COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE FITNESS CHECK on Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market (the EU Timber Regulation) and on Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community (FLEGT Regulation) Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010
Date: 2021-11-17
Institutions: Directorate-General for Environment, European Commission
Subjects: cattle, commodities market, deforestation, export (EU), market approval, reduction of gas emissions, soya bean, tropical plant, vegetable oil, wood product

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   EUROPEAN COMMISSION  Brussels, 17.11.2021  SWD(2021) 329 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE FITNESS CHECK  on Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market (the EU Timber Regulation)      and on       Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community (FLEGT Regulation) Accompanying the document Proposal for a  REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 {COM(2021) 706 final} - {SEC(2021) 395 final} - {SEC(2021) 396 final} - {SWD(2021) 325 final} - {SWD(2021) 326 final} - {SWD(2021) 327 final} - {SWD(2021) 328 final}  
 
 
COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE FITNESS CHECK 

on Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 
October 2010 laying down the obligations of operators who place timber and timber 
products on the market (the EU Timber Regulation) 

and on 

Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT 
licensing scheme for imports of timber into the European Community (FLEGT 
Regulation) 

The Fitness Check of the EU Timber Regulation (EUTR) and the Forest Law Enforcement, 
Governance and Trade (FLEGT) Regulation evaluates their implementation and functioning. 
It assesses whether these two instruments are fit for their purpose to halt illegal logging and 
related trade as set out in both Regulations. The EUTR focuses on preventing the placing of 
illegally harvested timber and timber products on the EU market  and the FLEGT regulation 
focus on preventing illegally harvested timber from being exported to the EU from producer 
countries. The main findings are that the general objectives of the two Regulations have not 
yet been fully met. A system based on due diligence (DD), such as the EUTR, could be better 
fit  for  purpose  if  improved  and  adapted  to  the  new  political  context  Regarding  the  FLEGT 
Regulation,  the  main  instrument  for  its  operationalisation,  i.e.  the  Voluntary  Partnership 
Agreements (VPAs), has not delivered. 

With regard to effectiveness, the EUTR is seen as an important tool to tackle illegal logging 
and associated trade. However, a number of challenges concerning the functioning of the DD 
scheme and the EUTR’s implementation have held back progress towards this objective. DD 
is used to ensure negligible risk of illegally harvested timber and wood products being placed 
on the EU market. While the EUTR has achieved some success, its application it has varied 
across the EU and there has been no significant effect on the volume of timber import from 
known  high-risk  sources.  Especially  smaller  operators  face  a  number  of  challenges  in 
establishing  DD  systems,  partly  due  to  limited  awareness  and  understanding  of  the 
obligations.  The  most  critical  issues  for  operators  is  the  ability  to  validate  information 
obtained  from  their  supply  chains  and  the  level  of  governance  in  exporting  countries.  This 
may undermine the reliability of documents supposed to demonstrate the legality of products, 
and  ultimately  the  robustness  of  the  systems.  The  concept  of  ‘negligible  risk’  is  subjective. 
This impedes the EUTR’s implementation and enforcement, because it affects the gathering 
and  interpretation  of  information  needed  to  prove  that  a  risk  is  ‘negligible’  for  operators, 
Competent Authorities (CAs) and the courts. Difficulty in challenging inadequate DD in court 
has  led  to  CAs  hesitating  to  file  lawsuits.  In  addition,  while  all  Member  States  have 
established legislative frameworks to implement the EUTR, there are differences in the level 
to which the national legislation allows an effective enforcement. Operators see variations in 
the  stringency  of  enforcement  (e.g.  number  of  checks,  level  of  penalties)  and  attempt  to 
import and place on the market risk products via specific EU MS. The trade data also presents 
a mixed picture: intra-EU trade and trade with countries deemed ‘lower risk’ showed weaker 
growth  over  the  period  of  implementation  relative  to  imports  as  a  whole  but  difference-in-
difference analysis of trade data (which uses two different control groups) concluded that the 
EUTR may have led to a reduction in imports of illegally harvested timber imports to the EU 

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of between 12-29%. The EUTR appears less successful in halting illegal logging globally than 
keeping  illegally  harvested  timber  and  wood-based  products  out  of  the  EU  market.  Exports 
from  countries  with  known  issues  of  illegal  logging  (e.g.  Ukraine,  Myanmar  and  Belarus) 
continued  and  actually  grew  over  the  last  years,  although  the  EUTR  has  led  to  significant 
improvements in raising awareness and transparency of information in the supply chains.  

For  the  FLEGT  Regulation,  a  number  of  critical  challenges  have  been  identified,  in 
particular with regard to Voluntary Partnership Agreements (VPAs). While VPAs have led to 
enhanced  stakeholders’  participation  and  positive  results  in  terms  of  improvement  of  forest 
governance in some countries, negotiations proved lengthy, progress in their implementation 
has been very slow and there is no clear evidence of their impact in terms of stopping illegal 
timber from being placed on the EU market, and/or reducing illegal logging globally. While 
the  FLEGT  licencing  system  implemented  by  Indonesia  and  the  EU  appears  to  broadly  be 
working  as  intended,  the  limited  number  of  countries  involved  in  VPA  processes  and  the 
limited trade volume covered have curtailed the ability of the FLEGT Regulation to achieve 
its objectives. After more than 15 years, only one country out of 15 has an operating licensing 
system  in  place  (Indonesia).  In  2018,  the  timber  products  covered  by  FLEGT  licences 
amounted to only 3% of EU timber imports and those from all 15 VPA countries combined 
represented  only  9%.  Many  important  countries  exporting  to  the  EU,  although  not  deemed 
low-risk, have never shown interest in engaging in the VPA process.  

