COMMISSION STAFF WORKING DOCUMENT 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

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.11.2021  SWD(2021) 328 final  COMMISSION STAFF WORKING DOCUMENT  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) 329 final}  
 
 
COMMISSION STAFF WORKING DOCUMENT 

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) 

1 

 
 
 
 
 
 
 
 
Table of Contents 

1. 
INTRODUCTION ............................................................................................................................... 4 
1.1  Purpose of the fitness check .................................................................................................................. 4 
1.2  Scope of the fitness check ..................................................................................................................... 4 

BACKGROUND TO THE INITIATIVE ......................................................................................... 6 
2. 
2.1  Description of the initiative and its objectives ...................................................................................... 6 
2.1.1  EU Timber Regulation (EUTR) .......................................................................................................... 6 
2.1.2  The Forest Law Enforcement, Governance and Trade (FLEGT) Regulation ..................................... 7 
2.1.3 
Intervention Logic............................................................................................................................... 9 
2.2  Baseline ................................................................................................................................................. 9 
Introduction ......................................................................................................................................... 9 
2.2.1 
2.2.2  Overview of the situation prior to adoption .......................................................................................10 

3. 
IMPLEMENTATION AND STATE OF PLAY ..............................................................................12 
3.1  EUTR ...................................................................................................................................................12 
3.1.1  Designation of Competent Authorities ..............................................................................................12 
3.1.2  Checks on operators, traders and substantiated concerns ..................................................................13 
3.1.3  Penalties and infringement cases .......................................................................................................14 
3.2  FLEGT Regulation ...............................................................................................................................15 
3.2.1  Designation of Competent Authorities ..............................................................................................16 
3.2.2  FLEGT Licences and shipments received .........................................................................................16 
3.2.3  Penalties and infringement cases .......................................................................................................17 

4.  METHODOLOGY .............................................................................................................................18 
4.1  Evaluation questions ............................................................................................................................18 
4.1.1  Effectiveness ......................................................................................................................................18 
4.1.2  Efficiency ...........................................................................................................................................18 
4.1.3  Coherence ..........................................................................................................................................18 
4.1.4  Relevance ...........................................................................................................................................19 
4.1.5  EU Added Value ................................................................................................................................19 
4.2  Process .................................................................................................................................................19 
4.3  Challenges and the robustness of findings ...........................................................................................20 

5.  ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS .......................................20 
5.1  Effectiveness ........................................................................................................................................20 
5.2  Efficiency .............................................................................................................................................29 
5.3  Coherence ............................................................................................................................................35 
5.4  Relevance .............................................................................................................................................37 
5.5  EU Added Value ..................................................................................................................................38 

6.  CONCLUSIONS ................................................................................................................................38 
6.1  Findings................................................................................................................................................38 
6.2  Lessons learnt .......................................................................................................................................44 

ANNEX 1: PROCEDURAL INFORMATION .........................................................................................47 

2 

 
 
 
 
 
 
 
ABBREVIATIONS/GLOSSARY 

Term or acronym 

Meaning or definition 

BCM 

CA 

CBD 

CITES 

CoC 

DD 

DDS 

EC 

EUTR 

FLEGT 

FLEGT AP 

FTE 

IA 

JIC 

LIU 

MS 

MO 

OPC 

SME 

SVLK 

TLAS 

UNFCCC 

VPA 

Bilateral Coordination Mechanism  

Competent Authority 

Convention on Biological Diversity 

Convention  on  International  Trade  in  Endangered 
Species of Wild Fauna and Flora 

Chain of Custody  

Due Diligence 

Due Diligence System 

European Commission 

EU Timber Regulation 

Forest Law Enforcement Governance and Trade 

The  EU  Forest  Law  Enforcement,    Governance  and 
Trade Action Plan 

Full-Time Equivalent 

Impact assessment 

Joint Implementation Committee 

Licence Information Unit 

Member State(s) 

Monitoring Organisation 

Online Public Consultation 

Small and Medium-sized Enterprises  

Sistem Verificasi Legalitas Kayu - Indonesia’s national 
Timber Legality Assurance System 

Timber Legality Assurance System 

United  Nations  Framework  Convention  on  Climate 
Change 

Voluntary Partnership Agreement 

3 

 
 
1. 

1. 

INTRODUCTION 

1.1 

1.1  Purpose of the fitness check 

The  Fitness  Check  of  the  EU  Timber  Regulation  (EUTR)1  and  the  Forest  Law  Enforcement, 
Governance  and  Trade  (FLEGT)  Regulation2  evaluates  their  functioning  and  effectiveness  and 
helps to assess whether the instruments are still fit for their purpose of halting illegal logging and 
related trade and preventing illegally harvested timber and wood based products to be placed on 
the  EU  market  by  fulfilling  obligations  set  out  in  both  Regulations.  Since  the  Regulations  are 
complementary  to  each  other  by  addressing  respectively  the  supply  (FLEGT  Regulation)  and 
demand (EUTR) sides of timber harvest and trade, and are key legal instruments of the FLEGT 
Action Plan (AP), their evaluation has been combined into a single Fitness Check. 

1.2 

1.2  Scope of the fitness check 

The Fitness Check responds to the following obligations set out in:  

  Article 9 of the FLEGT Regulation which provides that by December 2021 and every five 
years  thereafter,  the  Commission  shall,  on  the  basis  of  information,  in  particular  the 
information  referred  to  in  Article  8(1),  and  experience  with  the  application  of  this 
Regulation,  review  the  functioning  and  effectiveness  of  this  Regulation.  In  doing  so,  it 
shall  take  into  account  the  progress  on  implementation  of  the  voluntary  Partnership 
Agreements  (VPA);  the  reports  may  accompanied,  where  appropriate,  by  proposals  for 
improvement of the FLEGT licensing scheme. 

  Article 20(3) of the EUTR which provides that by 3 December 2015 and every six years 
thereafter,  the  Commission  shall,  on  the  basis  of  reporting  on  and  experience  with  the 
application of this Regulation, review the functioning and effectiveness of this Regulation, 
including  in  preventing  illegally  harvested  timber  or  timber  products  derived  from  such 
timber  being  placed  on  the  market.  It  shall  in  particular  consider  the  administrative 
consequences  for  small  and  medium-sized  enterprises  and  product  coverage.  The  reports 
may be accompanied, if necessary, by appropriate legislative proposals. 

In line with the  above requirements and in compliance with the  Commission Better  Regulation 
Guidelines  and  Toolbox3,  the  Fitness  Check  assesses  the  effectiveness,  efficiency,  coherence, 
relevance  and  EU  added  value  of  both  Regulations  in  contributing  to  the  fight  against  illegal 
logging and related trade globally and internally in the EU.  

The scope of the Fitness Check is described in Table 1-2.  

Table 1-1 Scope of the Fitness Check 

Description  

Legislative coverage 

 

FLEGT: Council Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT 

Regulation licensing scheme for imports of timber into the European Community;4 and the Commission 

Regulation (EC) No 1024/2008 of 17 October 20085; 

1 Regulation (EU) No 995/2010 of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market 
(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32010R0995). 
2 Council Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a Forest Law Enforcement, Governance and Trade (FLEGT) 
licensing scheme for imports of timber into the European Community (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32005R2173) 
3 https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-Regulation-why-and-how/better-Regulation-guidelines-and-
toolbox_en.  
4 Council Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT Regulation licensing scheme for imports of timber into 
the European Community. 

4 

 
 
 
 
                                                      
Description  

 

EUTR: 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 (EUTR)6; 

  Commission Delegated Regulation (EU) No 363/2012 of 23 February 20127; 

  Commission Implementing Regulation (EU) No 607/2012 of 6 July 20128; and  

  Regulation (EU) 2019/1010 of the European Parliament and of the Council of 5 June 2019 on the alignment 

of reporting obligations9. 

Geographical coverage 

 

 

EUTR: Covering illegal logging globally.  

FLEGT Regulation: VPA countries; FLEGT licencing: Indonesia (since 15 November 2016); Ratified VPAs: 

Cameroon, the Central African Republic, Ghana, Indonesia, Liberia, the Republic of the Congo and Vietnam; 

Negotiations concluded and VPAs initialled: Honduras and Guyana; Negotiations ongoing: Côte d'Ivoire, the 

Democratic Republic of the Congo, Gabon, Laos, Thailand, and Malaysia. 

o  And non-VPA countries to capture reasons for non-engagement and relative performance of EUTR 

associated with imports from VPA and non-VPA countries.  

Sectoral coverage 

 

EUTR:  

o  Product scope: Timber and timber products listed in the Annex to Regulation 995/201010. The Fitness 

Check also considers whether the EUTR captures all relevant products; 

o  Actors: EUTR Competent Authorities (CAs) designated by Member States (MS), customs authorities, 

EU operators (those placing timber and timber products on the EU market for the first time in the course 

of a commercial activity – normally importers and forest owners), EU traders (those who buy or sell – 

for commercial purposes – timber or timber products already on the market), operators based legally 

outside the EU and EU monitoring organisations. 

 

FLEGT Regulation: 

o  Product scope: Timber and timber products to which the FLEGT licensing scheme applies irrespective 

of the partner country are listed in the Annex II of FLEGT Regulation. Some VPA product scopes are 

broader and some are narrower relative to the product scope of the EUTR; 

o  Actors: EU FLEGT CAs, EU customs authorities; relevant entities in VPA countries involved in the 

timber legality assurance system (defined by the partner country), e.g. relevant government agencies, 

including Licensing Authorities, customs, market participants or third-party organisations involved in in 

the whole supply chain – including allocation of logging rights, processing and transport to export.  

The following points apply to both EUTR and FLEGT Regulation:  

  All economic sectors involved in timber and timber product (and wood fibres) supply chains, in particular: 

Forestry, Import/export, Manufacturing, Wholesale and retail trade, Transport and logistics, Government and 

agencies 

5 Commission Regulation (EC) No 1024/2008 of 17 October 2008 laying down detailed measures for the implementation of Council Regulation (EC) No 
2173/2005 on the establishment of a licensing scheme for imports of timber into the European Community. 
6 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 (EUTR). 
7 Commission Delegated Regulation (EU) No 363/2012 of 23 February 2012 on the procedural rules for the recognition and withdrawal of recognition of 
monitoring organisations as provided for in Regulation (EU) No 995/2010 of the European Parliament and of the Council laying down the obligations of 
operators who place timber and timber products on the market. 
8 Commission Implementing Regulation (EU) No 607/2012 of 6 July 2012 on the detailed rules concerning the due diligence (DD) system and the 
frequency and nature of the checks on monitoring organisations as provided for in Regulation (EU) No 995/2010 of the European Parliament and of the 
Council laying down the obligations of operators who place timber and timber products on the market. 
9 Regulation (EU) 2019/1010 of the European Parliament and of the Council of 5 June 2019 on the alignment of reporting obligations in the field of 
legislation related to the environment, and amending Regulations (EC) No 166/2006 and (EU) No 995/2010 of the European Parliament and of the 
Council, Directives 2002/49/EC, 2004/35/EC, 2007/2/EC, 2009/147/EC and 2010/63/EU of the European Parliament and of the Council, Council 
Regulations (EC) No 338/97 and (EC) No 2173/2005, and Council Directive 86/278/EEC. 
10 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32010R0995&from=EN.  

5 

 
 
                                                                                                                                                              
Description  

  All sizes of businesses (i.e. micro, small, medium, and large) 

Temporal coverage 

 

 

EUTR: 2010 to 2020 

FLEGT Regulation: 2005 to 2020 

Evaluation criteria applied  

 

Effectiveness, efficiency, coherence, relevance and EU added value 

2. 

2. 

BACKGROUND TO THE INITIATIVE 

2.1 

2.1  Description of the initiative and its objectives 

Illegal logging has been -and still is- a pervasive problem of major international concern. Even 
though  agricultural  expansion  is  now  regarded  as  the  main  driver  of  deforestation11,12,  illegal 
logging  and  related  trade  still  has  a  devastating  impact  on  some  of  the  world's  most  valuable 
remaining forests as well as on the people who live in them and who rely on the resources that 
forests provide13. The EU’s policy to tackle the issues of illegal logging and associated trade was 
defined  in  FLEGT  Action  Plan  (AP)14  and  led  to  two  key  pieces  of  legislation,  the  FLEGT 
Regulation and the EUTR. The objective of the EUTR is to prevent illegally harvested timber and 
derived products from being placed on the EU market and it covers both domestically produced 
and imported timber. The objective of the FLEGT Regulation is to halt illegal logging in partner 
countries  and  ensure  that only  legal  timber  and  products  derived  therefrom  are  exported  to  the 
EU. 

The implementation of the two regulations should have made the fight against illegal logging a 
central  objective  of  public  and  private  forest  governance  in  both  producer  and  consumer 
countries. Clear objectives for the initiative were the implementation of applicable legislation, a 
significant number of countries should have improved their system of forest governance and its 
enforcement to halt illegal logging. Illegal logging should have shown clear signs of diminishing. 
More  countries  should  have  finalised  the  implementation  of  VPAs  and  established  well-
functioning licensing system, especially the main EU trade partners and illegal logging in these 
countries should have come to a halt.   

2.1.1 

2.1.1 

EU Timber Regulation (EUTR) 

The  EUTR  was  adopted  in  2010,  entered  into  force  in  2013  and  applies  in  the  EU  and  EEA 
(Norway, Iceland and Liechtenstein)15 market. It established the following obligations: 

1.  It  prohibits  the  placing  on  the  market  of  illegally  harvested  timber  or  timber  products 

derived from such timber (Article 4). 

2.  It  requires  operators16  who  place  timber  products  on  the  EU  market  for  the  first  time  to 
exercise ‘due diligence’ (DD) so as not to derive their timber from illegal sources (Article 4 
and 6). 

11 http://www.fao.org/3/ca9825en/CA9825EN.pdf. 
12 https://iopscience.iop.org/article/10.1088/1748-9326/7/4/044009/pdf. 
13 UNEP and INTERPOL (2012). Green carbon, black trade. 
14 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52003DC0251&from=EN.  
15 Decision of the EEA Joint Committee No 75/2013 of 3 May 2013 amending Annex II (Technical Regulations, standards, available at: 
https://www.efta.int/media/documents/legal-texts/eea/other-legal-documents/adopted-joint-committee-decisions/2013%20-%20English/075-2013.pdf.  
16 Any natural or legal person that places timber or timber products on the market for the first time. (include EU domestic forest owners). 

6 

 
 
 
 
                                                      
3.  It requires traders17 in timber and timber products, which have already been placed on the 

market, to keep records of their suppliers and customers (Article 5).  

The  product  scope  of  the  EUTR  is  contained  in  an  annex  to  the  Regulation  and  covers 
approximately 75%-90% of the value/volume of wood based products placed on the EU market18. 

The EUTR requires all MS to designate one or more CAs, responsible for the implementation of 
the  Regulation. According to Article 10, the CAs shall carry out checks  following a risk-based 
inspection plan to verify if operators comply with the requirements as set out in the EUTR.  

Since its entry into force, the operators have been obliged to perform DD and mitigate the risk of 
placing  illegal  timber  and  wood  products  on  the  EU  market  to  a  negligible  level.  First,  the 
operators need to have access and organise all relevant information to determine whether the risk 
of  illegal  harvest  of  timber,  according  to the  applicable legislation  in  the  country  of  harvest, is 
negligible (step  one). Then,  by  using  the  information as  described in their  own DD  system  for 
risk assessment, the operators have to analyse and evaluate the risk of illegally harvested timber 
entering in the supply chain - from harvest to placing on the EU market (step two). Finally, the 
operators have to take adequate and proportionate measures, as laid out in their DD system, in 
order  to  minimise  the  risk  of  illegality  effectively  to  a  negligible  level,  except  where  the  risk 
identified has already been negligible in the first place. In case such minimisation of the risk is 
not  possible,  they  have  to  refrain  from  placing  this  timber  on  the  EU  market  and  they  may  to 
choose  a  new  supplier,  country  of  harvest,  species  or  take  other  comparable  measures19  (step 
three). 

The EUTR allows for the provision of technical  and other assistance  and guidance (awareness-
raising, training and capacity-building) to operators. Such technical assistance is often provided 
by the CA, and in some instances is channelled through sectoral organisations.  It also provides 
for "Monitoring Organisations" (MOs), recognised by the Commission (Art. 8). MOs, which can 
be public or private entities, may provide operators with operational DDS and verify their proper 
use, however the responsibility to ensure compliance with the EUTR requirements is always on 
the operator. Third part certification can be an additional element for risk mitigation, however it 
does not represent a proof of meeting DD requirement under EUTR. 

In 2016, the Commission published a report on the first review of the EUTR covering the period 
from March 2013 to March 2015 and has since published biennial reports on the implementation 
of the Regulation, based on bi-annual national reports submitted by EU MS, Norway, Iceland and 
Lichtenstein  (covering  the  periods  March  2015-2017  and  March  2017-2019)20.  From  2019 
onwards,  MS  have  been  reporting  annually  on  the  implementation  of  EUTR,  in  line  with 
Regulation (EU) 2019/101021.  

2.1.2 

2.1.2 
Regulation 

The  Forest  Law  Enforcement,  Governance  and  Trade  (FLEGT) 

The  FLEGT  Regulation  entered  into  force  in  2005  and  provides  for  partnership  agreements 
(VPAs)  between  the  EU  and  timber  producing  countries.  A  VPA  is  thus,  a  bilateral  trade 

17 Any natural or legal person who, in the course of a commercial activity, sells or buys on the internal market timber or timber 
products already placed on the internal market. 
18 https://www.thuenen.de/media/ti-  
themenfelder/Maerkte__Handel__Zertifizierung/Kontrolle_international_gehandelter_Hoelzer/90_Prozent_der_Holzimporte_werden
_erfasst/Thuenen_Working_Paper_EUTR-MarketCoverage_ExecutiveSummary.pdf. 
19 https://ec.europa.eu/environment/forests/pdf/28_02_2020_Guidance_on_Due_Diligence.pdf. 
20 European Commission. (2016). Evaluation of Regulation EU/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). Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016SC0034 ; 
European Commission. (2018). 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), 
Biennial report for the period March 2015. Retrieved from https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52018DC0668&from=EN.  

