of situations where customs may be confronted with timber products coming from Partner countries.

The FLEGT Regulation makes reference to the definition of non-commercial goods laid down in Commission Regulation (EEC) No 2454/93 (19). Accordingly, non-commercial goods in the FLEGT context are those timber products that fulfil the following conditions:

whose entry for release for free circulation is on an occasional basis

and

whose nature and quantity indicate that they are intended for private, personal or family use of the consignees or persons carrying them

or which are clearly intended as gifts.

It is recommended that Customs inform Competent Authorities in the Member State about criteria applied for assessing the commercial or non-commercial nature of timber products, and inform as well economic operators and other stakeholders in the limits of their means and competences.

As regards in particular packing materials, while they may be covered by VPAs under Combined Nomenclature heading 4415, when they are exclusively used to hold, protect or carry other goods, they do not fall within the scope of the FLEGT Regulation and should not be subject to FLEGT controls at import. This interpretation should be read together with the General rules for the interpretation of the combined nomenclature 5a and 5b (20).

3.5. Controls under Simplified Customs Procedures

Customs may grant an economic operator – who applies for it and who fulfils certain conditions and criteria – with an authorisation for Simplified Procedures. This economic operator can then benefit from simplified formalities relating to its customs declarations and clearance whenever he imports or exports into/from the EU. The use of Simplified Procedures for importing FLEGT timber should not compromise the effectiveness of the enforcement of the FLEGT legislation. The following recommendation should be taken into account in the authorisation for simplified procedures for timber operators:

— When Customs receive an application for a Simplified Procedure that may cover FLEGT timber the Competent Authority may provide its opinion before the authorisation is granted.

— The authorisation should foresee conditions assuring that FLEGT provisions are fully respected and that the necessary controls can be performed, by including clear terms on the following aspects: — Before FLEGT timber falling into the scope of the FLEGT Regulation can be released for free circulation a FLEGT licence must have been approved by the Competent Authority. — Customs must have the possibility to carry out checks before the timber is released. — The release of FLEGT timber before the Competent Authority approves the FLEGT licence represents an infraction of the FLEGT legislation. The case has to be reported to the Competent Authority and they shall act in accordance with national legislation. The authorisation for the Simplified Procedure should be reviewed in order to verify whether the conditions for maintaining the authorisation are still fulfilled.

— Existing authorisations should be reviewed and aligned to the above recommendations where applicable.

3.6. Handling licences in split shipments

According to the definition of ‘shipment (21)’ in the FLEGT Implementing Regulation, one single FLEGT licence can only be presented to one customs office in the EU and ideally, in order to facilitate clearance at Customs, to correspond to a single customs declaration.

In order to avoid timber products covered by a single FLEGT licence being split into more than one customs declaration or presented to more than one customs office in the EU, the issuance of the FLEGT licence should be linked to the quantity of timber products sent at the same time and presented for release for free circulation at the same time at a single customs office, as far as it is reasonable to foresee at the moment of issuance. It is recommended that Customs and Competent Authorities raise awareness on this issue among economic operators and other stakeholders in the limits of their means and competences.

In case a shipment covered by a single FLEGT licence is ‘split’, Customs should notify the Competent Authority of the inconsistency between the goods presented to Customs and the FLEGT licence. Customs should not release the goods unless the Competent Authority confirms that a valid FLEGT licence (possibly a corrected duplicate) is presented in relation with the declared goods. Close cooperation between authorities and clear procedures are required. In case the goods are declared in more than one Member State, the competent authorities of the MS where goods are declared should communicate with each other to verify, when the same FLEGT licence is presented, the authenticity and validity of the licence and ensure accuracy of volumes, species, etc.

3.7. Partner Country of export

Export is defined in the FLEGT legislation as the physical leaving of timber products from the territory of a Partner Country to bring them into de Union; therefore, the Partner Country of export is identified in the customs declaration as the country of dispatch (SAD Box 15). This may or may not be the same as the country of origin (SAD Box 16): for example, if the wood is harvested in Indonesia and processed in Indonesia, the country of origin is Indonesia; if the wood is imported in Indonesia from any country and processed in Indonesia but the manufacturing is not sufficient to confer Indonesian origin to the finished goods, then the country of origin will not be Indonesia.

Timber in transit is excluded from the scope of the FLEGT regulation and requirements of the VPA provisions. In this context, VPAs define timber products in transit as those originating in another third country transiting the Partner Country under customs supervision and leaving it in the same way whilst retaining its origin (22).

Although the exemption for timber products in transit through Partner Countries is not foreseen in the FLEGT Regulation, from the purpose and structure of the VPAs (23) it could be inferred that the transit cases defined above are exempted from the presentation of a FLEGT licence for the release for free circulation in the EU. Transit through the Partner Country must be proven to Customs with valid documentary evidence (24). It is recommended that Customs establish clear procedures for handling this exemption and raise awareness among economic operators and other stakeholders in the limits of their means and competences.

