Proposal for a Council Regulation concerning the establishment of a voluntary FLEGT licensing scheme for imports of timber into the European Community {SEC(2004) 977}
Date: 2004-07-20
Institutions: European Commission
Subjects: action programme, forestry economics, forestry legislation, international cooperation, sustainable development, trading operation, wood product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.7.2004 
COM(2004) 515 final 

2004/0173 (ACC) 

Proposal for a 

COUNCIL REGULATION 

concerning the establishment of a voluntary FLEGT licensing scheme  
for imports of timber into the European Community 

(presented by the Commission) 

{SEC(2004) 977} 

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EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

In  May  2003  the  European  Commission  adopted  an  EU  Action  Plan  for  Forest  Law 
Enforcement,  Governance  and  Trade  (FLEGT)  (1).  Council  Conclusions  on  the  Action  Plan 
were adopted in mid-October (2).  

The  Action  Plan  sets  out  a  new  and  innovative  approach  to  tackling  illegal  logging,  which 
seeks to support developing countries’ efforts to strengthen governance with the incentives for 
good practice which can be provided by the EU internal market. The core components of the 
Action  Plan  are  support  for  improved  governance  in  wood-producing  countries,  and  a 
licensing scheme to ensure only legal timber enters the EU. 

The licensing scheme for timber imports will be implemented on a voluntary basis through a 
partnership  agreements  with  wood-producing  countries  and  regions  that  agree  to  co-operate 
with the EU on this matter.  

In  accordance  with  the  request  made  by  Council  in  its  Conclusions,  the  Commission  has 
undertaken the following steps with a view to meeting the mid-2004 reporting deadline: 

1. 

2. 

3. 

Prepare a draft Regulation for the FLEGT timber import licencing scheme; 

Along with Member States, enter into discussions with wood-producing countries to 
seek their views on partnership agreements; 

Arrange  analysis  of  further  legislative  options  which  could  be  used  to  support  the 
objectives of the action plan. 

This  proposal  sets  out  the  legislative  framework  to  introduce  such  a  licensing  scheme.  A 
rolling programme of consultations involving the Commission, interested Member States and 
potential  partner  countries  is  ongoing.  These  are  reported  in  detail  in  annex  to  the 
Recommendation for negotiating directives submitted along with this document. On the basis 
of these initial discussions, and other  political contacts, a recommendation for a mandate to 
negotiate  FLEGT  voluntary  partnership  agreements  is  presented  to  Council  along  with  this 
proposal.  

The Commission has initiated a scoping exercise to assess additional legislative options which 
could  be  used  to  support  the  objectives  of  the  FLEGT  Action  Plan,  and  will  report  back  to 
Council on this work later in 2004. 

2. 

EXTENDED IMPACT ASSESSMENT  

An  extended  impact  assessment  analysis  has  highlighted  the  economic,  social  and 
environmental  impacts  of  the  proposed  voluntary  licensing  scheme.  In  general  terms,  the 
strongest  impact  from  the  scheme  would  be  felt  in  Africa,  where  the  legal  supply  is 

1 
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COM(2003) 251. 
Council document 13439/03. 

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constrained in relation to demand from the EU. In Asia and Latin America, the EU market has 
more limited significance. 

Partner  countries  stand  to  capture  substantial  additional  revenues.  Expected  environmental 
benefits  include  reduced  pressure  on  forest  resources  and  protected  areas.  The  proposal  has 
more nuanced social impacts, with the loss of local jobs dependent on illegal logging offset by 
the  improved  practice  that  generally  accompanies  legal  enterprises.  There  is  a  clear  risk  of 
illegal  trade  being  directed  to  other  markets,  with  legal  production  exported  to  the  EU. 
Measures should be taken to mitigate this risk during implementation. 

Within the EU, impact of the proposal would be transmitted through potential changes to the 
price  and  supply  of  imported  timber.  The  internal  impact  is  expected  to  be  modest.  Timber 
prices  could  rise  as  illegal  timber  is  eliminated  from  supplies  to  the  EU,  but  the  impact  on 
markets  would  depend  on  the  price  elasticity  of  timber  products,  and  the  extent  to  which 
substitute products become attractive.  

The magnitude of impact depends on overall coverage achieved under the licensing scheme. 
Impact would be minimal if only some of the EU’s major exporters participate, but would rise 
if all major exporters take part.  