21 https://eur-lex.europa.eu/eli/reg/2019/1010/oj/eng.  

7 

 
 
 
                                                      
agreement and -inter alia- contains a definition of what is considered legally produced timber in a 
partner country, commits the partner country to only export legally produced timber and timber 
products  (covered  in  each  VPA,  domestically  harvested  and  also  imported)  to  the  EU,  and 
commits  partner  countries  to  set  up  a  timber  legality  assurance  systems  (TLAS)  to  this  end. 
Therefore, a VPA country with an operating system in place commits to export only timber and 
timber  products  covered  by  a  FLEGT  license.  Timber  products  covered  by  a  valid  FLEGT 
licence are considered to comply with the requirements of the EUTR. Currently, after almost 15 
years  of  engaging  in  VPA  processes  with  15  different  countries,  only  one  (Indonesia)  has  an 
operational TLAS in place and issues FLEGT licences (since November 2016). 

Box 1: Indonesia’s efforts to tackle illegal logging pre-dated the launch of the VPA process, as 
in  2003,  Indonesia  launched  a  multi-stakeholder  process  to  design  a  timber  legality  assurance 
system  (SVLK),  the  goal  of  which  was  to  ensure  that  timber  and  timber  products  harvested, 
imported and processed in Indonesia originate from legal sources and that companies producing 
and processing timber products comply with relevant Indonesian laws and Regulations.  

VPA negotiations between Indonesia and the EU began in 2007 and Indonesia became the first 
Asian  country  to  ratify  a  VPA  in  2014.  The  SVLK,  a  precursor  to  FLEGT  licensing,  became 
already operational in 2013, starting issuing V-Legal Documents. This was instrumental for the 
licencing  to  start  and  differentiates  Indonesia  from  other  VPA  countries.  Indonesia  started 
issuing FLEGT licences on 15 November 2016. (see box 4 as well) 

A  FLEGT  license  is  a  shipment-based  document  of  a  standard  format  that  is  forgery-resistant, 
tamper-proof  and  verifiable,  paper  based  or  electronic,  issued  and  validated  by  a  partner 
country’s  licensing  authority.  Each  FLEGT  license  has  a  unique  number  and  contains,  among 
others,  all  product  HS  codes  and  a  description  of  goods,  weight,  units,  species,  and  country  of 
harvest. The EU operators that place timber and timber products on the market covered by a valid 
FLEGT licences are deemed to have exercised the EUTR due diligence. 

The Commission published guidelines in 201422 -and updated in 202023- to support Customs and 
FLEGT Competent Authorities (CAs) in effectively carrying out their tasks in accordance with 
the FLEGT legislation were first published. All FLEGT licenses have to be validated by the CA 
in the country of entrance and thereafter cleared by the customs authorities. In case of doubt as to 
the  validity  of  a  FLEGT  licence,  the  CAs  may  ask  the  licensing  authorities  for  additional 
verification  and  seek  further  clarification,  as  set  out  in  each  VPA.  Furthermore,  the  FLEGT 
Regulation  provides  that  CAs  can  decide  on  the  need  for  further  verification  (physically 
inspection of the goods or inspection at the operators’ premises) of shipments using a risk-based 
approach. 

The  Commission  publishes  Annual  Synthesis  Reports24  on  the  implementation  of  the  FLEGT 
Regulation licensing scheme with Indonesia (available for the years 2016, 2017 and 2018), based 
on the national reports submitted by the MS25. In line with Regulation (EU) 2019/101026, aligning 
reporting obligations in the field of environmental legislation, MS are required to ensure a high 
level of transparency and make available the required information supporting their reporting to 
the Commission on the implementation of the FLEGT Regulation27.  

Since 2010, the EU has signed 15 VPAs.  

22 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52014XC1104(01)&from=FR.  
23 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020XC0121(01)&from=EN.  
24 https://ec.europa.eu/environment/forests/FLEGT Regulation_Regulation_Reports.htm.  
25 https://op.europa.eu/en/publication-detail/-/publication/4417ef79-9714-11e9-9369-01aa75ed71a1.   
26 https://eur-lex.europa.eu/eli/reg/2019/1010/oj/eng.  
27 https://ec.europa.eu/environment/forests/FLEGT_Regulation_Reports.htm. 

8 

 
 
 
                                                      
2.1.3 

2.1.3 

Intervention Logic  

The  intervention  logic28  focuses  on  the  causality  of  the  EUTR  and  FLEGT  Regulation  in 
delivering expected results and impacts.  

The  intervention  logic  starts  from  the  need  to  prevent  and  combat  illegal  logging  and  related 
trade  –  and  the  objectives  of  both  Regulations  as  explained  in  section  2.1.  Inputs  are  then 
outlined  from  the  European  Commission  (EC),  EU  MS,  partner  countries,  economic  operators 
and other stakeholders (in terms of financial and human resources). These undertake a range of 
activities – both the adoption of the EUTR and FLEGT Regulation and the actions of the EC, MS 
and duty holders that follow from implementation, including monitoring and enforcement. 

Following  through  the  activities  leads to a  number  of  expected  outputs.  Under the  EUTR,  the 
legality of all timber and timber products placed on the internal market for the first time should 
be  ensured.  All  operators  who  place  timber  products  on  the  EU  market  should  put  in  place 
adequate  and  effective  DD  procedures  so  as  not  to  source illegally  harvested  timber,  and  must 
take appropriate action that allow the identification of non-negligible risk. Traders in timber and 
timber  products,  which  have  already  been  placed  on  the  market,  should  keep  records  of  their 
suppliers  and  customers.  Implementation  and  enforcement  based  on  inspections  of  operators 
should  ensure  a  level  playing  field  for  actors  across  MS  and  in  the  EEA  through  effective, 
proportionate and dissuasive measures.  

Under  the  FLEGT  Regulation,  all  timber  and  wood  products  from  the  partner  countries  –  and 
covered by a VPA with an operational FLEGT licensing system – placed on the EU market must 
be covered by valid FLEGT licences. Implementation and enforcement based on customs boarder 
inspections of the validity of the FLEGT licenses should be uniform across MS including through 
effective, proportionate and dissuasive penalties. 

If the implementation of the EUTR and FLEGT Regulations is effective, this should lead to the 
following  key  expected  outcomes:  adequate  DD  exercised  by  operators;  legal  products  being 
imported, all VPA countries reaching a state of having operational FLEGT licencing scheme with 
valid  FLEGT-licenses;  effective  enforcement  of  DD  and  verification  of  FLEGT  licenses; 
increased  cooperation  between  CAs,  customs,  the  EU  and  exporting  country  governments; 
improved  supply  chain  transparency;  and  improved  forest  governance,  management  and  law 
enforcement. In turn, these outcomes should result in the following positive  impacts: reduction 
of illegal logging and associated trade internationally and more sustainable forest management in 
timber producing countries.  

A  number  of  external  factors  are  relevant  in  relation  to  the  intervention  logic.  For  both 
Regulations,  those  are  developments  in  other  policies,  initiatives  or  economic  developments 
which could interact with and influence the outcomes of the EUTR and FLEGT Regulation and 
changes  in  international  trade  patterns.  Possible  examples  are  multilateral  initiatives  (e.g.  the 
Convention  on  Biological  Diversity  –  CBD,  the  United  Nations  Framework  Convention  on 
Climate  Change  –  UNFCCC  etc.),  unilateral  action  on  the  part  of  exporting  countries,  and 
developments in other areas of European policy, a shift in the demand for hard wood from the 
European  to  the  Asian  market,  a  worldwide  increasing  meat  consumption  and  by  consequence 
growing  demand  for feed such  as  soy  and  corn,  and fines/criminal sanctions  for  environmental 
crime being much lower than e.g. for drug or human trafficking.  

2.2 

2.2  Baseline 

2.2.1 

2.2.1 

Introduction 

To evaluate the functioning and impacts of the FLEGT  Regulation and EUTR, a counterfactual 
scenario  (the  ‘baseline’)  has  been  developed.  This  is  the  hypothetical  scenario  in  which  the 
Regulations would not have been implemented. The baseline provides a point of comparison to 

28 Figures with Intervention logic are in Annex 5. 

9 

 
 
                                                      
determine  the  actual  impact  of  the  Regulations,  through  comparison  to  the  current  observed 
situation. In practice, there may have been developments and progress towards the objectives of 
the  Regulations  in  their  absence,  but  it  is  critical  to  try  and  distinguish  this  from  additional 
progress which can be attributed to the implementation of the Regulations themselves. 

For  this  Fitness  Check  two  separate  baselines  have  been  established  (one  for  each  Regulation) 
rather than a single common baseline. This has been done because of the different start dates of 
the two regulations and to facilitate (as far as possible) the separate assessment of the EUTR and 
FLEGT Regulation, in order to understand what has worked well and what not so well for each 
Regulation. This approach has been adopted to maximise the lessons that can be learned from the 
implementation of two different policy mechanisms. Although two separate baselines have been 
established,  it  is  also  important  to  consider  the  interaction  between  the  Regulations  and  their 
combined  effect  on  the  achievement  of  their  complementary  objectives  to  stop  illegal  logging. 
The aggregate effects are therefore also considered, in particular when drawing together overall 
conclusions. 

Key distinctions between the baselines are: (a) the start date (2005 for the FLEGT Regulation and 
2010  for  the  EUTR)  and  (b)  that  given  the  FLEGT  Regulation  was  implemented  before  the 
EUTR, the former forms part of the baseline for the latter. In addition, given the need to adopt a 
case study approach in specific areas of the analysis (see Section 4.4.3), the baselines also differ 
due  to  the  differences  in  the  countries  chosen  for  the  specific  case  studies.  However  it  is 
important to note that although it is possible to split out EUTR effects (in non-VPA countries the 
FLEGT Regulation can reliably be assumed to have no effect), splitting the effects of the FLEGT 
Regulation from the EUTR is more problematic: in VPA countries, both EUTR and the FLEGT 
Regulation  will  have  an  effect.  For  FLEGT  licencing  countries,  the  effects  of  the  FLEGT 
Regulation should be more clearly identified, given the way the two Regulations work together. 
This is considered when drawing conclusions from the analysis. 

The baselines include qualitative and quantitative elements to  describe  the situation at the time 
the legislation was proposed and adopted, and subsequently how a scenario in the absence of the 
Regulations would have developed over the appraisal period. 

The starting points for defining the baselines were the Impact Assessments (IA) accompanying 
the proposal for the adoption of the FLEGT Regulation29 and EUTR30. The IAs set quantitative 
baselines for levels of illegal logging and levels of illegal timber placed on the internal market 
against  which  impacts  were  assessed.  These  were  based  on  levels  at  the  time  the  Regulations 
were  introduced  and  were  not  assumed  to  change  over  the  appraisal  period.  These  levels  are 
presented alongside wider evidence in Section 2.2.2 below. 

2.2.2 

2.2.2 

Overview of the situation prior to adoption  

Due to its clandestine nature, accurate data about the levels of illegal logging and associated trade 
and respective trends are difficult to come by. Activity data  are often based on estimates using 
secondary information sources. A World Bank review31 of its global forest policy suggested that 
in many countries illegal logging was at least similar in size to legal production. It also noted that 
between  USD  10-15  billion  of  forest  resources  were  being  lost  from  public  lands  each  year. 
Indeed, at the time the FLEGT Regulation IA32 was developed, there was no single information 
source which consistently tracked illegal logging across countries or over time, but in general it 
was  estimated that 30-50%  and  in  some  regions  up  to  90%  of all  harvesting in  the  most forest 
rich countries could be related to illegal logging.  

It  is  problematic  to  compare  directly  between  rates  reported  for  different  countries  and  years 
given  the  variation  in  authorship,  no  clear  definition  of  illegal  logging  and  methodology. 
However, it is clear that illegal logging was prevalent in many countries, driven by a number of 

29 https://ec.europa.eu/smart-Regulation/impact/ia_carried_out/docs/ia_2004/sec_2004_0977_en.pdf. 
30 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52008SC2615&from=EN. 
31 World Bank. (1999). Sustaining Forests - A Development Strategy. Washington: The World Bank. Retrieved from   

http://documents1.worldbank.org/curated/en/424531468781760578/pdf/297040v-1.pdf.  

32 https://ec.europa.eu/smart-Regulation/impact/ia_carried_out/docs/ia_2004/sec_2004_0977_en.pdf. 

10 

 
 
                                                      
underlying  forces,  including:  lack  of  institutional  capacity,  weak  rule  of  law,  corruption, 
governance failure and strong international demand for timber. 

At the time the FLEGT Regulation was introduced in 2005, there was no other EU policy directly 
targeting illegal logging.  

Table 2-1 Baselines for the Fitness Check 

FLEGT Regulation 

EUTR 

(with a specific focus on case study countries that 

(with a specific focus on non-VPA case study 

subsequently engaged in the VPA process) 

countries to isolate the impacts of the EUTR) 

When FLEGT Regulation was adopted (2005), levels 

of illegal logging and the risk of illegal timber on the 

EU market were substantial issues.  

When the EUTR was adopted (2010), the 

issues of illegal logging and the risk of illegal 

timber on the EU market remained 

The 1999 World Bank review of its global forest 

substantial. There was no particular impact of 

policy suggested that in many countries illegal logging 

the FLEGT Regulation, given that few 

Starting point 

was at least similar in size to legal production. It also 

countries at that point had signed VPAs, and 

noted that between USD 10-15 billion of forest 

none had progressed to licencing). In the 

resources were being lost from public lands each year.  

absence of data, it is not possible to conclude 

The IA in support to the FLEGT Regulation estimated 

that 30-50% and in some regions up to 90% of all 

harvesting in the most forest rich countries could be 

related to illegal logging. 

that levels of illegal logging or illegal timber 

placed on the EU market in 2010 were 

substantially different to levels in 2005 (at 

the start of the FLEGT Regulation baseline). 

  From 2010 onwards, several further policies and initiatives were introduced, both multilateral and 

unilateral and in both importing and exporting countries. There is potential for these actions to 

have had an impact on the volume and trends of illegal logging. However, it is not possible to 

define the scale of these impacts in the absence of the FLEGT Regulation.  

  The growing market power of China and EU consumer preference for processed products could 

have influenced risk, in particular of illegal timber entering the EU, whereas improvements in 

technology could have served to reduce the risk of illegal timber entering the EU. However given 

data limitations, it is difficult to define changes with any certainty. 

 

It is assumed that MS would not have introduced unilateral action to reduce illegal logging or 

illegal timber on domestic markets through trade regulations since trade is EU competence and the 

market weight of single countries would have been limited. 

  No FLEGT licenses were issued until late 2016. The potential interaction between the EUTR and 

the FLEGT Regulation depends on the impact of the overall VPA processes, which is explored 

through this Fitness Check. 

FLEGT Regulation 

EUTR 

From 2005, the risk of illegal logging and illegal 

timber entering the EU market is considered to 

have been substantial. Without any FLEGT 

license the situation is assumed to be unchanged 33 

From 2010, the risk of illegal logging and illegal 

timber entering the EU market would likely 

have remained unchanged. This could 

potentially have sustained at similar levels 

Expected development of 

pressures and impacts in the 

absence of legislation 

Summary 

33 AF & PA. (2004). American Forest & Paper Association from: Seneca Creek Associates and Wood Resources International, 2004, “Illegal” 

Logging and Global Wood Markets: The Competitive Impacts on the US Wood Products Industry.”. American Forest & Paper 
Association. The Forestry Commission of Ghana. (2003). Keynote Address by Hon. Prof. Dominic K. Fobi—Minister for Lands & 
Forestry. Retrieved from www.fcghana.com/news/ministers_speech_afleg.htm 

Tacconi, L.; Obidzinski, K.; and Agung, F (2004). Learning Lessons to Promote Certification and Control Illegal Logging in Indonesia 
Report for the WWF/TNC Alliance to Promote Forest Certification and Combat Illegal Logging in Indonesia. Centre for International 
Forestry Research. 

11 

 
 
 
 
 
                                                      
 
(e.g. illegal logging as a percentage of overall 

reported at that time  

production of VPA countries: Indonesia 60-83%, 

Cameroon 50-65%, Ghana 30-50% ) 34 

(e.g. illegal logging as a percentage of overall 

production in non-VPA countries: Russia 15-

60%, China 30-50%, Brazil 15-37%) 35  

3. 

3. 

IMPLEMENTATION AND STATE OF PLAY 

This section presents a summary of the status of implementation of the FLEGT  Regulation and 
EUTR based on the MS reports on the implementation of both Regulations. The information on 
the  current  status  of  illegal  logging  is  presented  in  Section  5.1  where  the  effectiveness  of  the 
Regulations is assessed.  

3.1 

3.1  EUTR 

Implementation of the EUTR in EU MS and the European Economic Area (Norway, Iceland and 
Lichtenstein)  involved  establishing  national  legal  frameworks  for  the  application  of  the  EUTR 
and the designation of CA to check the implementation by operators, enforcing the Regulation by 
issuing  notices  of  remedial  actions  and  applying  sanctions  and/or  penalties  in  case  of 
infringements. This  section  is  based  on  the  most  recent reporting  on the implementation  of the 
EUTR.  It  draws  on  the  European  Commission  reports  on  the  state  of  EUTR  implementation, 
namely the EUTR Review 201536 and biennial37 and annual38 reports. These are in turn informed 
by underlying analysis of the biannual and annual reports39 by the MS on EUTR application40. 

3.1.1 

3.1.1 

Designation of Competent Authorities  

All  EU  MS  and  EEA  countries  have  designated  CAs  to  implement  and  enforce  the  EUTR 
Regulation.  In  18  MS,  national  CAs  have  the  sole  responsibility  for  checking  operators,  while 
this is the case in 11 MS for domestic timber. In 10 MS the responsibility for checking domestic 

World Bank and WWF. (2002). Forest Law Assessment in Selected African Countries. Retrieved from www.illegal-

logging.info/papers/WWFWorldBankForestLawAssessment.pdf. 