3.8. Verification of FLEGT licences

Veryfying the validity of a FLEGT licence is the responsibility of the Competent Authority. Customs may be assigned or delegated with verification tasks according to national agreements and procedures.

The validity of a licence is determined by three main aspects:

— authenticity: the licence was issued by the Licencing Authority in the Partner country;

— validity: the licence is lodged with the Competent Authority before it expires;

— accuracy: the licence corresponds to the shipment and other accompanying documents in terms of all the information provided therein e.g. volume, name, HS-heading etc. Customs may be required to support the verification process.

It is recommended that authorities establish clear procedures and criteria for verifying the correspondence between the FLEGT licence and the shipment, establishing which elements in the FLEGT licence are comparable to data in the customs declaration or in other relevant documents. It is also recommended to inform economic operators and other relevant stakeholders on these criteria to facilitate accomplishment.

3.9. Disposal of detained timber

According to the FLEGT legislation Customs may suspend the release of or detain timber products where they have reason to believe that the licence may not be valid. If Competent Authorities establish that this is the case, they shall act in accordance with national legislation in force.

In case of non-compliance authorities should follow applicable legislation and procedures, including the customs legislation (25) since the goods have a non-Union status. However, it is recommended that, for those aspects that are not described in detail by the applicable legislation or existing procedures, national agreements include clear provisions on the follow-up actions after an infringement, in particular regarding the disposal of the goods.

(1) Communication from the Commission to the Council and the European Parliament on an EU Forest Action Plan.

(2) Council Regulation (EC) No 2173/2005 (OJ L 347, 30.12.2005, p. 1) on the establishment of a FLEGT licensing scheme for imports of timber into the European Community, and Commission Regulation (EC) No 1024/2008 (OJ L 277, 18.10.2008, p. 23) laying down detailed measures for the implementation of Council Regulation (EC) No 2173/2005.

(3) European Parliament and Council Regulation (EU) No 995/2010 (OJ L 295, 12.11.2010, p. 23).

(4) Convention on International Trade in Endangered Species of Wild Fauna and Flora. It should be noted that in Indonesia, CITES-listed species are also subject to the Indonesian Timber Legality Assurance System (TLAS) and that a valid FLEGT licence is required for exporting such timber.

(5) Article 5 of Regulation (EC) No 2173/2005.

(6) The term used in the FLEGT legislation is ‘accept’; however, in this document it is replaced by ‘approve’ to better describe the role of Competent Authorities when verifying the FLEGT licences.

(7) The online integrated Community Tariff based on the Council Regulation (EEC) No 2658/87 (OJ L 256, 7.9.1987, p. 1).

(8) Council Regulation (EC) No 338/97 on the protection of species of wild fauna and flora by regulating trade therein (OJ L 61, 3.3.1997), amended by Commission Regulation (EU) 2017/160 of 20 January 2017 (OJ L 27, 1.2.2017, p. 1).

(9) Convention on International Trade in Endangered Species of Wild Fauna and Flora.

(10) Third party monitoring as per Article 5(3) of the FLEGT Regulation.

(11) Article 6(2) of the FLEGT Implementing Regulation — Commission Regulation (EC) No 1024/2008.

(12) Article 12 of the FLEGT Implementing Regulation — Commission Regulation (EC) No 1024/2008.

(13) Article 13 of the FLEGT Implementing Regulation — Commission Regulation (EC) No 1024/2008.

(14) Article 14(2) of the FLEGT Implementing Regulation — Commission Regulation (EC) No 1024/2008.

(15) List of Competent Authorities: ec.europa.eu/environment/forests/pdf/list_competent_authorities_flegt.pdf

(16) Article 5(1) of the FLEGT Regulation — Council Regulation (EC) No 2173/2005.

(17) Article 8(1) of the FLEGT Regulation — Council Regulation (EC) No 2173/2005.

(18) Article 2(9) of Council Regulation (EC) No 2173/2005.

(19) Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ L 253, 11.10.1993, p. 1).

(20) Council Regulation (EEC) No 2658/87 (OJ L 256, 7.9.1987, p. 1).

(21) Article 2.1 of Commission Regulation (EC) No 1024/2008 indicates that ‘shipment’ means a quantity of timber products set out in Annexes II and III to Regulation (EC) No 2173/2005 covered by a FLEGT licence which is sent from a partner country by a consignor or a shipper and which is presented for release for free circulation at a customs office.

(22) See for example Article 1(b) of the VPA with Cameroon.

(23) This applies to partner countries with an operational FLEGT licensing scheme.

(24) Please see article 43 of Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015 supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code (OJ L 343, 29.12.2015, p. 1).

(25) Please see articles 197-200 of Regulation (EU) No 952/2013 of the European Parliament and of the Council and articles 248-250 of the Commission Implementing Regulation (EU) 2015/2447