Impacts arising through implementing the scheme in tropical countries would be focused most 
strongly in six Member States which together account for 83% of imports of tropical timber 
products to the EU. Concerning timber from temperate countries, particularly Russia, impacts 
would be focused in the Nordic countries. Imports to the EU from Russia greatly exceed the 
volume  of  imports  from  tropical  countries,  and  this  would  need  to  be  accounted  for  in  the 
design of any voluntary licensing scheme in partnership with the latter. 

Provisions  for  monitoring  the  scheme  will  be  built  into  the  implementing  partnerships  with 
wood-producing countries, and are written into the draft Regulation. 

On this basis, the Commission proposes a timber import licensing scheme, to be implemented 
on a voluntary basis through partnerships with wood-producing countries. A detailed proposal 
in this regard is hereby presented. 

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2004/0173 (ACC) 

Proposal for a 

COUNCIL REGULATION 

concerning the establishment of a voluntary FLEGT licensing scheme  
for imports of timber into the European Community  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
133 thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The Council and Parliament welcomed the Communication on an EU Action Plan on 
for Forest Law Enforcement, Governance and Trade (FLEGT) as a first step to tackle 
the urgent issue of illegal logging and associated trade (3,4) 

The Communication on an EU Action Plan for Forest Law Enforcement, Governance 
and Trade  (FLEGT)(5) states the need  for a  voluntary FLEGT licensing scheme as a 
measure to ensure only legal timber enters the EU. 

Implementation  of  the  FLEGT  licensing  scheme  requires  that  imports  of  relevant 
timber  products  into  the  territory  of  the  Community  be  made  subject  to  a  system  of 
checks  and  controls  seeking  to  guarantee  the  legality  of  harvesting  and  export 
procedures. 

The  FLEGT  licensing  scheme  will  be  entered  into  through  voluntary  Partnership 
Agreement  between  the  EU  and  third  countries  and  regions.  Under  such  partnership 
agreements,  exports  of  timber  from  partner  countries  and  regions  to  the  EU  will  be 
accompanied by a unique export licence, to be granted if the timber has been harvested 
in  conformity  with  relevant  national  legislation.  Timber  originating  from  a  partner 
country  or  region  and  arriving  in  the  EU  at  a  point  designated  for  release  for  free 
circulation without such a licence will not be released. 

(5) 

The validity of licences for the relevant imported timber products should be properly 
verified  by  the  competent  authorities  of  the  Community,  and  be  subject  to  periodic 
independent audit and third-party monitoring to be agreed with partner countries. 

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OJ C 268, 07/11/2003 P. 0001-0002. 
Parliament document 7014/04. 
COM(2003) 251. 

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(6) 

(7) 

Each Member State should determine the sanctions applicable in the event of a breach 
of this Regulation. 

The measures necessary for the implementation of this Regulation are to be adopted in 
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the 
procedures for the exercise of implementing powers conferred on the Commission (6). 

HAS ADOPTED THIS REGULATION: 

CHAPTER I 

SUBJECT MATTER AND DEFINITIONS 

Article 1 

1. 

2. 

3. 

4. 

This  Regulation  establishes  a  Community  system  of  rules  for  the  import  of  certain 
timber  products  for  the  purposes  of  implementing  the  voluntary  FLEGT  licensing 
scheme,  as  set  out  in  the  Communication  on  an  EU  Action  Plan  for  Forest  Law 
Enforcement, Governance and Trade (FLEGT) (7). 

The  voluntary 
agreements with wood producing countries.  

licensing  scheme  shall  be 

implemented 

through  partnership 

Entering  into  a  partnership  agreement  will  imply  a  specific  and  binding  political 
commitment on the part of partner countries and regions to join the FLEGT licensing 
scheme within an agreed schedule stipulated in the said partnership agreement. 

Partnership  agreements  should  include  elements  of  institutional  support,  capacity 
building and technical assistance to facilitate implementation of the licensing scheme 
described herein, and additional actions to combat illegal logging and improve forest 
sector governance. Such elements will be designed to meet circumstances and needs 
in  partner  countries  and  regions  and  will  thus  be  described  within  the  specific 
partnership agreements. 

5. 

This  Regulation  does  not  prejudice  or  substitute  any  provisions  in  force  relating  to 
customs formalities and controls. 