34 AF & PA. (2004). American Forest & Paper Association from: Seneca Creek Associates and Wood Resources International, 2004, “Illegal” 

Logging and Global Wood Markets: The Competitive Impacts on the US Wood Products Industry.”. American Forest & Paper 
Association. The Forestry Commission of Ghana. (2003). Keynote Address by Hon. Prof. Dominic K. Fobi—Minister for Lands & 
Forestry. Retrieved from www.fcghana.com/news/ministers_speech_afleg.htm 

Tacconi, L.; Obidzinski, K.; and Agung, F (2004). Learning Lessons to Promote Certification and Control Illegal Logging in Indonesia 
Report for the WWF/TNC Alliance to Promote Forest Certification and Combat Illegal Logging in Indonesia. Centre for International 
Forestry Research. 

World Bank and WWF. (2002). Forest Law Assessment in Selected African Countries. Retrieved from www.illegal-

logging.info/papers/WWFWorldBankForestLawAssessment.pdf. 

35 AF & PA. (2004). American Forest & Paper Association from: Seneca Creek Associates and Wood Resources International, 2004, “Illegal” 

Logging and Global Wood Markets: The Competitive Impacts on the US Wood Products Industry.”. American Forest & Paper 
Association. The Forestry Commission of Ghana. (2003). Keynote Address by Hon. Prof. Dominic K. Fobi—Minister for Lands & 
Forestry. Retrieved from www.fcghana.com/news/ministers_speech_afleg.htm 

ICUN. (2005). The Beginning of the ENA FLEG Process in Russia: Civil Society Insights. 
USDA Foreign Agricultural Service. (2003). People’s Republic of China Solid Wood Products Annual 2003. Retrieved from 

www.fas.usda.gov/gainfiles/200308/145985736.pdf 

IMAZON. (2005). Human Pressure in the Brazilian Amazon. IMAZON (Amazon Institute of People and the Environment). Retrieved from 

www.imazon.org.br/especiais/especiais.asp?id=318. 

36 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016DC0074.  
37 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018DC0668&from=EN;  

https://eur-lex.europa.eu/resource.html?uri=cellar:96d6591a-0495-11eb-a511-01aa75ed71a1.0010.02/DOC_1&format=PDF.  

38 https://ec.europa.eu/environment/forests/pdf/30092020_EUTR_Overview%202019.pdf. 
39 As of January 2020, MS are required to report to the Commission annually.  
40 UNEP-WCMC. (2018). Background analysis of the 2015-2017 national biennial reports on the implementation of the European Union’s 

Timber Regulation (Regulation EU No 995/2010). Retrieved from 
https://ec.europa.eu/environment/forests/pdf/WCMC%20EUTR%20analysis%202017.pdf  

UNEP-WCMC. (2020). EUTR Analysis 2019: Background analysis of the 2017-2019 national biennial reports on the implementation of the 

European Union’s Timber Regulation (Regulation EU No 995/2010),. Retrieved from 
https://ec.europa.eu/environment/forests/pdf/EUTR%20Analysis%202017-2019.pdf  

UNEP-WCMC. (2020). Key Obligations and Practical Aspects of the Application of the EUTR - 2019. Retrieved from 

https://ec.europa.eu/environment/forests/pdf/30092020_EUTR%20MS%20Key%20obligations%20and%20practical%20aspects%20of%2
0implementation%20and%20enforcement%202019.pdf.  

12 

 
 
 
                                                                                                                                                              
timber operators has been partly or fully delegated to regional CAs, while this is the case in 7 MS 
for imported timber.  

The human and financial resources available to CAs varied substantially across MS (2017-2019 
Biennial  Report).  Resources  dedicated  to  control  imported  and  domestic  timber  were  typically 
reported  together.  Combined  human  resources  ranged  from  0.125  Full-Time  Equivalent  (FTE) 
staff  in  Luxembourg,  to  as  many  as  601  FTE  staff  in  Italy  –  however  the  latter  most  likely 
include  customs,  police  and  support  staff.  Most  of  the  MS,  including  major  timber  importers, 
have  less  than  10  FTE  available  for  implementation  and  enforcement  of  EUTR.  For  instance, 
Belgium, Denmark, Finland, Ireland, Malta and the Netherlands have between 2 to 3 FTE each. It 
is important to note that it is difficult to compare between countries based on the data collected 
through the Biennial Reports due to varying levels of detail provided by MS. However, it seems 
that some countries devote very limited resources to the implementation and enforcement of the 
EUTR considering the number of operators and volume of import. 

3.1.2 

3.1.2 

Checks on operators, traders and substantiated concerns 

Between 2017 and 2019, MS carried out 3,976 checks on importing operators and 17,280 checks 
on  domestic  operators.41  The  number  of  checks  reflects  the  differences  in  MS’  import  and 
domestic  production  –  number  of  operators  and  forest  owners.  The  number  of  small  forest 
owners  is  high  in  some  MS  where  the  EUTR  has  been  reported  as  part  of  the  national  forest 
inspections. This is one of  the  reasons  for the  high inspection  numbers.  The number  of  checks 
seems to have stayed broadly constant in the reporting periods. The actual number of operators 
identified by MS, or lack of identification in some cases, may be a challenge in terms of a risk-
based approach of the inspection planning and statistics on percentages of coverage by checks. 

Table 3-1 Numbers of checks on operators, traders and substantiated concerns (SCs)  

(from published Biennial and Annual reports42) 

Checks on operators 

Substantiated concerns43 - 

operators 

2015 – 17** 

2017 - 19 

2019*** 

Total 

Domestic 

Importers 

     20,500  

         21,256  

     17,700  

         17,280  

        2,800  

           3,976  

# MS receiving SCs 

              14  

                 18  

Operators identified 

              80  

               289  

Operators checked 

              69  

               282  

Enforcement actions 

              33  

                 73  

9,300 

7,916 

1,384 

17 

261 

* 

* 

Checks on traders 

Total 

        2,418  

           2,333  

2,055 

Substantiated concerns - traders 

# MS receiving SCs 

                7  

                   3  

Traders identified 

              64  

               188  

Traders checked 

              63  

               188  

Enforcement actions 

              16  

               165  

* 

* 

* 

* 

41 UNEP-WCMC. (2020). EUTR Analysis 2019: Background analysis of the 2017-2019 national biennial reports on the implementation of the 

European Union’s Timber Regulation (Regulation EU No 995/2010),. Retrieved from 
https://ec.europa.eu/environment/forests/pdf/EUTR%20Analysis%202017-2019.pdf.  

42 https://ec.europa.eu/environment/forests/timber_regulation.htm. 
43  In  the  EUTR,  substantiated  concerns  are  mentioned  as  follows:  “Checks  may  be  conducted  when  a  competent  authority  is  in 
possession  of  relevant  information,  including  on  the  basis  of  substantiated  concerns  provided  by  third  parties,  concerning 
compliance by an operator with this Regulation.” 

13 

 
 
 
 
                                                      
Notes: *No data reported in published reports;** the reporting period goes from March to March of the 
respective years; ***2019 data represents one year of implementation, relative to two years from the biennial 
reports 

Between  2017  and  2019,  in  absolute  numbers,  the  highest  number  of  checks  on  domestic 
operators were performed in Lithuania (6,824), Italy (4,076), Romania (1,823) and Austria (894). 
With respect to operators that import timber from outside the EU, Italy (1,838), Germany (452), 
Spain (268) and Romania (161) carried out most checks. Combining these figures with estimates 
on the actual number of operators importing timber indicates that there is a wide variation in the 
coverage of operators checked across MS.  

For traders, the number of checks performed varies between MS, though it was broadly constant 
between the 2015-17 and 2017-19 periods, but has seen an increase in 2019 (comparing yearly 
data for 2019 to annual average data for preceding periods).  

The number of substantiated concerns regarding operators has increased over the implementation 
period. The vast majority of those identified are checked, with enforcement actions following in a 
not insignificant number of cases. The same appears to be true regarding substantiated concerns 
of traders. 

3.1.3 

3.1.3 

Penalties and infringement cases 

Provisions for penalties  

Countries  are  required  to  have  provisions  for  penalties  that  are  ‘effective,  dissuasive  and 
proportionate’.  All  reporting  countries  have  included  penalties  for  EUTR  offenders  in  national 
legislation,  however  the  types  of  penalty  and  maximum  levels  vary  across  MS:  administrative 
fines  and  seizures  can  be  imposed  by  23  MS,  criminal  fines  by  16,  imprisonment  by  17, 
suspension of trade by 15 and other types of penalties by 11. Details on the fines applicable to 
infringements of the EUTR provided by 27 MS highlighted potential fines ranged from EUR 50 
to an unlimited amount. 

Except  for  Italy,  all  CAs  have  the  authority  to  issue  notices  of  remedial  action,  whereby  an 
operator is notified of shortcomings in their DD process and is required to follow up.  

Nearly  all  CAs  (except  Croatia,  Poland,  France  and  the  UK)  can  impose  Immediate  Interim 
Measures, such as the temporary seizure of timber. The grounds for such measures differ across 
the  MS44.  As  for  other  regulations, the  individual MS  fear being  regarded  as  more  strict  in  the 
enforcement than other MS. 

Infringement cases and enforcement actions 

For  the  period  2017-2019,  26  MS  reported  a  total  of  2,273  infringements  of  the  EUTR  by 
operators45.  Only  Croatia  and  Greece  reported  no  infringements  based  on  their  checks.  A 
summary of the data presented in published reports is found in  Table 3-4. The total number of 
infringements appears to decrease slightly in the 2019 annual period (comparing annual averages 
over the preceding period). 

Table 3-2 Numbers of infringements, enforcement actions and court cases  

(from published Biennial and Annual reports) 

Infringements 

Total 

* 

           2,273  

               904  

2015 – 16 

2017 - 18 

2019 

44 UNEP-WCMC. (2020). EUTR Analysis 2019: Background analysis of the 2017-2019 national biennial reports on the implementation of the 
European Union’s Timber Regulation (Regulation EU No 995/2010),. Retrieved from 
https://ec.europa.eu/environment/forests/pdf/EUTR%20Analysis%202017-2019.pdf.  
45 Ibid. 

14 

 
 
 
 
 
                                                      
Domestic 

Imported 

Total 

* 

* 

* 

           1,552  

               700  

410 

494 

           2,450  

               762  

Enforcement actions 

Domestic 

        2,299  

           1,665  

Imported 

           955  

               762  

319 

443 

Court cases 

 25**  

                 13*** 

* 

Notes: *No data reported; **court cases reported; ***court cases concluded 

Most  infringements  (1,552)  were  related  to  domestic  timber,  while  700  infringements  were 
reported for importers (and 21 to unspecified timber). However, note that the number of check on 
domestic operators was significantly higher than on importers (see table 3-3 above), although the 
number  of  EU  foresters  placing  timber  on  the  market  is  estimated  to  3-4  million  while  the 
number of importer are 140.000. The most common infringement related to domestic timber was 
the placement of illegally harvested timber on the market (1,228), whereas for imported timber 
the majority of infringements involved a breach of DD requirements (390). The main countries 
from  which  the  illegal  timber  originated,  where  this  data  was  provided,  were  China,  Ukraine, 
Russia,  Myanmar,  Albania  and  Malaysia,  as  well  as  in  some  isolated  cases  Egypt,  Tunisia, 
Singapore  and  the  United  Arab  Emirates.  The  latter  may  suggest  re-export  of  timber  as  these 
countries are not generally producers of timber.  

Comparing between Table 3-3 and Table 3-4, it is clear that the level of infringements identified 
(per typical check) is far higher for importing operators than for domestic operators.  

In  response,  2,450  enforcement  actions  were  taken,  the  majority  (1,665)  applied  to  domestic 
timber.  The  level  of  enforcement  actions  appears  to  have  fallen  significantly  in  2019  (again 
comparing annual averages). For domestic timber, a range of penalty types was applied, the most 
common  being  488  administrative  fines,  231  notices  of  remedial  action,  and  911  ‘other 
penalties’. For imported timber, likewise a range of types of penalty was deployed by CAs, the 
most  common  again  being  remedial  action  (412) and  administrative fines  (272).  Thirteen court 
cases concluded during the period. 

Between 2017 and 2019, enforcement actions on traders were taken in seven countries (Austria, 
Germany, Hungary, Italy, Poland, Romania and Spain). Of these more than 90% of enforcement 
actions were taken in Hungary based on breached national legislation. In the majority of cases, a 
notice of remedial action was sent, followed by administrative fines. 

3.2 

3.2  FLEGT Regulation  

To  date,  VPAs  have  been  signed  with  Ghana  (200946),  the  Republic  of  the  Congo  (201047), 
Cameroon (201048), the Central African Republic (201149), Liberia (201150), Indonesia (201451), 
Vietnam (201852) and Honduras (2021). Indonesia is the first and only country to date that has an 
operational  licensing  system  and  which  issues  FLEGT  licences  (starting  from  15  November 
2016). At the time of writing this report, the EU has concluded negotiations and initialled a VPA 
with  Guyana,  while  negotiations  were  ongoing  with  Côte  d'Ivoire,  the  Democratic  Republic  of 
the Congo, Gabon, Laos, Malaysia and Thailand. It  is important to note  however that although 
the  Democratic  Republic  of  the  Congo,  Gabon  and  Malaysia  are  identified  as  countries  in 
negotiation, these processes have been on hold for more than five years.  

46 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22010A0319(01).  
47 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22011A0406(03).  
48 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22011A0406(02).  
49 https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1587384460484&uri=CELEX:22012A0719(02). 
50 https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1587384568183&uri=CELEX:22012A0719(01).  
51 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.150.01.0252.01.ENG.  
52 https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1587384877592&uri=CELEX:22019A0605(01).  

15 

 
 
 
 
                                                      
When an operator imports products covered by a FLEGT license there is no requirement to carry 
out  DD  under  the  EUTR.  The  operator  only  have  to  keep  the  license  for  five  years  as 
documentation for the import. The FLEGT Regulation requires MS to designate CA or CAs and 
to adopt effective, proportionate and dissuasive penalties to enforce the Regulation in accordance 
with  national  legislation.  The  national  reports  provide  an  overview  of  the  status  of  national 
implementation, and are a means of assessing the level of consistency achieved across MS.  

The summary below is based on the three synthesis reports on the implementation of the FLEGT 
Regulation published by the European Commission and covering the period 2016-201953.  

3.2.1 

3.2.1 

Designation of Competent Authorities  

All  MS  have  designated  a  CA  or  CAs  to  enforce  the  FLEGT  Regulation.  MS  have  either 
appointed customs authorities as, or part of, CAs (11 MS) or designated separate authorities (17 
MS). Where customs and CAs are separate, MS have put in place arrangements (e.g. agreements 
or  a  Memorandum  of  Understanding)  between  CAs  and  customs,  to  ensure  that  they  can 
effectively cooperate on the implementation of the FLEGT Regulation. 

3.2.2 

3.2.2 

FLEGT Licences and shipments received  

Indonesia started issuing FLEGT licenses  on 15 November 2016 for each shipment of products 
covered  by  the  VPA.  (During  2016-2019  FLEGT  CAs  received  more  than  94000  FLEGT 
licences from Indonesia and the majority of them (99%) were validated. The number of FLEGT 
licences reported as cleared by customs was much lower (Figure 3-1), which may be due to the 
fact that the shipments covered by these FLEGT licenses were issued to importers in the EU that 
ended up not purchasing the products, or were deviated to non-EU destinations.  

Figure  3-1  Number  of  FLEGT  licenses  received  and  validated  by  FLEGT  CAs,  and  cleared  by  customs  over  the 
period  2016-2019  (all  FLEGT  licences  come  from  Indonesia,  the  only  country  currently  issuing  FLEGT  licences). 
Information is based on MS reports (for those MS that submitted reports). 

Source:  Own compilation based on European Commission FLEGT Regulation licensing scheme annual synthesis 
reports (2018-2020)  

53 https://ec.europa.eu/environment/forests/pdf/FLEGT_Work_Plan_2018_2022.pdf;  
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52019DC0249&from=EN;  
https://eur-lex.europa.eu/resource.html?uri=cellar:784f3dc6-c2a6-11ea-b3a4-01aa75ed71a1.0018.02/DOC_1&format=PDF;  
https://ec.europa.eu/environment/forests/pdf/19102020_FLEGT%20Overview%202019.pdf.  

16 

 
 
 
 
                                                      
 
In  2019,  the  largest  number  of  licenses  was  received  by  the  Netherlands  (8,048),  United 
Kingdom (5,790), Germany (5,460), France (3,362), and Belgium (3,088). 

Quantities imported  

MS  report  on  the  quantities  of  timber  and  timber  products  as  defined  on  the  FLEGT  licences 
received  and  validated  by  the  CAs,  and  those  actually  imported  (i.e.  quantities  cleared  by 
customs). The data from the Annual Synthesis Reports is presented in Table 3-3. 

Table 3-3 Quantities imported (million kg) 

Reported on validated FLEGT licences 

Cleared for import by EU customs 

2016 

13.6* 

* 

2017 

658 

449 

2018 

694 

2,993** 

2019 

684 

624 

Note:  *2016  Annual  Synthesis  Report  does  not  include  quantity  cleared  by  customs.  It  also  reports  the  imports  of 
‘FLEGT-licenced timber’, rather than quantity listed on the FLEGT licences; 2016 data is for period 15 November to 
31 December 2016  
** 2,470 million kg of furniture for bedroom use (HS 9403.50) was reported by the United Kingdom’s customs. This 
was two orders of magnitude greater than the quantity for the same HS code reported on FLEGT licences validated by 
the Competent Authority. These figures were queried with the United Kingdom but no clarification was provided. 

Overall, there was an increase in the quantities reported on  validated FLEGT licenses  from the 
start  of  licensing  in  2016  till  2018,  with  a  slight  decrease  in  2019.  There  is  a  wide  margin 
between the quantities reported as validated through FLEGT licences and quantities reported as 
cleared for import by customs. Reasons for the discrepancy is due to: license issued but products 
never  exported  to  the  EU,  variable  quality  of  national  datasets  submitted,  reclassification  of 
goods by customs to non-FLEGT HS codes, year-end trade where licences had been received but 
not yet cleared, or reporting of quantities in units of measure other than weight.  