The  evaluation  of  efficiency  has  compared  the  inputs  used  for  implementation  and 
compliance  with  the  Regulations  with  the  outputs  produced.  There  is  however  limited 
quantitative information available to underpin any assessment of efficiency. 

The EUTR places compliance costs on a range of different actors. The most important costs 
are associated with the implementation of DD system by EU operators. Regarding the FLEGT 
Regulation, costs generated by VPA processes have been comparatively high both for the EU 
and for VPA countries, given that only a small fraction of trade is actually covered by FLEGT 
licences. At the same time, additional costs might be indirectly transferred to EU operators via 
increased  prices  of  FLEGT  licensed  timber  products.  In  addition,  CAs  have  argued  that 
sometimes  it  is  more  difficult  to  get  the  information  necessary  to  exercise  DD  from  VPA 
countries without an operational FLEGT licensing system than from non-VPA countries. The 
burden of compliance under the EUTR is expected to be proportionately higher for EU SMEs 
due  to  their  low  scale  economies.  Compliance  costs  vary  significantly  across  operators 
depending  on  a  range  of  factors  (e.g.  number  of  suppliers,  supply  chain  complexity,  highly 
processed  or  low  processed  products  and  location  of  suppliers),  including  volume  of  trade. 
Given  the  small  number  of  operators  importing  FLEGT  licensed  timber,  CAs  commit  more 
resources to implement the EUTR than the FLEGT Regulation. Therefore, proportionally, the 
resources  invested  in  FLEGT  Regulation  are  much  higher.  Resources  invested  by  CAs  in 
implementation of the EUTR seem to vary greatly across MS. This can be partly explained by 
the  different  sizes  of  the  respective  domestic  timber  sectors,  the  trade  structure  and  the 
number of operators in the MS. 

The  EUTR  is  internally  coherent.  The  transposition  of  the  DD  requirements  into  national 
legislation  has  been  challenging  for  some  MS,  and  this  has  created  difficulties  for  CAs  to 
successfully pursue cases in courts. A compounding factor is that the EUTR does not have a 
mechanism  to  prohibit  trade  from  particular  high-risk  sources,  species  or  supply  chains. 
Current tools providing useful information (e.g. EUTR country overviews) might not hold up 
in court, as they are only guidance documents and are not referred to in the Regulation. The 
FLEGT  Regulation  has  a  narrower  product  scope  than  the  EUTR  and  varies  across  VPAs 
depending  on  negotiations.    In  case  more  countries  reach  the  state  of  operational  licensing 
systems,  this  may  create  additional  complexity  and  challenges  for  CAs,  EU  customs  and 

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importers  around  the  requirements  applying  to  different  products  and  from  different  source 
countries.  Both  Regulations  appear  broadly  coherent  with  wider  EU  policy,  although 
increased  ambition  through  the  European  Green  Deal  and  the  new  focus  on  sustainability 
would  call  for  a  move  away  from  mere  legality.  Both  also  seem  broadly  coherent  with 
international action. The EUTR supports the objectives of the CITES but differs in scope and 
methodology for determining timber legality. 

As  regards  relevance,  the  issue  of  illegal  logging  and  related  trade  remains  an  important 
challenge,  even  though  it  is  no  longer  the  dominant  driver  of  deforestation  and  forest 
degradation. The policy  mechanism underpinning the EUTR  allows flexibility to respond to 
new  and  emerging  challenges  linked  to  changes  in  trade  patterns  and  country  risk  profiles. 
The EUTR product scope may be changed if  needed by a delegated act, while adjusting the 
product  scope  for  VPAs  (or  any  other  change)  needs  to  be  negotiated  with  each  individual 
partner  country.  Both  Regulations  focus  only  on  legality:  especially  in  countries  with  high 
corruption, this may lead to applicable rules and their implementation to be subject to political 
and  policy  changes.  This  creates  difficulties  for  operators  to  understand  and  prove  what  is 
legally harvested/produced. Furthermore, the EU policy objectives have now moved towards 
avoiding  deforestation  and  forest  degradation,  which  is  not  necessarily  ensured  by  national 
legislative frameworks. 

EU value added has been provided by both Regulations compared to MS action alone. The 
EUTR  has  created  a  level  playing  field  for  operators,  even  though  divergences  at  national 
level in resources devoted to inspections and enforcement have jeopardised the ability of the 
EUTR to realise its full potential of keeping illegal timber and derived products out of the EU 
market. The value added by the FLEGT Regulation has been affected by the limited number 
of  countries  having  engaged  in  VPA  processes  and  reaching  the  stage  of  issuing  FLEGT 
licences. In addition, the preparatory, negotiation and implementation processes are complex 
and  resource  intensive.  The  implementation  is  often  marked  by  a  lack  of  political  will  in 
partner  countries  to  invest  in  implementation  as  well  as  by  the  absence  of  a  robust 
administration. The prevalence of corruption in many countries remains an issue. 

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