For the purposes of this Regulation the following definitions shall apply: 

Article 2 

(a) 

‘Forest  Law  Enforcement,  Governance  and  Trade 
licensing  scheme’ 
(hereinafter ‘FLEGT licensing scheme’) means the licensing scheme for trade 
in timber negotiated with partner countries and regions; 

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7 

OJ L 184, 17.7.1999, p.23. 
COM(2003) 251 

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(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

(l) 

‘partner country or region’ means any state or regional organisation for which 
the FLEGT Licensing Scheme is effective; 

‘partnership agreement’ means the agreement through which partner countries 
or regions become committed to implementing the FLEGT licensing scheme; 

‘regional  organisation’  means  an  organisation  comprised  of  sovereign  states 
that  have  transferred  competence  to  that  organisation  in  respect  of  matters 
governed by the FLEGT licensing scheme; 

‘FLEGT  licence’  means  a  document  of  a  standard  format  which  is  to  be 
forgery-resistant and  tamper  proof,  verifiable, and which refers to a shipment 
of timber products as being in compliance with the requirements of the FLEGT 
licensing  scheme,  duly  issued  and  validated  by  a  partner  country  or  region’s 
competent authority; 

‘third-party monitoring’ means a system of independent monitoring or auditing 
which  provides  assurance  that  FLEGT  licences  are  issued  only  for  legally 
harvested timber products;  

‘competent  authority(ies)’  means  the  authority(ies)  designated  by  a  partner 
country or region to issue, validate or verify licences;  

‘timber products’ means the products set out in Annex II, to which the FLEGT 
licensing  scheme  applies,  and  which  are  imported  to  the  EU  for  commercial 
purposes; 

‘illegally  harvested  timber’  means  timber  products  harvested  in  violation  of 
relevant national laws in partner countries or regions; 

‘imports’ means the release for free circulation of products within the meaning 
of Article 79 of Council Regulation (EEC) No. 2913/1992; 

‘export’  means  the  physical  leaving  or  taking  out  from  any  part  of  the 
geographical territory of a partner country or region; 

‘country of origin’ means the country where the product originates, according 
to the Community provisions concerning non-preferential origin; 

(m) 

‘shipment’ means a specifically identifiable consignment of timber products, as 
set out in Annex II; 

CHAPTER II 

IMPORT REGIME 

Article 3 

1. 

This  FLEGT  import  regime  shall  apply  only  to  exports  from  partner  countries  or 
regions which agree to take part in it. 

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2. 

3. 

4. 

Partner countries and regions shall join the FLEGT licensing scheme by entering into 
partnership  agreement  with  the  Community.  An  agreed  schedule  for  implementing 
the  commitments  thereby  entered  into  shall  be  specified  in  the  partnership 
agreement. 

Partnership agreements shall reflect the needs and circumstances of partner countries, 
but  must  include  provisions  for  third-party  monitoring  to  ensure  transparency  and 
credibility of the FLEGT licensing scheme. 

The  Commission  will  present  recommendations  for  a  negotiating  mandate  for  such 
partnership agreements, on behalf of the Community, under the provisions set out in 
Article 300 of the EC Treaty. 

Article 3a 

The  import  of  timber  products  from  third  countries  shall  be  subject  to  the  presentation  of  a 
valid  certificate  of  origin  following  the  provisions  of  Articles  47  of  Commission  regulation 
no. 2454/1993 as last amended. 

1. 

2. 

3. 

1. 

2. 

Article 4 

The release for free circulation into the Community of timber products originating in 
partner  countries  and  regions  shall  be  prohibited  unless  the  consignment  of  timber 
products  is  accompanied  by  a  valid  FLEGT  licence  issued  by  the  competent 
authority of a partner country or region. 

Where  schemes  already  exist  to  verify  the  legality  of  timber  products  originating 
from partner countries or regions, such schemes  may  form  the  basis  of  the  FLEGT 
licence.  This  would  be  on  condition  that  those  schemes  have  been  assessed  and 
approved  to  agreed  requirements  in  accordance  with  the  procedure  laid  down  in 
Article  12(2),  so  as  to  provide  the  necessary  assurance  as  to  the  legal  origin  of  the 
timber products concerned. 

Timber products of species listed under Annexes A, B and C of Council Regulation 
(EC) No 338/97 of 9 December 1996 on the protection of species of wild fauna and 
flora  by  regulating  trade  therein  shall  be  exempt  from  this  requirement.  The 
Commission  shall  review  this  exemption,  in  accordance  with  the  procedure  laid 
down in Article 12(2), five years after the entry into force of this Regulation. 

Article 5 

The  FLEGT  licence  shall  be  presented  with  the  customs  declaration  for  release  for 
free  circulation  in  the  Community.  The  customs  authority  shall  keep  the  original 
FLEGT licence together with the customs declaration. 