Additional verification checks of licences and shipments  

CAs decide on the need for further verification of shipments using a risk-based approach (Article 
5(4)  of  FLEGT  Regulation).  Not  all  MS  have  provisions  in  place  to  undertake  additional 
verification  of  either  FLEGT  licences  or  physical  verification  of  FLEGT-licenced  shipments. 
Although the number of additional physical checks increased from 2017 to 2018, the number of 
checks fell significantly in 2019 (even though there was no concurrent reduction in the number of 
FLEGT licences received). 

3.2.3 

3.2.3 

Penalties and infringement cases  

Article  5(8)  of  the  FLEGT  Regulation  states that  "each  MS  shall  determine  the  penalties to  be 
imposed where the provisions of this Regulation are infringed; such penalties shall be effective, 
proportionate  and  dissuasive”.  As  of  2019,  various types  of  penalties  have  been  established  by 
the MS, including administrative fines (18 MS), criminal fines (15 MS), imprisonment (19 MS), 
suspension of authority to trade (9 MS), seizure (22 MS), notices (9 MS) and warning letters (5 
MS). In line with Article 5(7) of the FLEGT Regulation, the CAs may suspend the release of, or 
detain,  timber  products  where  they  have  reason  to  believe  that  the  FLEGT  licence  may  not  be 
valid. In 2018, 24 MS reported that their national legislation allowed for seizing and disposing of 
timber products found in breach of the Regulation.  

Infringement cases  

The Annual Synthesis Report also captures information on instances where penalties are applied 
and/or  licences  have  been  rejected.  Across  the  implementation  period,  these  have  been  applied 
infrequently: 

 

In  2016,  no  MS  applied  Article  6(1)  of  the  FLEGT  Regulation  or  issued  any  penalties 
being this was the first year of licensing (from 16 November). 

17 

 
 
 
 
 

 

 

In  2017,  107  FLEGT  licences  were  not  approved  across  11  MS  (around  60%  of  the 
rejected licenses were in Italy). Two MS reported applying Article 6(1) to four cases, all 
of which resulted in administrative penalties. One MS reported applying Article 6(2) due 
to an alleged forged licence. 
In  2018,  twelve  MS  rejected  a  total  of  66  FLEGT  licences,  with  the  largest  number  of 
rejected  licenses  reported  by  France  (20  licences).  Article  6(1)  was  applied  by  two  MS 
(Bulgaria  and  Spain)  and  while  the  number  of  licenses  rejected  is  not  available,  it 
concerned 29,130 kg of timber products. In 2018, in line with the requirements of Article 
6(2),  two  MS  (Bulgaria  and  the  Netherlands)  informed  the  Commission  that  the 
provisions  of  the  FLEGT  Regulation  were  being,  or  had  been,  circumvented.  One  case 
concerned a forged license, and another a shipment of endangered tree species without a 
CITES permit. 
In 2019, three MS reported application of Article 6(2), 56 FLEGT licences were rejected 
and Article 6(1) was applied by two MS. 

Based  on  the  available  data  for  the  years  2017  -  2019  there  were  more  than  25  000  licences 
received per year, with a proportion of reported licence issues below 1%. 

4. 

4. 

METHODOLOGY 

The evaluation process has followed the European Commission’s Better Regulation Guidelines54 
and assessed the  Regulations against five key evaluation criteria, elaborated through evaluation 
questions (EQ) set out in the Fitness Check Roadmap55. 

4.1 

4.1  Evaluation questions 

The evaluation questions that guided the assessment of the evaluation criteria are listed below.  

4.1.1 

4.1.1 

 Effectiveness 

  To what extent have the objectives been met? 
  What factors have contributed to or hindered their achievement? 
  What have been the (quantitative and qualitative) effects of the intervention? 
  What  have  been  the  unintended/unexpected  effects  of  the  intervention,  including  on 

trade? 

4.1.2 

4.1.2 

Efficiency 

  To what extent has the intervention been cost-effective? 
  How  proportionate  were  the  costs  of  the  intervention  borne  by  different  stakeholder 

groups taking into account the distribution of the associated benefits? 

  Are there opportunities to simplify the legislation or reduce unnecessary regulatory costs 

 

without undermining the intended objectives of the intervention? 
If there are significant differences in costs (or benefits) between Member States, what is 
causing them? How do these differences link to the intervention? 

4.1.3 

4.1.3 

Coherence 

  To what extent are the two  Regulations consistent and coherent internally and between 

themselves? 

54 https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-Regulation-why-and-how/better-Regulation-

guidelines-and-toolbox_en. 

55 https://ec.europa.eu/info/law/better-Regulation/have-your-say/initiatives/11630-Illegal-logging-evaluation-of-EU-rules-fitness-check-. 

18 

 
 
 
 
 
                                                      
  To what extent is the initiative coherent with other EU environmental policy objectives, 

in particular biodiversity? 

  To what extent is the initiative coherent with wider EU policy, including customs, trade 

and climate? 

4.1.4 

4.1.4 

Relevance 

  To what extent is the intervention/initiative still relevant? 
  To what extent have the (original) objectives of the intervention (still) correspond to the 

needs within the EU? 

  Has the initiative been flexible enough to respond to new issues? 

4.1.5 

4.1.5 

EU Added Value 

  What is the European added value of the initiative/intervention compared to what could 
have been achieved by Member States at national and/or regional levels in its absence?  
  To  what  extent  does  the  initiative  comply  with  the  principles  of  subsidiarity  and 

proportionality?  

4.2 

4.2  Process 

The  evidence  for  the  evaluation  was  gathered  via  a  combination  of  desk-based  research  and 
engagement  with  stakeholders  via  a  number  of  different  routes  with  support  of  an  external 
contractor56: 

  Desk  research:  Extensive  literature  review  has  been  conducted  involving  an  in-depth 
review of a range of sources, including: current work being undertaken by project partners; 
reports and other evidence signposted by the Commission; official documents published by 
the Commission; reports from previous pan-European and national level studies; scientific 
articles; position  papers;  meeting  proceedings and legal texts.  In  total  over 460 literature 
and data sources have been reviewed. Desk research also involved collection and analysis 
of quantitative data, namely reviewing what data is available around illegal logging from 
various  sources,  and  also  analysis  of  deforestation  data  from  FAO  and  trade  data  (EU 
Comext); 

  Online  Public  Consultation  (OPC):  Launched  in  all  official  EU  languages  on  the 
Commission’s  website  on  3  September  2020  and  open  for  12  weeks,  concluding  on  26 
November 2020. There were 175 responses to the OPC, alongside 29 attachments; 

  Targeted stakeholder interviews: 11 telephone interviews  to gather more in-depth views 
from  selected  key  stakeholders  (Commission services,  MS  CAs,  businesses,  NGOs,  non-
EU country governments); 

  Stakeholder meetings: Two stakeholder workshops were held, both as virtual events. The 
first  in  September  2020  comprised  part  of  a  EUTR/FLEGT  Regulation  Expert  Group 
meeting where several in-depth questions were discussed with the MS CAs. The second in 
December  2020  coincided  with  the  ‘Multi-Stakeholder  Platform  on  Protecting  and 
Restoring the World’s Forests, including the EUTR and FLEGT Regulation’ and discussed 
a targeted set of questions with a broader range of stakeholders. 

56 Support the study for a Fitness Check of the EUTR and FLEGT Regulation, 2021, [ongoing study in support to the Fitness check, to 

be published with adoption of the Fitness check – the latest draft submitted as part of the RSB package]. 

19 

 
 
 
 
                                                      
A stakeholder synopsis report with more detailed assessment of the above consultation activities 
is provided in Annex 2 and Annex 3. 

4.3 

4.3  Challenges and the robustness of findings  

There were a number of challenges and data gaps encountered during the evaluation and where 
appropriate action was taken to limit their impact. The main limitations are related to: (i) the lack 
of robust and comprehensive (both in terms of time series and geography) data regarding levels 
of illegal logging and illegally logged timber being out on the EU market and (ii) data concerning 
the costs of implementation for all stakeholders. This has limited the ability to fully appraise the 
effectiveness  and  efficiency  of  the  Regulations  and  to  compare  costs  and  benefits  directly.  As 
comprehensive data are not available due to the character of the initiative, case studies have been 
carried out to support the assessment.  

Despite  these  limitations, the triangulation  of  different  data  sources  has  helped to  elaborate the 
conclusions  drawn  from  the  evidence  base  for  each  evaluation  criterion.  When  triangulating,  a 
key  step  has  been  to  consider  the  strength,  reliability  and  robustness  of  different  sources 
available.  As  regards  stakeholders  opinions,  the  number  of  stakeholders,  their  background  and 
consensus (or not) across the different stakeholders groups was considered. Despite the identified 
limitations, the triangulation thus allows to achieve a good degree of confidence in conclusions. 
(For more see Annex 3) 

5. 

5. 

ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS 

Section 4.1 provides a list of questions that guided the evaluation of the EUTR and FLEGT. As 
answers  to  some  of  these  questions  inevitably  overlap,  to  avoid  repetitions  the  below  section 
provides answers rather by criteria than by the individual questions.   

5.1 

5.1  Effectiveness 

EUTR  

There is mixed evidence regarding the impact of the EUTR on illegal logging (in the EU and in 
third countries) and the placing of illegally harvested timber to the EU market, with both positive 
and negative signals. 

The  EUTR  has  shown  results  in  terms  of  an  improved  situation  in  third  countries,  including 
countries  that  have  chosen  not  to  engage  in  VPA  processes,  as  amongst  them  main  EU  trade 
partners (e.g.  Brazil,  Russia,  and  Ukraine) that  have  taken  steps to strengthen  their  governance 
systems and reduce illegal logging to meet the requirements of the EUTR.  

According to  the EUTR Article 10, MS CAs shall  develop a risk-based inspection plan for the 
enforcement of the regulation. In MS where the CAs have had no access to national customs data 
due  to  lack  of  cooperation  and  exchange  of  information  between  the  CAs  and  customs 
authorities, implementation of Article 10 has been a challenge and has limited the effectiveness 
of  inspections  on  importers.  This  is  especially  problematic  regarding  import  from  high  risk 
countries  and  big  import  volume.  The  lack  of  cooperation  between  national  authorities  and,  as 
follows,  between  MS  could  have  been  minimised  through  the  regulatory  design.  Other  risk 
parameters  than  those  from  customs  data  and  used  by  the  authorities  are  e.g.  wood  species, 
corruption and low governance in the forest sector and the value of the commodities. Regarding 
these  risk  parameters  and  others  the  CAs  have  exchanged  knowledge  and  risk  data  and 
cooperated to improve the effectiveness of the inspections. This might be one of the reasons why 
the  EUTR  is  seen  by  stakeholders  as  a  step  forward  in  tackling  illegal  logging  and  associated 
trade. The OPC gathered feedback on the positive consequences of the EUTR where 60% of the 
respondents  (n=165)  across  the  different  stakeholder  groups  considered  that  the  EUTR  had  at 
least moderate to very significant influence on increased reforms in timber-producing countries 

20 

 
 
 
aiming to achieve a higher level of transparency. 72% (n=165) considered that the EUTR at least 
moderately encouraged investments in clean and transparent supply chains. A total of 40% of the 
respondents (n=167) to the OPC57 consider that the EUTR has had either a significant or a very 
significant  impact  in  reducing  the  amount  of  illegally  harvested  and  traded  timber  products 
placed  on  the  EU  market  and  in  addition  53%  of  the  respondents  (n=167)  consider  it  had  a 
moderate or slight impact.  

Figure  5-1:  Feedback  to  the  OPC  regarding  the  contribution  of  the  due  diligence  obligation  in  preventing  the 
placement of illegally harvested timber and derived products in the EU Single Market (source: OPC survey) 

A  majority  of  respondents  think  that  EUTR  had  at  least  a  moderate  effect  on  reducing  illegal 
logging. 

The  trade  data  presents  a  mixed  picture.  A  difference  in  difference  analysis  of  trade  data  was 
performed58 to estimate the impacts of the EUTR on imports of illegally harvested timber to the 
EU.  It  builds  on  import  statistics  comparing  products  from  ‘low’  and  ‘high’ risk  countries,  and 
changes before and after the entry into force of the EUTR. Two different control groups are used 
to compare actual trends: A group of comparable countries who do not have in place a legality 
control system, and the products that are not covered by the EUTR but belong to the same HS 
groups of the EUTR scope. The analysis tentatively concluded that the EUTR may have led to a 
reduction in imports of illegally harvested timber imports to the EU of between 12-29%.  

That  said,  imports  from  countries  where  issues  were  specifically  identified  (Ukraine  and 
Myanmar) continued and actually grew, and China has become a prominent player in the timber 
industry,  elongating  (and  therefore  complicating  the  collection  of  information  around)  supply 
chains.  With  respect  to  ‘domestic’,  EU-based  producers  of  timber,  in  countries  where  there  is 
greater  risk  of  illegal  logging  (Romania  and  Bulgaria),  there  appears  to  have  been  an 
improvement  in  forest  area,  but  the  added  value  of  the  EUTR  above  that  delivered  by  existing 
legislation is questionable. 

When looking into the factors that influence effectiveness of the EUTR, the MS CAs provided the 
following insights during the consultation process59: 

  Current provisions of the EUTR are not sufficient to ensure operators and CAs can 

effectively assess risks. 

  Successful prosecutions are needed to demonstrate enforcement of EUTR, but only the 

strongest cases may be taken to police or discussed with prosecutors. 

  Weak enforcement capacity and lack of resources.  
  Demands from prosecutors may also be hard for CAs to meet. 
  Clear breach of EUTR is difficult to prove in court. 
  DDS obligation is complex and time-consuming, especially for those not specialized in 

wood products. 

57 The Online Public Consultation (OPC) findings and participating stakeholders are presented in detail in Annex 2. 
58 The full analysis can be consulted in  Annex C (difference-in-difference analysis) of the ‘Support study for a Fitness Check of the 
EUTR and FLEGT Regulation’ 

59 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=47622. 

21 

 
 
 
                                                      
  Often hard to find detailed information on the origin of timber (source countries, 

exporter, concession). 

  Term ‘negligible risk’ is subjective – operators can have a different view to CAs. 
  Difficult for economic operators to take sufficient action when there is a ‘large’ (not 

negligible) risk. 

  Operators prefer to collect more documents from existing suppliers to their DD instead of 

finding new suppliers with negligible risk products. 

Requirements  of  improved  transparency  and  information  to  fulfil  the  DD  obligations  have  put 
pressure  on  all actors  along  the  supply  chains including  a  number  of  challenges  e.g.  corruption 
which have held back progress towards the main goal to halt illegal logging. Critical challenges 
have  also  been identified in  both  the  practical  functioning  of  the  DD  requirements,  and  lack  of 
adequate implementation of DD.  

The EUTR – in particular in the eyes of most respondents with an opinion - is considered to have 
achieved  some  level  of  success  through  the  application  of  DD  to  the  majority  of  timber  and 
timber  products  placed  on  the  EU  market.  Nevertheless,  the  application  of  DD  has  not  been 
universal and there has been no significant effect on the volume of timber from known high-risk 
sources,  which  continue  to  be  placed  on  the  EU  market.  Especially  smaller  operators  face  a 
number of challenges to putting DDS in place. One is limited awareness and understanding of the 
obligations. In a targeted interview, several EUTR CAs commented that DD requirements are too 
complex  and  resource-intensive  for  SMEs,  leading  to  improper  implementation  of  DDS.  The 
most critical issue for operators is the ability to verify the robustness of information obtained and 
this may lead SMEs to change from being importers to start sourcing from within the EU.  

Figure  5-2:  Feedback  to  the  OPC  regarding  potential  changes  in  their  operations  to  comply  with  EUTR  (source: 
OPC survey) 

Consultation of stakeholders and results of the literature review as referred to above suggest that 
the use of the concept of ‘negligible risk’ in the DD provisions of the EUTR has been a further 
challenge  for  the  implementation  and  enforcement  (discussed  in  more  detail  in  section  5.3 
Coherence).  The  term  is  subjective,  which  influences  the  gathering  and  interpretation  of 
information that is provided to prove that a risk is ‘negligible’ for operators, CAs and the courts. 
This issue is compounded by the relatively short history of DD as a concept in the legal system of 
many MS. In consequence, the difficulty of challenging inadequate DD in court has led to some 
hesitations in bringing cases to court, as also reported in section 3.  

While  all  MS  have  established  legislative  frameworks  to  implement  the  EUTR60,  the  level  to 
which the national provisions provide for enforcement differs. One reason is that the human and 
financial  resources  available  to  CAs  vary  substantially  across  MS61.  Resources  dedicated  to 
imported and domestic timber were typically reported together. As also discussed in section 3.3.1, 
combined human resources ranged from 0.125 Full-Time Equivalent (FTE) staff in Luxembourg, 
to  as  many  as  601  FTE  staff  in  Italy  –  however  the  latter  may  also  include  police,  customs 
personal  or  other  supporting  staff  (note  that  the  size  of  the  MS  or  volume  of  trade  did  not 

60 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018DC0668&from=EN, Biennial report for the period March 

2015 - February 2017 (15.10.2018). 

61  European  Commission.  (2018,  06  19).  Summary  record  of  the  19th  FLEGT/EUTR  Expert  Group  Meeting.  Retrieved  from 

https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=32789. 

22 

 
 
 
 
 
                                                      
determine the allocated FTE). Another reason is that – as in the case of most EU legislation - the 
establishment  and  definition  of  sanctions  (see  section  3.3.3.)  is  left  to  EU  MS  and  operators 
clearly see a variation in the stringency with which the EUTR is enforced across MS, which may 
lead to observed attempts to import timber from high risk sources via specific MS.  

Overall, a significant proportion of the checks resulted in penalties: between 10% and 50% of the 
checks in most countries in 2017-2018. In Austria and Belgium all checks on importing operators 
resulted in penalties and in Hungary this was the case for both importing and domestic operators. 
This may indicate good application of the risk-based criteria but may also show a very high level 
of  non-compliance  in  some  countries,  therefore  suggesting  that  DD  has  not  been  effectively 
implemented  by  operators.  There  are  also  important  differences  of  understanding  and 
interpretation in different MS and conditions in the implementation of the regulation. 

Lack  of  exchange  of  data  between  MS  CAs  and  national  customs  has  also  hampered 
implementation and enforcement in some MS. The effectiveness of some CAs’ checks has been 
compromised by the lack of formalised cooperation with customs. In some cases, in the absence 
of specific enabling provisions, customs refuse sharing customs data with their national CAs (27th 
FLEGT/EURT expert Group meeting 19. February 2020). Without a complete set of basic data on 
all operators and their related import of timber and wood products, an effective and efficient risk 
analysis is not possible and inspections are highly complicated. 

With  regards  to  the  product  scope,  there  should  be  a  good  balance  between  covering  enough 
timber  and  timber  products  to  have  an  effect  on  the  total  volume  of  wood  products  and  not 
affecting  the  efficiency  of  monitoring  and  enforcement  of  operators’  obligations  (see  also 
discussion  in  section  5.4  Relevance).  The  Annex  of  the  EUTR  -  listing  timber  and  timber 
products covered by the Regulation - has been criticized for not covering certain product types, 
particularly printed material, packaging and some furniture items62. As such, significant volumes 
of  such  products  continue  to  be  imported  to  the  EU,  meaning  illegally  harvested  timber  is 
prevalent  in  the  internal  market,  including  in  the  form  of  books,  magazines  and  newspapers 
(Levashova, 2012)63, (WWF, 2016)64. According to recent consultation by the Commission65 and 
a report by COWI (Cowi A/S, Indufor and Milieu, 2019)66, many stakeholders did not consider 
the product scope of the EUTR as optimal, and felt that more timber products should be included 
(European Commission, 2017). Recent research estimates that 92% of the total amount of Round 
Wood Equivalents (RWE) are covered by the EUTR67.  

Monitoring Organisations (MOs) have not functioned as expected at the time of adoption of the 
EUTR. MOs appear to have been used by operators to a limited extend for a number of reasons, 
including concerns by operators of being exposed if in breach with EUTR, due to the  fact that 
MOs are obliged to notify CAs of significant or repeated failures by the operator as well as the 
cost  of  their  service.  There  were  also  several  cases  where  compliance  with  the  EUTR  was 
problematic even while using MOs services. One issue highlighted by operators in regard to MOs 
is  that  they  are  often  hired  as  consultants  by  operators  as  a  way  to  tackle  the  ‘complexity  of 
complying with the legislation’ (UNEP-WCMC, 2019). This can be seen as a potential conflict of 
interest, as MOs may already be involved in the timber trade and can apply insider knowledge to 
steer risk assessments and inspection outcomes68.  

In addition, the recognition process  can be slow, heavy and resources-intensive for both the EC 
and applicants, while the regulation shows limited flexibility to respond in cases of problem and 
challenges. 

62 IEEP (2020). An EU Green Deal for trade policy: Aligning trade with climate and sustainable development objectives. 
63 https://onlinelibrary.wiley.com/doi/full/10.1111/j.1467-9388.2011.00725.x. 
64 http://awsassets.panda.org/downloads/wwf_position_paper_eutr_product_scope.pdf. 
65 https://ec.europa.eu/info/consultations/public-consultation-product-scope-eu-timber-regulation_en. 
66 Cowi A/S, Indufor and Milieu. (2019). Impact Assessment study for the revision of the product scope of the EU timber regulation. 
67 https://www.econstor.eu/bitstream/10419/117298/1/834452723.pdf. 
68  Leipold, S. (2016). How to move companies to source responsibly?  German implementation of the European Timber Regulation 

between persuasion and coercion. Forest Policy and Economics, 41-5. 

23 

 
 
                                                      
However,  the  EUTR  legislation  has  inspired  the  development  of  legislation  in  other  non-EU 
countries  (e.g.  Australia,  South  Korea,  Japan  and  China  amended  their  Forest  Law  in  2019  to 
include a ban on buying, processing and transporting of illegal timber69), although any subsequent 
impact  relies  on  the  effectiveness  of  these  policies.  That  said,  there  are  continuing  reports  of 
significant  illegal  activity  in  some  of  the  EU’s  key  sources  of  imports  such  as  Brazil,  Russia, 
Ukraine, Myanmar or a number of African countries.  

Box 2: The examples of Myanmar and Ukraine 

Myanmar represents a complex challenge to EUTR implementation, with a unique structure of 
forest management and governance. Considering the combination of a high level of corruption, in 
particular in the context of forestry, the exclusive forest ownership by the State and management 
by the State-owned enterprise MTE of all natural forests, and the high value of teak grown in the 
wild,  Myanmar  remains  a  high  risk  country  of  harvest.  In  2015,  Myanmar’s  export  of  EUTR-
regulated products totalled 684.2 million kg, of which 0.63% was exported to the EU-2870. The 
FLEGT-EUTR Expert Group - since its meeting on 20 September 2017 - upholds its opinion that 
for timber from Myanmar the risk of illegal harvest is non-negligible and as long as no negligible 
risk assessment can be confirmed, operators should refrain from putting teak from  Myanmar on 
the EU market71,72,73. Nonetheless, the import from Myanmar has more than doubled since 201474 
-  despite  a  country  overview75  describing  Myanmar’s  problems,  the  Country  conclusion76  from 
the  Expert  Group  stating  that  negligible  risk  is  almost  impossible  to  reach  and  court  cases  in 
several MS against operators importing teak from Myanmar.   

Ukraine is a main exporter to the EU, exporting EUTR covered products worth of 10.16 bn Euro 
in  2019.  Still,  its  forest  sector  is  a  challenge  for  EU  operators  due  to  the  high  risk  of  illegal 
logging,  corruption  and  conflict  of interest  between  the  State  Forest  Resources  Agency  and  the 
forest  inspection  system.  On  9  December  2020,  the  FLEGT-EUTR  Expert  Group  adopted  the 
country conclusion on Ukraine77 stating a very high risk for import from Ukraine to be in breach 
with  applicable  legislation  and  that  risk  mitigating  is  highly  problematic.  In  the  Association 
Agreement  between  Ukraine  and  the  EU  (27  June  201478)  it  was  agreed  (Article  294)  that  “In 
order  to  promote  the  sustainable  management  of  forest  resources,  Parties  commit  to  work 
together  to  improve  forest  law  enforcement  and  governance  and  promote  trade  in  legal  and 
sustainable forest products.”. In the following Trade and Sustainable Development (TSD) Sub- 
Committee,  dedicated  to  the  implementation  of  the TSD Chapter  of  the Ukraine,  both  parties 
agreed  that  a  system  for  a  robust  forest  control  and  inspection  body/ies  should  be  independent 
from  the  State  Forest  Resources  Agency  and  wood  harvesting  activities  and  that  it  should  be 
referred  to  the  Ministry  for  Environmental  Protection  and  Natural  Resources79.  The  EUTR,  in 
combination with the TSD meetings, seems to be moving Ukraine in the direction of improved 
forest management and legality.  

One  area  where  stakeholders  consider  that  the  EUTR  has  led  to  a  positive  change  is  in 
transparency and the availability of information and documentation  on timber supply chains (in 
particular  regarding  species  and  origin).  This  has  put  pressure  on  the  supply  chains  to  ensure 
legality  of  the  raw  materials  of  wood  based  products  being  placed  on  the  EU  market.  Several 

69 LawinfoChina. (2019). Retrieved from 

http://lawinfochina.com/display.aspx?id=31900&lib=law&SearchKeyword=&SearchCKeyword= 

Lawson, S., & MacFaul, L. (2010). Illegal logging and related trade: indicators of the global response. London, UK: Chatham House. 
70 https://ec.europa.eu/environment/forests/pdf/Country_overview_Myanmar_25_10_2018.pdf. 
71 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetailDoc&id=39219&no=13. 
72 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=32789. 
73 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=34250. 
74 https://app.powerbi.com/view?r=eyJrIjoiYzQ2N2U5MWEtMjE3MS00NzBlLTg0M2EtYTNjM2FlOTQ0ZWExIiwidCI6IjJmYWFi

ODU4LWQxZjQtNDhhZi04NmY2LTQ4NjE5NmQ1OTY5ZCIsImMiOjh9. 

75 https://ec.europa.eu/environment/forests/pdf/Country_overview_Myanmar_25_10_2018.pdf. 
76 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=47575. 
77 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeeting&meetingId=23097. 
78 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22014A0529(01)&from=EN. 
79 https://trade.ec.europa.eu/doclib/docs/2020/october/tradoc_159004.pdf. 

24 

 
 
 
                                                      
organisations  provided  further  detail  in  position  papers,  stating  that  the  EUTR  contributed  to 
increased  supply  chain  transparency  and  the  availability  of  documents  from  suppliers  but  key 
issues remained (see also section 5.2). 

Figure  5-3  Development  of  value  of  EU28  imports  of  EUTR-regulated  wood-based  products  the  top  10  exporting 
countries (Source: EuroStat ComExt) 

FLEGT Regulation 

The objectives of the FLEGT Regulation have been met to a limited extent. More than 15 years 
after  the  entry  into  force  of  the  FLEGT  Regulation,  the  EU  has  signed  or  is  in  the  process  of 
negotiations  for  a  VPA  with  15  countries  in  total  (see  section  3.1),  with  only  one  of  them 
(Indonesia) being among the top 10 EU trading partners. Out of the 8 countries that have signed a 
VPA, currently only Indonesia has an operating FLEGT licensing system in place, verifying the 
legality of timber and timber products exported to the EU. Furthermore,  only a relatively small 
part of the EU wood-based product imports originates from VPA countries (9% of total import 
value),  while the  part  of  EU  imports  from  Indonesia is even  smaller (3%). Therefore, it  can  be 
concluded that the VPAs have only had a limited impact on preventing illegal timber from being 
placed  on  the  EU  market,  and/or  reducing  illegal  logging  globally.  There  is  some  evidence 
(stakeholders, selected reports) of a reduction in illegal logging activities in countries engaged in 
VPAs in some cases, however this is predominantly based on stakeholders’ views. 

Figure 5-4 Development of value of EU28 imports of EUTR-regulated wood-based products from different 
country categories80 compared to 2007 (Data series indexed to 2007=100) (source: Eurostat) 

80 Non-VPA countries include also Russia, Ukraine, Brazil, US and China. 

25 

 
 
 
 
 
 
 
                                                      
 A number of factors have prevented VPAs from having the intended effect with regard to the full 
implementation  of  the  FLEGT  Regulation.  Negotiating,  concluding  and  implementing  VPAs 
proved  to  be  a  long  and  complex  process.  Such  processes  are  fraught  with  challenges  in  many 
partner countries such as the required high standards of a TLAS (weak overall governance, lack 
of  institutional  capacity,  absence  of  political  willingness,  often  widespread  corruption), 
difficulties  in  gaining  agreement  from  multiple  regions  in  partner  countries,  insufficiently 
effective  measures  and  weak  law  enforcement  (resulting  in  illegalities  throughout  the  supply 
chain and sustained illegal logging activities81). It might even add to the hampered delivery that 
while  the  export  of  timber  from  the  VPA  countries  has  shifted  from  the  EU  to  China  the  EU 
continues to finance domestic stakeholder activities as long as the VPA process is still ongoing. It 
should be noted that most of the  VPA countries continue to  be considered as  presenting a  high 
risk and in many cases deforestation has continued apace with no sign of meaningful decrease. 

Many  important  exporters  to  the  EU,  which  are  considered  to  be  high-risk  countries  regarding 
illegal logging, have never shown interest in engaging in the VPA process, e.g. Russia, Ukraine 
and  Brazil.  The  desk  research  and  consultation  of  stakeholders  suggest  that  there  are  several 
aspects that may have held back key export countries from engaging in the VPA process such as: 
a perception that VPAs are designed solely for developing tropical countries, a ‘demand-driven’ 
approach for the  selection of partner countries, doubts about the economic benefits of  VPAs in 
terms  of  greater  EU  market  access,  and the  potential reputational  damage  of  withdrawing  from 
negotiations  once  started.  The  example  of  Thailand  illustrates  further  the  risk  of  incentives  of 
third countries to enter into VPA negotiations (Box 3). 

Box 3: The example of Thailand 

Thailand exports only 3% of its wood and wood products to the EU – and the full amount of Thai 
exports  from  those  categories  are  about  1%  of  Thai’s  global  exports  for  all services 
and products.  

As  in  the  case  of  Thailand  often  the  VPAs are  therefore trade  treaties whose  relevance,  in 
economic terms, is negligible for both the EU and the partner country. In these conditions, there 
is  little  incentive  for  partner  countries  to give  in  to  EU  demands  for  stricter  legality  controls, 
governance  and  protection  of  forests.  At  the  same  time  the  EU  accompanies  the  VPA 
negotiations and the implementation processes with cooperation funds. Those funds may be and 
in  some  cases  most  likely  are  the  main  motivation  for  partner  countries  to  engage  in  the 
processes and keeping them running.  

There  is  often  confusion  about  the  status  of  VPA  countries  that  are  in  the  stage  of 
implementation, but have no operational FLEGT licencing system. This creates uncertainty how 
imports from these countries are treated under the EUTR. Furthermore, even when a country has 
concluded  a  VPA  with  the  EU,  but  has  not  yet  moved  to  an  operational  TLAS,  the  quality  of 
information made available to operators as a basis for conducting DD may not necessarily be as 

81 As presented in Annex A regarding the illegal logging activities in individual countries. 

26 

 
 
 
 
 
                                                      
good as one could expect from a partner country that has been through the arduous negotiation 
process. Conflicting information on timber legality risks and progress under the VPA might make 
it  difficult  for  operators  to  interpret  the  information  and  documentation  provided,  when 
performing  their  DD  obligation82.  Operators  and  CAs  need  to  understand  the  VPA  in  the 
individual  country  of  harvest,  what  parts  of  the  VPA  have  been  implemented  and  what  is  still 
under development. MS CAs are of the view that sometimes acquiring information from countries 
that  negotiate  or  implement  VPAs,  but  have  not  yet  started  to  issue  FLEGT  licenses,  is  more 
difficult than acquiring it for non-VPA countries. Regarding the process of putting VPAs in place, 
they noted that VPAs help with gaining an overview of legislation to be used in the DD but the 
listing  of  criteria  and  indicators  often  makes  it  even  more  difficult83,  and  although  it  involves 
governments  and  civil  society,  it  does  not  necessarily  lower  the  risks.  It  is  furthermore  unclear 
how timber from VPA countries in advanced pre-licencing state should be dealt with84. 

On the other side, a decrease in overall trade volumes for the VPA countries after the EUTR came 
into force, indicates that the stricter legality requirements could have been a factor.  

Figure 5-5 Development of export value from VPA-signatory countries - to the EU and all other countries 
(2007=100) (source: Eurostat ext_go_detail, Comtrade) 

Indonesia started to issue FLEGT licences in 2016 and many elements of the  system have been 
implemented successfully. The processes for the issuance of licences are reported to be operating 
as  intended  in  the  VPA.  From  a  process  perspective,  many  elements  of  licencing  have  been 
implemented  successfully  both  by  Indonesia  and  EU  MS,  and  processes  and  systems  are 
continuously  updated  and  improved.  The  level  of  exports  from  Indonesia  to  the  EU  has  risen 
since  licencing  commenced  (although  less  so  than  overall  imports  to  the  EU).  Remaining 
challenges are addressed as they arise. 

Additional implementation challenges might be expected should further VPA partners progress to 
licencing,  although  a  great  amount  of  learning  can  be  drawn  from  the  Indonesian  experience. 
Issues  like  “typos”  in  licenses,  and  mismatching  information  between  the  licence  and  customs 
documents have been experienced and efforts have been taken from both the EU and Indonesian 
side to resolve them. Nevertheless, experience with Indonesia has also highlighted that even when 
fully operational, VPAs are still fragile to political will (see Box 4).  

Box 4: the example of Indonesia 

On  3  March  2020,  the  Indonesian  Ministry  of  Economic  Affairs  announced  a  number  of 
measures  as  a  Covid-19  trade  stimulus  strategy.  These  measures  included  –  inter  alia  – 
Regulation 15/2020 of the Ministry of Trade, which provided for the lifting of the obligation of 
so-called  V-Legal  documents  (i.e.  the  export  license  attesting  legality)  as  part  of  the 

82https://ec.europa.eu/transparency/expertgroupsregister/screen/meetings/consult?lang=en&meetingId=19770&fromExpertGroups=tre 
83 https://eur-lex.europa.eu/resource.html?uri=cellar:b2424ac4-7ea6-11e8-ac6a-01aa75ed71a1.0001.02/DOC_2&format=PDF. 
84 https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=47622. 

27 

 
 
 
 
 
 
                                                      
requirements for the export of forestry products, unless required by the exporter. This measure 
was going to enter into force on 27 May 2020. 

This decree was going to change the system of TLAS, as agreed and laid down in the VPA, as it 
would  no longer cover  all exported timber  products, as  stipulated in  Article  10(1)  of  the  VPA 
and thus would generate a general risk that illegal timber and timber products are exported from 
Indonesia. Furthermore, this decree was adopted without prior consultation of the EU. Therefore, 
it would constitute a breach of Indonesia’s commitments entered into under the VPA. 

The decree was eventually revoked by the Indonesian government, following intense diplomatic 
actions by the EU, while preparing for the suspension of the VPA at the same time, which, had it 
been necessary, would not have been possible to be enacted in time to avoid  potentially illegal 
timber  covered  by  FLEGT  licences  being  placed  on  the  EU  market,  given  the  heavy 
administrative procedure. 

There is evidence of VPA partner countries taking steps in the right direction and putting in place 
the  foundations  for  improvements  in  the  future,  i.e.  concerning  governance,  civil  society 
participation,  clarifications  around  existing  definitions  and  legislation.  The  SILK  database  for 
Indonesia  shows that  from  2013  there  was improvement  in  operator  compliance  as  expected in 
advance  of  FLEGT  licensing.  Despite  the  overall  effect  of  the  licensing  system  in  preventing 
illegal timber entering the EU, the effect of the FLEGT regulation has been limited, with only one 
country  issuing  FLEGT  licences  and  no  evidence  that  the  VPAs  have  contributed  to  reduced 
illegal logging. 