The  customs  authority  shall  provide  the  Commission,  or  persons  or  bodies 
designated by the Commission, with access to the original licences, in the event that 
problems arise which impair the effective operation of the FLEGT licensing scheme.  

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3. 

4. 

5. 

1. 

2. 

The customs authority shall grant access to the original licences to persons or bodies 
designated  by  partner  countries  or  regions  as  responsible  for  the  independent 
monitoring of the FLEGT licensing scheme. 

The customs authority shall decide on the need for further verification of shipments 
using  a  risk-based  approach,  and  including  physical  inspection  of  shipments.  The 
Commission may seek to confirm that adequate verification and inspection is taking 
place, to support effective monitoring of the FLEGT licensing scheme. 

In case of doubt as to the validity of the licence, the customs authority will undertake 
additional verification and seek further clarification, as laid down in the Partnership 
Agreement with the exporting country or region. 

Article 6 

If a customs authority establishes that the conditions in Article 4 are not fulfilled, it 
shall  detain  and  impound  the  shipment,  and  proceed  in  accordance  with  national 
legislation in force. 

If a customs authority finds that the failure to present a FLEGT licence is not done 
knowingly  or  intentionally,  it  may  proceed  with  release  of  the  shipment  if  there  is 
sufficient evidence that a valid FLEGT licence exists. The valid FLEGT licence has 
to  be  presented  to  the  competent  customs  authority  within  the  delays  laid  down  in 
Article 256 of Commission Regulation No. 2454/1993. 

Article 7 

The Commission shall provide all customs authorities of the Member States with the names 
and  other  relevant  details  of  the  competent  authorities  designated  by  partner  countries  and 
regions,  authenticated  specimens  of  stamps  and  signatures  attesting  that  a  licence  has  been 
legally issued, and any other relevant information received in respect of licences. 

Article 8 

1. 

Member  States  shall  be  required  to  submit  a  yearly  report  by  April  of  each  year 
which includes the following details: 

(a) 

volumes  of  timber  products  entering  the  Community  under  the  FLEGT 
licensing  scheme,  as  per  HS  Headings  specified  in  Annex  II  and  per  each 
partner country or region. 

(b) 

the number of FLEGT licences submitted from each partner country or region, 
and the volumes and types of timber covered. 

The Commission may determine the format of this report in order to facilitate monitoring of 
the working of the FLEGT licensing scheme. 

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2. 

The Member States shall submit to the Commission by April of each year a report on 
seizures and the follow-up measures, including the following information: 

(a) 

the number of seizures and the volume and value of timber products seized. 

(b)  progress with legal proceedings instigated to enforce this Regulation. 

CHAPTER III 

GENERAL PROVISIONS 

Article 9 

The Commission and the partner countries and regions, following initial experiences gained 
from the implementation of this regulation, may review and modify the specifications of the 
licence with a view to improving its security, processing and functionality for the purposes of 
the FLEGT licensing scheme. 

Article 10 

1. 

2. 

The Commission, with the agreement of the Council, may add to and amend the list 
of partner countries and regions, and the competent authorities designated by partner 
countries and regions to issue and validate their licences, as set out in Annex I. To 
include additional partner countries and regions under Annex I, the Commission will 
submit  to  the  Council  recommendations  for  a  negotiating  mandate  under  the 
provisions set out in Article 300 of the EC Treaty. 

The  Commission,  with  the  agreement  of  the  Council  and  partner  countries  and 
regions,  may  add  to  and  amend  the  list  of  products  to  which  the  FLEGT  licensing 
scheme applies, as set out in Annex II. 

Article 11 

The Commission shall aim to ensure optimal implementation of the FLEGT licensing scheme, 
in  particular  through  co-operation  with  partner  countries  and  regions.  To  this  end,  the 
Commission shall, in particular, exchange information with partner countries and regions on 
trade in timber products and, where appropriate, and co-operate in monitoring activities. 

Article 12 

1. 

In  the  performance  of  its  duties,  the  Commission  shall  be  assisted  by  a  Committee 
(hereinafter referred to as ‘the Committee’). A suitable Committee for this purpose 
shall be identified within the established comitology.  

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2. 

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision 
1999/468/EC shall apply. 

The  period  laid  down  in  Article  4(3)  of  Decision  1999/486/EC  shall  be  set  at  ten 
working days. 

3. 

The Committee shall establish its rules of procedure. 

Article 13 

The Committee referred to in Article 12 may examine any question concerning the application 
of  this  Regulation.  Such  questions  may  be  raised  either  by  the  Chairman  or  by  a 
representative of a Member State. 