Furthermore,  illegal  timber  trade  has  remained  persistent  at  a  global  level  since  the  FLEGT 
Regulation was initiated in terms of geographic location (Russia, Brazil, Indonesia and Malaysia), 
driven  by  high  profits  and  forest  conversion.  Despite  reductions  in  the  production  and  import 
shares of illegal wood products in some major producer and consumer countries85, illegal logging 
and timber trade at the global level remains persistent. Timber from illegal forest conversion for 
commercial agriculture has become an increasingly large proportion of global illegal logging and 
related timber trade, whereas the role of traditional, large scale logging has diminished. There is 
also a continuing perception that nearly a third of timber from the 15 VPA countries is illegal82. 

The  main  problem  drivers in  many  partner  countries are  weak  governance, absence  of political 
will  and  lack  of  economic  incentives,  as  explained  under  section  1.  The  VPA  processes  as 
designed by the EU provide funding to establish participatory forest governance processes, but do 
not  address  the  economic  drivers  of  illegal  logging  in  the  forest  sector,  nor  the  underlying 
corruption  in  the  administrations  and  at  the  political  levels  that  are  benefitting  from  illegal 
logging.  These  factors  prevented  VPA  processes  from  creating  the  expected  improved 
transparency in all financial transactions related to the forest industry, the processing industries 
directly linked to it and the export volumes of goods sourced from forests. A common challenge 
in VPA processes beyond the EU´s reach has also been frequent change in governments (in some 
cases even from a democracy to a non-democratic regime), where often almost all previous effort 
is lost.  

Effectiveness of EUTR and FLEGT Regulation 

While there are tangible signals that both Regulations together have been moderately successful 
in their aim to prohibit the placement of illegally logged timber on the EU market, it is difficult to 
conclude (based on the data available) that they have had a  significant  effect on illegal logging 
globally.  Usually,  overall  performance  is  difficult  to  quantify  with  certainty,  but  it  is  clear  that 
this objective has not been achieved. 

Figure  5-6:  Feedback  to  the  OPC  regarding  the  impact  of  the  implementation  of  the  EUTR  and  FLEGT  Regulation  to 
reducing illegal logging and associated trade (source: OPC survey) 

85 Kleinschmit, D., Mansourian, S., Wildburger, C., & Purrett, A. (2016).  Illegal  Logging and Related Timber Trade  - Dimensions, 

Drivers, Impacts and Responses: A Global Scientific Rapid Response Assessment Report. IUFRO. 

28 

 
 
 
                                                      
The main driving factors that affect the effectiveness of both Regulations are  

i) 

ii) 

iii) 

iv) 

the  design  of  the  regulations  (including  the  wording  “negligible  risk”,  lack  of 
enforcement  powers,  lack  of  awareness  and  the  possibilities  for  operators  to 
circumvent the rules);  

different levels and efforts of implementation by MS;  

lack of political will or prioritisation in third countries; as well as  

other external factors e.g. changes in world trade.   

With  regard  to  the  EUTR,  one  can  point  to  the  difficulties  in  prosecution  and  conviction  of 
contravening  operators,  due  to  mentioned  gaps  in  effectiveness.  This  has  meant  that  operators 
that are sourcing and placing on the EU market products with the risk of having been harvested 
illegally  have  not  always  been  facing  legal  consequences  for  contravening  the  EUTR.  The 
EUTRs DD requirement was not formulated clearly enough to be fully understood by operators 
nor the courts, or to facilitate the prosecution and conviction of operators for failing to mitigate 
the risk to a “negligible” level. The varying levels of governance in specific exporting countries 
and  regions  add  to  the  complexity  and  make  the  enforcement  of  the  Regulation  in  EU  MS 
difficult. It has been additionally hampered by the absence of data sharing between customs and 
CAs for inspection purposes and lack of enforcement capacity to prevent sales if the CA finds the 
risk of illegality has not been mitigated to a negligible level.  

For the FLEGT Regulation, the effectiveness of its main instrument, the VPAs, has suffered from 
a high focus on process (strengthening governance elements such as stakeholders’ participation, 
etc.)  to  the  detriment  of the  main  objective:  stopping  illegal logging  and  associated trade. This 
may  have  led  to  disincentives  for  VPA  countries  to  bring  the  preparatory  processes  to  an  end, 
since  they  continue  to  receive  the  EU  economic  support  for  activities  while  at  the  same  time 
selling the majority of their timber to less discerning markets, such as China. 

5.2 

5.2  Efficiency 

Costs of EUTR 

The EUTR brings compliance costs for operators linked to the establishment and operation of the 
DDS.  

Costs are only significant for operators importing timber and timber products from third countries 
known for the risk of illegal logging. Domestic operators are forest owners and contractors who 
are already obliged to comply with applicable national laws for harvest operations and therefore 
compliance with the EUTR does not add significant, if any costs for them. The claims by some 

29 

 
 
 
 
stakeholders  that  EUTR  costs  for  forest  owners  are  non-zero  have  not  been  substantiated  in 
relation to EUTR obligations and may be related to national laws going beyond the obligations in 
EUTR.  

The  magnitude  of  costs  for  importing  operators  depends  on  a  range  of  factors,  including  the 
existence of previous responsible sourcing policies, country of harvest, number of products and 
suppliers,  the  length  (and  complexity)  of  supply  chains,  availability  of  existing  supplier 
information, etc. The larger the number of products or suppliers, the higher the costs. Indeed, the 
size of the operator may be correlated with the number of products or suppliers, but importantly it 
is the latter factor  which will  drive  the  costs.  Furthermore,  the  more  complex or  longer  supply 
chains  are  and  the  lower  the  level  of  information  available  initially  is,  the  higher  costs  will 
normally be.  

Four  available  EUTR  cost  surveys  have  been  used  to  estimate  costs  for  importing  operators. 
While generally operators recognised that EUTR had created additional obligations, burden and 
bureaucracy, the surveys also show that a significant proportion of respondents (53% (n=15) in 
the case of GTF survey in 201586, 36% (n=84) in case of WCMC in 201987) suggested that EUTR 
implied  no  additional  costs.  The  main  reasons  given  are  that  some  operators  had  already 
established  responsible  sourcing  policies  before  EUTR  adoption,  and  therefore  the  additional 
costs brought by the adoption of the EUTR were not significant.  

For those importing operators incurring additional costs as a result of the EUTR, the answers of a 
sample of operators engaged in the 2016 evaluation (European Commission, 2016) suggested that 
costs  had  been  manageable.  The  four  available  cost  surveys  report  comparable  estimates  of 
annual  costs  per  operator,  which  range  from  thousands  of  EUR  to  more  typically  tenths  of 
thousands of EUR and in case of some larger companies, hundreds of thousands of EUR.  

Feedback  from  EUTR  monitoring  organisations  gathered  through  a  previous  study88  confirmed 
large  variations  in  costs,  but  within  the  same  order  of  magnitude  as  estimated  in  the  existing 
surveys. Importantly, the majority of SMEs use existing staff to operate the DDS, which points in 
the direction of manageable costs.  

The  available  information  is  therefore  complex  to  interpret.  Key  elements  of  uncertainty  are 
summarised below: 

  All  surveys  rely  on  samples  of  small  size,  e.g.  between  3  and  84  respondents.  The  latest 
source (Norman,  2021)  does  not clearly  state the  number  of respondents  to the  question of 
costs.  

 

In  most  sources,  it  was  difficult  for  respondents  to  directly  attribute  costs  to  the  EUTR 
specifically.  It  is  possible  that  the  cost  ranges  provided  cover  other  elements  of  legal  and 
environmental compliance, wider than the EUTR.  

  Samples  may  not  be  representative.  Participation  in  the  surveys  is  driven  by  incentives  to 
participate, which in this case relate to size of costs – i.e. those facing higher DD costs have a 
greater incentive to participate to raise awareness of this issue. For example, in the WCMC 
2019 survey, responses were received from only 122 out of at least 2509 operators contacted, 
and 10 out of 85 trade associations.  

 

It  is  unlikely  that  the  samples  appropriately  represent  the  profile  of  the  industry  more 
broadly,  in  particular  the  split  between  large  companies  and  SMEs.  In  theory,  it  could  be 
expected that SMEs have fewer separate sources of raw material and/or less complex supply 
chains,  and  thus  potentially  smaller  costs.  Noting  that  only  4-5%  of  importers  are  large 
(Eurostat data), differences in costs by size would affect the overall figures.  

86 https://www.gtf-info.com/wp-content/uploads/2016/07/gtf-supplier-and-consumer-due-diligence-analysis.pdf. 
87 Insights from the implementation of the EUTR by operators, UNEP-WCMC technical report, August 2019. 
88 Cowi A/S, Indufor and Milieu, 2019. Impact Assessment Study for the Revision of the Product Scope of the EU Timber Regulation. 

https://op.europa.eu/en/publication-detail/-/publication/fd26ad03-9895-11e9-b2f2-01aa75ed71a1/language-en.  

30 

 
 
                                                      
  Costs  of  importers  may  differ  based  on  the  origin  of  imports,  i.e.  importers  with  imports 
originating  from  high-risk  countries  could  face  higher  costs  of  DD  System.  It  is  not  clear 
from  the  studies  from  where  the  respondents  sourced  their  imported  products.  However, 
extending the logic that those with higher costs are more likely to participate, there is a risk 
that  the  samples  are  over-represented  by  those  with  more  challenging  DD  associated  with 
importing  from  higher  risk  countries.  Based  on  Eurostat  data,  about  41%  of  EU  timber 
imports  (Comext  data)  come  from  high-risk  countries  (as  defined  according  to  ILAT 
scores89). 

Table 5-1 Table summarises the findings of the four cost surveys used 

Source 

Range of costs 

Size of sample 

Size of 
operators 

Commentary 

Norman, 2021 

EUR 10,000 – 
35,000 (best 15,000) 

72 (the study notes that some 
companies chose not to 
answer questions related to 
compliance budgets or costs 
at all. It is unclear how many 
operators out of the 72 
responded to the question on 
costs) 

WCMC, 2019 

EUR 0 – 571,000 
(excluding an outlier 
of EUR 8m) (best 
EUR 38,500) 

16 reported costs in EUR, 
out of 84 reporting on costs 
(out of total sample in the 
survey of 122) 

39% large / 
61% SMEs 

72 
respondents 
indicated 
size: approx. 
57% SMEs 

COM, 2016 
(Evaluation) 

EUR 5,000 – 90,000 
to set up the DDS 
and 10,000 – 50,000 
to maintain the DDS 

5 respondents on setting up 
DDS and 3 respondents on 
maintaining the DDS 

n/a 

GTF, 2015 

EUR 1,000 – 70,000 
(best EUR 26,637) 

15 reported on costs (out of 
72) 

100% SMEs 

Small sample.  
Problem of attribution: it is reported that 
only 20 out of the 72 respondents reported 
a specific company budget for compliance 
to EUTR.  
The report also states that half of surveyed 
operators had developed a timber sourcing 
policy.  

Small sample.  
The report indicates that 58% of 
respondents noted that EUTR resulted in a 
cost to the company, 36% indicated that it 
resulted in no additional or in negligible 
costs, and 6% did not know. A number of 
those who reported no or negligible costs 
explained that they already had due 
diligence systems in place. 
Small sample.  
Problem of attribution: most companies 
were unable to respond to the question on 
costs. 
According to the private sector survey 
(Annex 7), 47% of the sample of 20 
companies interviewed mentioned that 
they had incurred additional costs for 
developing and/or operating their DDS.  
82% of respondents felt that the EUTR has 
created additional obligations and burdens 
for business in the EU particularly on 
setting up a DDS, whereas 13% disagreed 
(5% had no opinion). The views were 
aligned across the stakeholder groups but 
the result indicates that the implications 
are less burdensome on large companies 
than on SMEs.  
83% of the respondents said the EUTR has 
created additional obligations and burdens 
for business in the EU particularly on 
maintaining a DDS, whereas 12% 
disagreed (5% had no opinion). These 
views were also aligned across the 
stakeholder groups. 
Small sample.  
Problem of attribution: When asked to 
quantify costs of compliance with 
legislation, many companies were unable 
to reply. Many of the companies 

89 https://www.forest-trends.org/wp-content/uploads/2020/02/ILAT-Risk-Project-Methodology.pdf. 

31 

 
 
 
 
                                                      
Source 

Range of costs 

Size of sample 

Size of 
operators 

Commentary 

interviewed combined the cost of legal and 
environmental compliance. 

Based  on  the  reporting  by  MS  under  EUTR,  there  are  142  825  importing  operators  in  the  EU 
(2019)  under  the  scope  of  the  EUTR  requirements  of  DD  (WCMC  2019).  This  figure  is  not 
appropriate to calculate recurrent annual costs, because it includes companies which import only 
occasionally or less frequently than once a year.  

The costs are estimated as a range to take into account the uncertainties in the data. Based on this 
information, a number of assumptions have been made: 

  The  best  estimate  of  annual  recurrent  costs  of  DD  of  the  latest  study  (EUR  15000  per 
operator and per year from  Norman, 2021) is taken as the upper estimate  for the range 
given the bias of the sample towards large companies. 

  The central cost value of the range is estimated in EUR 10000 per operator and per year, 

in the lower range of the available surveys.  

  The lower estimate is estimated in EUR 1000 per operator per year from GTF 2015. 
  The unitary costs per operator are applied to half of the number of importing operators 
(71 412) to take into account the proportion of operators indicating no significant costs, 
the  uncertainties  as  regards  the  attribution  of  costs  to  EUTR  due  to  existing  sourcing 
policies at the level of companies and to compensate for the fact that part of the 142 825 
are importing sporadically or in frequencies lower than annual.     

On  the  basis  of  these  assumptions,  the  overall  annual  EUTR  costs  for  importing  operators 
has  been  estimated  in  mEUR  714,  with  a  range  between  mEUR  71  (low  estimate)  and 
mEUR 1071 (high estimate).  

The above costs need to be seen in the light of the total import value of products under the scope 
of  EUTR,  which  was  bEUR  24.5  on  average  between  2015-2019  giving  a  range  of  estimated 
costs between 0.29% and 4.3% of the import value before customs and taxes. The estimate most 
likely illustrates the differences - to a certain degree - in costs between importing operators. 

For the sake of comparison, a 2016 study90 on the cumulative cost of specific EU legislation on 
EU  forest-based  industries,  based  on  a  different  methodological  approach  to  cost  calculation, 
concludes  that  the  cost  for  the  overall  woodworking  sector  of  only  EU  forest  legislation 
(basically  the  EUTR)  was  estimated  0.2%  of  the  added  value  generated  in  the  sector,  which 
would correspond91 to around EUR 300 million, within the range estimated above. 

Traders  are  only  required  by  EUTR  to  keep  a  record  of  their  suppliers  and  customers.  This 
requirement is, however, estimated to only involve negligible costs, as such information can be 
expected to be part of normal business operation (e.g. storage of supplier invoices containing the 
required  information).  There  are  no  estimates  on  the  number  of  traders  (including  retailers) 
dealing in timber and derived products thereof. 

For  MS  there  has  been  costs  associated  in  establishing  an  inspection  system  for  operators  that 
place  imported  products  on  the  market,  while MS  already  having  forest  inspection  systems  for 
domestic  production  in  place  normally  have  used  those  existing  systems.  Combined  human 
resources  estimates  ranged  from  as  few  as  0.125  full-time  equivalent staff (Luxembourg)  to  as 
many  as  601  full-time  equivalent  staff  (Italy).  Additional  results  from  the  online  public 
consultation  showed  that  only  a  small  number  of  respondents  have  attributed  high  costs  to  the 
implementation  of  the  EUTR  for  authorities,  with  only  31  (18%)  respondents  (not  only  public 

90 European Commission (2016). An assessment of the cumulative cost impacts of specified EU legislation and policies on the EU 

forest-based industries. https://op.europa.eu/en/publication-detail/-/publication/0271b2a0-40b7-11ea-9099-
01aa75ed71a1/language-en.  

91 Using a total gross value added of EUR 139 billion (https://ec.europa.eu/eurostat/statistics-

explained/index.php?title=Wood_products_-_production_and_trade#Wood_based_industries).    

32 

 
 
 
                                                      
authorities) agreeing that the costs were high for authorities. Overall, 6 respondents from public 
authorities agreed, 13 disagreed, 3 did not know and 1 was neutral. 

Costs of FLEGT Regulation 

When  estimating  the  costs  regarding  FLEGT  Regulation,  it  is  necessary  to  split  the  costs  into 
“development”  and  “functioning”.  With  regard  to  the  “development”  costs,  these  needs  to  be 
seen in the broader frame of the FLEGT Action Plan and  originate primarily from EU and MS 
funded projects and programmes. The FLEGT evaluation found that the total investments under 
the  FLEGT  AP  for  the  period  2003-2014  across  activities  made  by  the  EU,  its  MS  and  other 
sources (including producer country governments, civil society and the private sector) amount to 
an  estimated  total  of  EUR  935  million  (European  Commission,  2016).  However,  only  a 
proportion of this was spent on VPA signed and negotiating countries: EUR 346 million by the 
Commission and EU MS and EUR 38 million from other sources. The evaluation also found that 
the cost of the VPA process in terms of time was substantial, with most stakeholders recognising 
that this was a consequence of its complex and comprehensive nature. 

Drawing together data on cost of the “functioning” is difficult as experience is limited to the cost 
estimate for Indonesia as the only “fully functioning” FLEGT country, representing only 3% of 
the  EU import  of timber  products. The  case study  on  the costs  of VPA  for  Indonesia  from  the 
2016 evaluation of the FLEGT Action Plan provides estimated costs for the “development” of the 
VPA in Indonesia. 

  Contribution from the European Commission: EUR 20 million 
  Contribution from the UK (as part of their Multi-stakeholder Forestry Programme): between 

EUR 18.8 million (low estimate) and EUR 60 million (high estimate) 

  Contribution from government of Indonesia: EUR 20 million 

The total contributions for the VPA in Indonesia thus range between EUR 58.8 million and EUR 
100 million. 

The “functioning” of the system generates additional costs on an annual bases as follows: 

  Annual audits and certification in Indonesia: EUR 5,0 million  
  Annual support to SMEs and family holdings: unknown 
  SILK administration: EUR 1,2 million 
 
Issuing of licenses: EUR 1,7 million 
  EU customs license clearance (administration exclusive): EUR 0,7 million  
  Operators handling of licenses: EUR 2,8 million 
  EU COM FLEGT support (IT/Staff): 0,1 EUR million 

This means approximately EUR 11,5 million of yearly ‘functioning’ related costs, excluding the 
costs related to support to SMEs and family holdings. 

Comparing the total costs with volumes of imports cleared by customs between 2016 and 2019, 
during which the licensing system was operational, provides a relative cost between EUR 29 and 
49  per  tonne  of  import  or  on  average  EUR  83  issuing  a  license,  EUR  22  for  MS  handling  a 
license  and  EUR  80  for  the  operator  per  licence.  When  comparing  the  overall  costs  over  the 
period with the outcome of this process, this results in a cost of about EUR 336-338 per tonne of 
import.  

There  is  evidence  that  FLEGT  licences  are  reducing  the  costs  of  timber  import  for  those  EU 
operators mainly or fully sourcing their products from Indonesia, as they do not need to exercise 
DD under the EUTR.  

The FLEGT/VPA system makes it necessary for the VPA countries to develop and implement a 
licencing scheme, undertake inland and border inspections, certify forests and plantations, as well 
as control and verify transports and traders, warehouses and processing industry, which leads to 

33 

 
 
 
 
 
complex enforcement systems with high administrative costs that exceed the capacities of some 
partner countries. There is limited potential to reduce the costs of the VPA system. Considering 
that timber and derived products followed by FLEGT-licenses cover only 3% of timber imports 
into the EU, the costs and administrative burdens seem immense – and this not only for the EU 
MS.  

Benefits 

Section 5.1 on Effectiveness looks at the achievement of objectives of the Regulations and points 
to a mixed evidence regarding the impact of the EUTR on illegal logging (in the EU and in third 
countries)  and  the  placing  of  illegally  harvested  timber  to  the  EU  market.  A  review  of  the 
literature  has  identified  benefits  attributed  to  the  EUTR  and  FLEGT.  However,  the  precise 
impacts cannot be quantified, limiting the potential for direct comparison between the  costs and 
benefits.  

Both Regulations though seem to have contributed to increased awareness of the issue of illegal 
logging and associated trade in many timber producing countries while the VPA processes under 
the FLEGT Regulation also seems to have contributed to enhanced stakeholder participation and 
improved forest governance in VPA partner countries.  

Benefits of EUTR 

As indicated in section 5.1, one of the key benefits of the EUTR (both in terms of significance 
and strength of evidence) has been its impact on transparency  of supply chains: operators must 
follow the supply from the harvest sites, if risks have been identified by their  DD. The greater 
availability  and  flow  of  information  subsequently  allows  the  application  of  pressure  down  the 
supply chain to the original source to ensure logging is legal. This benefit is widely cited in both 
the literature92 and by stakeholders. 

Through  the  EUTR,  MS  have  helped  to  increase  awareness  of  the  problem  of  illegal  logging 
through  campaigning  and  educating  operators  (European  Commission,  2020).  Likewise  the 
European  Commission  has  published  materials  to  raise  awareness  of  timber  legality  issues  and 
support CAs and operators in their risk assessment (e.g. EUTR country overviews and briefing 
notes). A literature review and results of the stakeholders’ consultation also point to the creation 
of  a  level  playing  field  for  the  EU  operators  and  a  better  understanding  of  their  supply  chains 
(OPC and interviews with CAs and NGOs). 

For the EUTR, the compliance costs are low in comparison to its benefits which – while difficult 
to monetise – can be considered to justify the costs. Therefore, using the EUTR (or indeed a new 
system based on enhanced DD), covering, as it does, all countries, would be more cost-efficient, 
and would avoid the  considerable investment  needed in certain elements of the VPA processes 
that  contribute  to  a  significant  administrative  and  financial  burden.  The  EUTR  has  helped 
improve the forest sector in different ways by the constant pressure for legality in the sector. The 
market has adapted to the situation differently in varying regions and countries. One example is 
the preparation and certification of the Russian Federation Western Forest arears in corporation 
between  WWF  (Russia),  FSC  and  state  forest  agencies;  another  is  the  development  of  Bolsa 
Verde do Rio de Janeiro (BVRio) using Artificial Intelligence to cross-check Brazilian operators 
for potential breaches of applicable national legislation and to the TSD negotiations based on the 
Association  Agreements  to  ensure  improved  forest  management,  transparency,  forest  inventory 
and improved law enforcement.      

The  US  Lacey  Act  and  national legislations  being  developed in  Australia,  South  Korea, Japan, 
New Zeeland and Switzerland show that the EU does not stand alone and that the EUTR has been 
an inspiration for  other  countries to fight  illegal logging.  However,  keeping  the  issue  of  illegal 

92 Patel. (2019). Illegal Timber Trade: Analysing the Effectiveness of European Union Timber Regulation (EUTR) in the UK. 

34 

 
 
 
 
                                                      
logging  and  deforestation  on  the  global  political  agenda  could  be  achieved  with  a  new  system 
that addresses the gaps of the current system in a cost-efficient way. 

Drawing robust conclusions regarding the impact of EUTR on volumes of illegally logged timber 
entering  the  EU  is  challenging  given  that  the  data  available  presents a  mixed  picture.  Drawing 
firm  conclusions  with  respect  to  impact  on  illegal  logging  in  exporting  countries  is  even  more 
problematic. 

Benefits of FLEGT Regulation 

The  most  significant  and  most  widely  cited  benefit  of  the  introduction  of  VPAs  and  the 
associated policy dialogue is the improvement in governance and legal reform that flow from this 
process, capacity building, as well as increased engagement of stakeholders and civil society. The 
importance  of  these  benefits  are  flagged  in  both  the  literature  and  across  the  stakeholder 
engagement activities.  

With  regards  to  the  impacts  of  the  FLEGT  Regulation  on  illegal  logging  and  illegal  timber 
imported to the EU, it is not possible to conclude that the FLEGT Regulation has had a positive 
impact  on  illegal  logging  in  the  VPA  countries  and/or  on  the  level  of  illegally  logged  timber 
entering  the  EU.  There  is  some  evidence  that  once  the  FLEGT  licencing  starts,  exporters 
experience a benefit. But overall the benefit to Indonesian exporters has been limited to date. The 
trade  data  shows  that  Indonesian  exports  to  the  EU  increased  by  only  3.6%  from  2015-18 
(relative to a 10% growth in all imports) and by only 0.4% between 2016-18 (relative to a 12% 
growth in all imports). Therefore, its benefits may not seem to justify its costs. 

In addition the two Regulations seems to have little if any clear synergies or ways of benefitting 
from  each  other.  Regarding  FLEGT  and  EU  domestic  production  this  is  quite  obviously. 
Regarding inspections at operators importing from third countries, products covered by a FLEGT 
licence  will  be  validated  at  the  boarder  during  the  custom  procedure  by  Custom/CAs.  Non-
FLEGT  products  will  be  inspected  indirectly  by  the  CAs  checking  the  functioning  of  the  DD 
system  at  the  operator’s  premises  and  most  often  after  placing  on  the  market  of  the  products. 
EUTR  require  that  the  operator  carry  out  DD  before  the  purchase  and  placing  on  the  market. 
FLEGT require the importer has the license at the point of custom procedure takes place. Though 
for products covered by a FLEGT license there would only be a need for a limited number of spot 
checks  at  the  operators  to  ensure  the  procedures  has  been  followed  and  nothing  has  been 
hampered with.  

5.3 

5.3  Coherence 

EUTR 

The EUTR is seen as being internally coherent by stakeholders, but a lack of clarity regarding key 
definitions  and  implementation  in  national  legislation  have  posed  critical  challenges  for 
implementation in coherence with Article 19 (2) 2: “The penalties provided for must be effective, 
proportionate and dissuasive”.  

As also mentioned in section 5.1 Effectiveness, stakeholders have commented in EUTR/FLEGT 
Regulation  Expert  Meetings  that  the  definition  of  ‘negligible’  is  unclear,  resulting  in  diverging 
views  on  ‘negligible  risk’  and  potentially  impacting  its  application  in  national  legislation.  This 
could  result  in  DD  systems  assessing  similar  timber products  at  different  risk  levels,  ultimately 
undermining  the  functioning  of  the  regulation.  Multiple  stakeholders  throughout  the  roadmap 
feedback noted that further guidance is required to clearly define what constitutes ‘good’ DDS.  

The  enforcement  of  the  EUTR  by  national  law  varies  considerably  regarding  domestic  forest 
owners. MS with large domestic markets for timber often enforce larger fines and strict criminal 
prosecutions for infringements. In contrast, countries with smaller domestic production and larger 
share of imports are early movers of EUTR implementation, but with softer, more collaborative 

35 

 
 
 
 
 
measures applied to traders and operators93. This is further emphasised by the large disparity in 
the inclusion of criminal sanctions and maximum fines by MS for EUTR infringements, creating 
an  uneven  playing  field  within  the  internal  market94.  (See  also  section  3  of  this  impact 
assessment.) 

MS  have  encountered  difficulties  and  delays  in  transposing  the  EUTR  DD  requirements  into 
national law, as the concept is not always easily interpreted into the various legal approaches of 
MS.  In  addition,  the  delays  in  the  adoption  of  the  relevant  legislation  to  enforce  the  EUTR  in 
some MS has led to often sporadic checks on operators and monitoring organisations95.  

Some  issues  have  been  identified  between  the  Regulation  and  certification  schemes  (e.g. 
FSC/PEFC), including the misuse of certification and questions around transparency and chain of 
custody.  The current  CoC systems  seem  to only  work  for companies  not  committing  deliberate 
fraud. Concerns about the integrity of CoC systems are mounting, and therefore discussions over 
this gap have intensified in recent years. In addition, the lack of independent audits, considered to 
be  key  in  ensuring  the  robustness  of  the  certification,  was  found  to  be  a  key  weakness  of  the 
private certification schemes96,97. A specific study commissioned by the Commission98 confirms 
these findings. 

FLEGT Regulation 

The  FLEGT  Regulation  is  also  seen  as  internally  coherent  by  stakeholders,  with  the  main 
previous  evaluation  of  FLEGT  Regulation  reporting  positively  on  the  internal  coherence  of  its 
provisions99. This view was corroborated in the online public consultation, with 53%  (n=61) of 
respondents stating that there were no coherence issues, while the other did not outline instances 
of  such  issues.  Despite  the  positive  overall  assessment  of  the  FLEGT  Regulation  and  the 
common  provisions  of  VPAs,  some  issues  exist  with  regards  to  the  coherence  of  the  FLEGT 
Regulation and the implementation of the VPAs. 

Although  the  VPA  minimum  content  (including  a  definition  of  legality  aligned  with  EU 
definition  and  product  scope)  is  viewed  as  beneficial,  the  ability  to  then  vary  the  content  (in 
particular  product  scope)  between  VPAs  creates  additional  complexity  for  CAs,  customs  and 
operators. Due to the large discrepancies between the situations in VPA partner countries and the 
context needed to start issuing licenses, issues take time to solve, and there is a need for engaging 
CAs  at  the  development  and  implementation  stages  of  VPAs, in  order to  resolve  any  issues  of 
divergence between the instruments ex ante (stakeholder interviews with NGOs). 

The availability of FLEGT licenced timber products from only one country, is one of a number of 
variables which operators take into account when considering sources of imports. This has limited 
the  ability  of  operators  to  take  advantage  of  FLEGT  licences  and  has  restricted  those  able  to 
reduce their EUTR compliance costs. 

Coherence between EUTR and FLEGT Regulation 

The Regulations are complementary to each other by addressing the supply and demand sides of 
timber harvest and trade, and are key legal instruments of the FLEGT Action Plan (AP). 

The EUTR and the FLEGT Regulation are seen as coherent with each other by stakeholders, their 
scope  and  objectives  are  aligned  (European  Commission,  2016;  EIA).  This  was  confirmed  by 
CAs in stakeholder interviews, as well as in the online public consultation conducted as part of 

93 A political economy of the European Union's timber regulation: Which member states would, should or could support and 

implement EU rules on the import of illegal wood? – ScienceDirect. 
94  wwf_eutr_implementation_eu_synthesis_report_2019.pdf (panda.org). 
95 https://ec.europa.eu/environment/forests/eutr_report.htm. 
96 WWF, 2015 Profitability and Sustainability in Responsible Forestry Economic impacts of FSC certification on forest operators. 
97 https://fsc-watch.com/2020/07/02/ikeas-ukrainian-illegal-timber-problem-that-fsc-didnt-notice/;https://fsc 

watch.com/2018/10/18/new-documentary-slams-fsc-the-eco-label-could-not-slow-down-the-forest-industry/ ; 
https://e360.yale.edu/features/greenwashed-timber-how-sustainable-forest-certification-has-failed.  

98 Study on Certification and Verification Schemes in the Forest Sector and for Wood-based Products; Preferred by Nature; 2021 

[ongoing study to be published in the next weeks, before the adoption of the IA]. 

99 FLEGT Eval Consultant Report Annex 7.pdf (europa.eu). 

36 

 
 
                                                      
this Fitness Check. Stakeholders reported few challenges relating to a lack of coherence between 
the obligations under the FLEGT Regulation and the EUTR, with 23% (n=146) stating it was not 
a challenge at all. However, there are areas where coherence has not been sufficient between the 
EUTR and FLEGT Regulation. In particular, the product scope varies between the EUTR and the 
VPAs,  creating  complexity  around  the  requirements  applying  to  different  imports  and  from 
different source countries. 

Both the EUTR and FLEGT Regulation appear broadly coherent with wider EU policy although 
it  can  be  questioned  if  they  are  still  coherent  with  the  political  ambition  as  expressed  in  the 
European Green Deal and related initiative. The increase in ambition around climate action  and 
biodiversity  poses  a  challenge  for  the  relevance  of  the  EUTR  and  FLEGT  Regulation  with  its 
focus on legality, although the detail of what this means for the timber and timber product sector, 
in the EU and globally, is yet to be determined. The FLEGT Regulation as such remains coherent 
with  EU  trade  policies  and  actions  by  the  EU,  supporting  reforms  that  may  contribute  to 
promoting sustainable development, social and safety standards, communities’ rights, and respect 
for the environment.  Stakeholder  consultations  did  not  raise  any  substantive  issues  surrounding 
the coherence of EUTR or the FLEGT Regulation with EU environmental policy. 

Both the EUTR and FLEGT Regulation appear broadly coherent with the international regulatory 
framework  such  as  CITES,  CBD  etc.  The  regulatory  scope  of  EUTR  and  FLEGT  partially 
overlaps with the objectives of CITES but differs in the broadness of scope and methodology for 
determining legality.  

5.4 

5.4  Relevance 

Since the adoption of the EU FLEGT Action Plan and the subsequent adoption of the EUTR and 
FLEGT  Regulation,  the  priorities  of  the  EU  have  become  more  ambitious,  moving  from 
“legality” to “sustainability”. Sustainability was already a key issue at the time of the adoption of 
the EU FLEGT Action Plan in 2003, but at the time  legality was considered  a necessary  ‘first-
step’. This was a reflection of broader policy developments, but might also have been influenced 
in part by issues arising around the implementation of the instruments themselves, which appear 
to challenge the continued relevance of the Regulations. The exclusive focus of the Regulations 
on  legality  (rather  than  sustainability)  and  timber  (rather  than  a  wider  range  of  commodities) 
means that both instruments only partially contribute to the achievement the explicit EU  policy 
goal of halting deforestation and forest degradation more broadly. 

The product list covered by the EUTR excludes various secondary or processed timber products 
such  as  some  types  of  furniture,  musical  instruments,  charcoal,  coffins  and  various  paper 
products100,101.  In  terms  of  value,  books  are  the  most  valuable  item  imported  by  the  EU-27  not 
covered  by  EUTR,  followed  by  other  types  of  printed  matter,  chairs,  charcoal,  tables  and 
kitchenware. There may be opportunities in broadening the scope of the products covered by the 
EUTR to increase its effectiveness, but there is uncertainty around whether the benefits of doing 
so  outweigh  the  costs,  as  long  as  the  substantive  focus  is  not  changed  from  legality  to 
sustainability.  The  European  Commission  Impact  Assessment  in  2017  on  the  revision  of  the 
product scope of the EUTR concluded that (with the exception of charcoal), the inclusion of all 
remaining furniture and wooden tools would yield gains in covering additional illegally-sourced 
timber. However, expanding the coverage of products also implies additional regulatory burden 
and  cost  to  the  operators  involved  and  at  some  point  the  costs  may  outweigh  the  gains  in 
additionally prevented illegal timber trade. The OPC revealed general support for an expansion of 
the EUTR product scope, but with support differing for specific categories. Consensus emerged 
across  various  stakeholders  on  the  need  to  include  charcoal  and  remaining  furniture  categories. 
The inclusion of printed media is more contentious, with printers generally calling for expansion, 
but representatives of publishing houses being against. 

100 Probos. (2014). Import of secondary timber products by the EU-28: the Netherlands in focus. Wageningen, The Netherlands. 
101 Masiero, M., Pettenella, D., & Cerutti, P. O. (2015). Legality Constraints: The Emergence of a Dual Market for Tropical Timber 

Products? Forests, 3452-348. 

37 

 
 
                                                      
The  EUTR  as  EU  legislation  allows  flexibility  in  responding  to  new  and  emerging  challenges. 
The  due  diligence  requirement  placed  on  all  EU  based  operators  allows  the  Regulation  to  be 
flexible  to  changes  in  trade  patterns  (e.g.  rise  in  prominence  of  China  as  a  trade  partner).  The 
FLEGT  Regulation  and  its  licensing  system,  which  are  implemented  through  direct,  bilateral 
VPAs with exporting countries are more challenging to be used for reacting in a flexible way to 
such  changes.  As  demonstrated  by  the  results  of  the  studies  and  public  consultation,  there  has 
been no discernible advance of VPA partner countries over other producer countries in reducing 
the level of illegal logging, with the notable exception of Indonesia, where the VPA process was 
embedded in a comprehensive national reform process. 