1. 

2. 

3. 

1. 

2. 

3. 

Article 14 

Any  natural  or  legal  person  providing  services  directly  or  indirectly  related  to  the 
activities  covered  by  Article  4  shall  exercise  due  diligence  for  establishing  that  the 
activities  for  which  it  provides  services  comply  with  the  provisions  of  this 
Regulation. 

The  participation,  knowingly  and  intentionally,  in  activities,  the  object  or  effect  of 
which is, directly or indirectly, to circumvent the provisions of this Regulation shall 
be prohibited. 

The Commission shall be notified of any information suggesting that the provisions 
of this Regulation are being, or have been, circumvented. 

Article 15 

Information  supplied  in  accordance  with  this  Regulation  shall  be  used  only  for  the 
purposes for which it was provided.  

Documents  held  by  the  Commission  containing  information  regarding  the  FLEGT 
licensing  scheme  shall  in  general  be  accessible  to  the  public.  However  certain 
documents,  such  as  those  containing  information  of  a  commercial  nature  or 
concerning  the  privacy  and  integrity  of  individuals,  may  be  exempt  from  this 
requirement, or where relevant require the prior agreement of the third party source 
of  information  before  being  disclosed,  in  accordance  with  Article  4  of  Regulation 
1049/2001/EC  Regarding  Public  Access  to  European  Parliament,  Council  and 
Commission Documents and with Article 287 of the treaty establishing the European 
Community.  

Communication  of  such  information  shall  however  be  permitted  where  the 
Commission is obliged or authorised to do so, in particular in connection with legal 
proceedings.  Such  communication  must 
into  account  and  make  due 
arrangements  for  the  legitimate  interests  of  the  person  concerned  that  his  or  her 
confidentiality not be abused and in particular that information such as their identity 
and business secrets should not be divulged. 

take 

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4. 

5. 

This  Article  shall  not  preclude  the  disclosure  of  general  information  by  the 
Commission. Such disclosure shall not be permitted if this is incompatible with the 
original purpose of such information.  

In the event of a breach of confidentiality, the originator of the information shall be 
entitled to ensure that it be deleted, disregarded or rectified, as the case may be. 

Article 16 

Compliance  with  this  Regulation  does  not  discharge  any  natural  or  legal  person  from 
compliance,  fully  or  partially,  with  any  other  obligation  under  Community  or  national 
legislation. 

Article 17 

1. 

2. 

Each Member State shall determine the sanctions to be imposed where the provisions 
of this Regulation are infringed. Such sanctions shall be effective, proportionate and 
dissuasive and shall be capable of preventing those responsible for the infringement 
from  obtaining  any  economic  benefit  from  their  action.  Member  States  shall  also 
determine  how  to  deal  with  timber  products  seized  when  the  provisions  of  this 
Regulation are infringed.  

Pending the adoption, where necessary, of any legislation to this end, the sanctions to 
be  imposed  where  the  provisions  of  this  Regulation  are  infringed  shall,  where 
relevant, be those determined by the Member States in order to give effect to Article 
5 of Regulation (EC) No 303/2002. 

Article 18 

This Regulation shall apply: 

(a)  within the Community territory. 

(b) 

to  any  national  of  a  Member  State,  and  to  any  legal  person,  entity,  or  body 
which is incorporated or constituted under Community law or under the law of 
a Member State. 

Article 19 

1. 

2. 

This  Regulation  shall  enter  into  force  on  the  day  of  its  publication  in  the  Official 
Journal of the European Communities.  

This Regulation shall be binding in its entirety and directly applicable in all Member 
States.  

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Done at Brussels, […]. 

For the Council 
The President 
[…] 

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ANNEX I 

List of partner countries and regions in the FLEGT licensing scheme and their duly 
appointed competent authorities, as referred to in articles 2, 4, 7 and 10 

_____ 

ANNEX II 

Products to which the FLEGT licensing scheme applies 

HS – Heading 

Description 

4403 

4406 

4407 

4408 

Wood  in  the  rough,  whether  or  not  stripped  of  bark  or  sapwood,  or 
roughly squared. 

Railway or tramway sleepers (cross-ties) of wood. 

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

Sheets  for  veneering  (including  those  obtained  by  slicing  laminated 
wood), for plywood or for other similar laminated wood and other wood, 
sawn lengthwise, sliced or peeled, whether or not planed, sanded, spliced 
or end-jointed, of a thickness not exceeding 6 mm. 

4412 

Plywood, veneered panels and similar laminated wood. 

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