5.5 

5.5  EU Added Value 

There is evidence that the EUTR has delivered beyond what would have  happened without EU 
action,  in  particular  through:  enabling  cooperation  and  learning  across  MS  and  ensuring  wider 
policy coherence. Action at EU level has created a level playing field for operators although  the 
variety and divergence in enforcement at national level with respect to  both the prohibition and 
due diligence systems have limited the ability of the EUTR to realise its full potential. 

There  is  also  evidence  that  EU-level  action  through  the  FLEGT  Regulation  can  provide  added 
value above  what would have been possible at MS level. However, challenges have limited the 
ability to achieve its full potential value added (namely that only one country has progressed to 
licencing). 

6. 

6. 

CONCLUSIONS 

6.1 

6.1  Findings 

Effectiveness:  

EUTR  

There  is  no  clear  data  based  evidence  that  the  EUTR  as  a  single  instrument  has  significantly 
lowered the volume of illegal logging globally and therefore no clear conclusion can be drawn on 
the effect of EUTR on illegal logging compared to the baseline. It can only be inferred that if the 
majority of imported wood products is being imported in accordance with the  DD requirements 
established  under  the  EUR  the  volume  of  illegal  wood  products  on  the  EU  market  must  have 
decreased  while  changes  in  the  world  trade  since  2010  might  have  resulted  in  illegal  timber 
entering other markets.  

The  requirements  of  improved  transparency  and  information  gathering  to  fulfil  the  DD 
obligations on evidence of the place of harvest and no breached of applicable legislation have put 
pressure on all actors along the supply chains. In addition to this, a number of implementation and 
enforcement  challenges  have  been  identified  regarding  the  functioning  and  effectiveness  of  the 
due diligence system, in particular the way the EUTR has been enforced in MS.  

DDSs are being applied to cover the majority of timber, timber- and wood based products placed 
on the EU market. Such systems are mainly applied by larger operators. Smaller operators are less 
inclined to implement them, not least because they face a number of challenges in developing and 
implementing  DDSs,  including  limited  awareness  and  understanding  of  their  obligations.  The 
most  critical  issue  for  operators  is  the  ability  to  verify  the  robustness  of  information  obtained. 
Therefore,  the  effect  of  DD  is  regarded  as  having  low  impact  on  the  legality  of  timber  being 
placed on the market by the majority of SMEs. 

The  use  of  the  concept  of  ‘negligible  risk’  in  the  DD  provisions  of  the  EUTR  has  further 
complicated  implementation  and  enforcement.  The  term  is  subjective,  which  makes  it  more 
difficult to select which information to  gather  and complicates the determination of wherever  a 
risk is ‘negligible’ for operators, CAs and the courts. This issue is compounded by the relatively 

38 

 
 
short  history  of  DD  as  a  concept  in  the  legal  systems  of  many  MS.  Difficulty  proving  ‘non-
negligible risk’ in court has also led to some hesitations in bringing cases to court. 

All  MS  have  established  legislative  frameworks  to  implement  the  EUTR,  though  the  level  to 
which the national provisions provide for enforcement differs. This is mainly due to the fact that 
the establishment and definition of sanctions is within the powers of EU MS. Evidence exists that 
operators clearly see a variation in the stringency with which the EUTR is enforced across MS 
(e.g.  number  of  checks,  level  of  penalties),  which  leads  to  attempts  observed  to  import  riskier 
timber via specific MS. There are also important differences of understanding and interpretation 
in different MS which condition their implementation of the regulation. 

The effectiveness of some CAs’ checks has been hampered by the lack of formalised cooperation 
with customs. Without a complete set of basic data on all operators and the import of timber and 
wood products, an effective and efficient risk analysis is not possible. 

In  MS  where  the  CAs  have  access  to  customs  data,  risk-based  inspection  plans  and  efficient 
inspections  can  be  expected.  This,  combined  with  the  systematic  approach  of  DD,  generally 
makes inspections efficient and is one of the reasons of why the majority of the volume imported 
into the EU has been subject to DD risk mitigation. Since all MS lack the power to redraw or halt 
marketing  of  products  already  placed  on  the  market  even  without  clear  evidence  of  inadequate 
DD  and  verifiable  determined  negligible  risk,  the  market  powers  keep  traders  and  retailers  to 
source  from  questionable  operators  if  the  price  is  low  enough.  This  may  drive  operators  to 
continue  sourcing  wood  based  products  from  high-risk  countries  like  Myanmar,  Belarus  and 
Ukraine.    

MOs  have  not  functioned  as  the  support  mechanism  for  operators  they  were  intended  as.  They 
appear to have been of only very limited benefit, if any, for a number of reasons. These include 
the  operators’  fear  of  being  exposed  if  in  breach  with  EUTR,  the  fact  that  MOs  are  obliged  to 
notify CAs of significant or repeated failures by the operator as well as the cost of their services. 
There  were  also  several  cases  where  compliance  with  the  EUTR  was  problematic  even  while 
using  MOs  services.  Another  major  issue  is that the uptake  of the services  of  the  organisations 
recognised as MOs was very limited, and even in these limited cases they were often contracted 
as  consultants,  not  as  recognised  MOs.  In  addition,  the  recognition  process  is  heavy  and 
resources-intensive for both authorities and applicants, while the system shows limited flexibility 
to respond in cases of challenges. 

The  EUTR  -  even  if  hampered  by  a  number  of  design  elements  and  enforcement  weaknesses  - 
shows  promising  results  in  terms  of  both  effectiveness  and  efficiency,  given  that  it  covers  the 
whole world, and at the same time has equipped the EU with a basis to work closely together with 
other  consumer  countries  to  address  the  problem  of  leakage.  The  EUTR  legislation  has  also 
inspired  the  development  of  demand-side  legislation  in  other  non-EU  countries  (e.g.  Australia, 
South  Korea  and  Japan)  although  any  subsequent  impact  relies  on  the  effectiveness  of  these 
policies. The  US  extended  an  existing  legislation  (Lacey  Act)  to cover  similar  situations as the 
ones addressed by the EUTR. That said, there are continuing reports of significant illegal activity 
in  some  of  the  EU’s  key  sources  of  imports  such  as  Russia  and  Ukraine,  but  data  limitations, 
again, make firm conclusions difficult.  

The  trade  data  also  presents  mixed  signals.  Intra-EU  trade  (lower  risk  generally  than  extra-EU 
imports)  grew  less  over  the  period  of  implementation  relative  to  imports  as  a  whole,  as  did 
imports from ‘lower risk’ countries. Furthermore, there was an absence of significant changes in 
trade patterns towards more transparent countries. However, difference-in-difference analysis of 
trade  data  (which  can  more  completely  control  for  broader  market  influences)  tentatively 
concluded that the EUTR has led to a reduction in imports of illegally harvested timber logging 
imports  to  the  EU  of  between  12-29%  (albeit  based  on  a  relatively  small  comparator  control 
group). Analysis of trade data analysis does not show variance in risk and shifts within countries. 
That said, looking specifically at imports from countries where issues were specifically identified 
over the implementation period (Ukraine and Myanmar) continued and actually grew in the case 
of the latter. China has also become a prominent player in the timber industry – both as a global 
importer  and  an  exporter  to  the  EU  (the  elongation  of  supply  chains  could  signal  a  greater 

39 

 
 
challenge for operators to obtain robust or sufficient information to fulfil DD requirements). Most 
stakeholders  consider  that  the  EUTR  has  led  to  a  positive  change  in  transparency  and  the 
availability  of  information  and  documentation  around  timber  supply  chains  (in  particular 
regarding species and origin) and as such has put pressure on the supply chains to ensure legality 
of the wood based products being exported to the EU.  

FLEGT Regulation 

For the FLEGT Regulation, a number of challenges have been identified. While, VPAs have led 
to  positive  results  in  terms  of  improved  forest  governance  and  of  enhanced  stakeholders’ 
participation, the progress in the negotiation and implementation of VPAs, being the instruments 
for the application of the EU licensing system, has been very slow and there is no clear evidence 
of  its  impact  in  terms  of  stopping  illegal  timber  from  being  placed  on  the  EU  market,  and/or 
reducing illegal logging globally.  

After more than 15 years of engaging in VPA processes with partner countries, only one country 
out of the 15 partner countries engaged in a VPA process, has an operating licensing system in 
place. Furthermore, only one country among the top 10 EU trading partners is engaged in a VPA 
process. In 2018, the timber products covered by FLEGT licences accounted for only 3% of EU 
imports  of  timber.  All  15  VPA  countries  together,  including  14  with  no  operating  system, 
represented only 9% of the total value of EU imports of timber. The limited number of countries 
engaged  in  the  process  has  curtailed  the  ability  of  the  FLEGT  Regulation  to  fully  achieve  its 
objectives, in particular with regard to the volume of trade in timber and derived products they 
cover. 

Many important exporters to the EU considered as high risk countries have never shown interest 
in engaging in the VPA process, e.g. Russia, Ukraine and Brazil. There are several aspects that 
may have held back key export countries from engaging in the VPA process such as a perception 
that VPAs are designed solely for developing tropical countries, a ‘demand-driven’ approach for 
the selection of partner countries, doubts about the economic benefits of VPAs in terms of greater 
EU market access and the potential reputational damage of withdrawing from negotiations once 
started.  

VPA  processes  are  long,  complex  and  fraught  with  challenges.  There  are  a  number  of  factors 
driving  prolonged  negotiations  and  implementation  processes  including  the  conditions  for  a 
TLAS  set  a  high  bar,  weak  governance  systems,  lack  of  institutional  capacity  and  political 
willingness  and  widespread  corruption  in  many  partner  countries  and  difficulties  in  gaining 
agreement from multiple regions in partner countries. Perhaps the most critical driver is political 
will  to  integrate  the  VPA  process  into  a  reform  process  at  the  domestic  level:  a  step  change  is 
often  required  and  there  will  be  stakeholders  who  lose  out,  so  leadership  is  needed  to  drive 
progress.  

Whilst  there  are challenges  for the  negotiation  and implementation  processes, many  issues  also 
arise  during,  but  outside  of,  the  process.  There  is  often  confusion  among  operators  and  traders 
that are subject to the obligations of the EUTR about the status of countries implementing a VPA 
that have not yet reached licencing: there is uncertainty how imports from these countries are to 
be treated under EUTR. Furthermore, even where a country has concluded a VPA, the quality of 
the  information  made  available  to  operators  conducting  DD  may  not  necessarily  be  at  the 
expected  level  that  would  be  expected  after  the  investment  in  the  long  process  would  lead  to 
expected. 

Indonesia  started  to  issue  FLEGT  licences  in  2016  and  the  system  has  been  implemented 
successfully.  From  a  process  perspective,  many  elements  of  licencing  have  been  implemented 
successfully  by  EU  MS,  and  processes  and  systems  are  continuously  updated  and  improved. 
Additional implementation challenges might be expected should further VPA partners progress to 
licencing,  although  a  great  amount  of  learning  can  be  drawn  from  the  Indonesian  experience. 
Processes in Indonesia to issue licences are reported as operating as intended in the VPA. Issues 
have  been  identified and  plans  put  in  place  to  resolve  them  on  an  ongoing  basis.  Nevertheless, 

40 

 
 
 
Indonesia’s experience has also highlighted that once in place, VPAs are still  exposed to policy 
and political changes in the partner country.  

The  nature  of  illegal  activities  makes  it  difficult  to  conclude  with  certainty  that  the  FLEGT 
Regulation has significantly reduced illegal logging globally and/or the level of illegally logged 
timber  entering  the  EU,  even  though  the  OPC  shows  that  88%  (n=169,  Figure  5-5)  of 
stakeholders think that the FLEGT Regulation had an effect on reducing illegal logging. The level 
of exports from Indonesia to the EU has risen since licencing commenced (although less so than 
overall imports to the EU). For VPA countries, there is only limited evidence that engagement in 
the process (prior to licencing) has led to any decrease in illegal logging. Interviewees in Ghana, 
Indonesia and Cameroon102 claim that there has been some progress as regards production forests 
having a management plan. Still, most VPA countries continue to be rated as ‘high risk’ and in 
many cases deforestation has continued apace with no sign of meaningful change. That said, there 
is evidence of VPA partners taking steps in the right direction and putting in place improvements, 
such  as  improvements  in  governance,  enhanced  civil society  participation, clarifications  around 
existing definitions and legislation. With respect to the prevention of illegal timber entering the 
EU, the impact of the FLEGT Regulation has been limited, with only one country issuing FLEGT 
licences.  

There are tangible signs (based on the data available) that the two Regulations together have had 
some impact on the aim to prohibit the placement of illegally logged timber on the EU market, 
but their overall performance is difficult to quantify with any certainty. It is clear  however that 
this objective has not been fully achieved. Nonetheless, it is difficult to conclude to what extent 
the  EUTR  and  FLEGT  Regulation  together  have  had  a  significant  effect  on  levels  of  illegal 
logging globally. 

Efficiency:  

Costs associated with the implementation of the EUTR 

Based  on  the  reporting  by  MS  under  EUTR,  there  are  142  825  importing  operators  in  the  EU 
under  the  scope  of  the  EUTR  requirements  of  DD  (WCMC  2019).  Based  on  the  available 
information on the percentage of operators indicating no significant costs and the uncertainties as 
regards  reported  costs,  the  overall  annual  EUTR  costs  for  importing  operators  has  been 
estimated  in  mEUR  714, with  a  range  between  mEUR  71  (low  estimate)  and  mEUR  1071 
(high estimate). This is based on applying a best estimate of EUR 10 000 per operator (EUR 1 
000  low  estimate  and  EUR  15  000  high  estimate)  to  half  of  the  total  number  of  estimated 
importing operators (71 412). 

The implementation of the EUTR varied greatly across the MS, when looking at both the human 
and  financial  resources  available  to  CAs.  Resources  made  available  for  monitoring,  inspection 
and enforcement of measures regarding domestic and imported timber varied as well due to the 
differences among MS with regard to the importance of domestic timber production, processing 
industry and level of imports. Combined human resources ranged from as few as 0.125 full-time 
equivalent staff (Luxembourg) to as many as 601 full-time equivalent staff (Italy). The majority 
of MS has between 1 and 10 FTE deployed for inspection of importing operators and  with that 
they appear to have been able to cover the majority of the import value. Additional results from 
the  OPC  showed  that  only  a  small  number  of  respondents  have  attributed  high  costs  to  the 
implementation  of  the  EUTR  for  authorities,  with  only  31  (18%)  respondents  (not  only  public 
authorities) agreeing that the costs were high for authorities. Overall, 6 respondents from public 
authorities agreed, 13 disagreed, 3 did not know and 1 was neutral.  

Despite more than 2.300 inspections since 2013, only a limited number of cases has been brought 
to  court.  At  first  sight  this  seems  to  be  in  contradiction  with  the  stakeholder  consultations  and 

102 Cerutti PO, Goetghebuer T, Leszczynska N,  Newbery J,  Breyne J, Dermawan A, Mauquoy C, Tabi PP, Tsanga R,  Der Ploeg, LV 
and Wathelet J-M. 2020. Collecting Evidence of FLEGT-VPA Impacts for Improved FLEGT Communication. Synthesis report. 
Bogor, Indonesia: CIFOR. https://vpa-library.cifor.org/assets/publications/Synthesis_FLEGT_VPA_impacts.pdf. 

41 

 
 
                                                      
OPC  claiming  that  the  terms  “Due  Diligence”,  “negligible  risk”  and  “verification  of 
documentation” are challenges for operators especially SMEs. However it may confirm that CAs 
limit the cases that they bring to court, based on  the experience that the enforcement of EUTR 
and the due DD including the terms just mentioned is challenging and meets with reluctance of 
prosecutors and courts. 

Costs associated with the implementation of the FLEGT Regulation 

The  cost  of  fully  implementing  the  instruments  central  for  the  FLEGT  Regulation  should  be 
divided into two categories, “development” and “functioning”.  

The total investments  by the EU and MS in the  preparation, negotiation and implementation of 
FLEGT  VPAs  since  2004  is  estimated  at  EUR  1.5  billion  shared  between  the  EU  and  MS.  In 
addition  to  this  the  VPA  partner  countries  are  considered  to  have  invested  on  their  side  at  the 
national level, though the level has been proven difficult to quantify as this was partly in the kind 
i.e. time and effort invested by authorities and stakeholders.  

The other relevant part of the costs relates to the functioning of an operational licensing system. 
Here,  one  could  only  take  the  costs  related  issuing  FLEGT  licenses  from  Indonesia  as  a  basis 
including the estimated annual costs for EU Customs and CAs. The total costs for Indonesia, MS 
customs  and  importing  operators  in  handling  the  approximately  35.000  licenses  per  year  are  in 
total  EUR  11,5  million  including  the  support  and  costs  for  certification  of  forest  areas  in 
Indonesia. This means that the cost per license issued was approximately EUR 330. 

On the EU side, costs were mainly linked  to problems with the  validation of licenses.  In 2019, 
FLEGT  Regulation  licenses  were  validated  within three  days  of receipt in  69.7%  of cases.  676 
FLEGT  Regulation  licenses  out  of  33  302  received  were  subject  to  checks  beyond  the  basic 
verification of the license (including, for instance, contacting the Indonesian license information 
unit for clarification) by 19 MS (European Commission, 2020). CAs of EU MS commonly report 
challenges  with  regards  to  FLEGT  Regulation  licenses.  Mismatches  between  the  Harmonized 
System  (HS)  codes  contained  in  the  FLEGT  licence  and  the  HS  codes  contained  in  the  EU 
customs declaration represent the majority of issues identified. Indeed, in 80% of licenses where 
customs validation found irregularities, the problem was due to a mismatch between HS codes by 
exporting authorities and EU customs authorities103. One third (33%, n=155) of the respondents to 
an  open  public  consultation  question  on  the  FLEGT  Regulation  (question  7)  thought  that  the 
different interpretation of HS codes between the EU and partner countries was a significant or a 
very significant challenge. This issue was also raised during the interview conducted with FLEGT 
CAs.  Each  time  a  license  causes  actions  to  be  taken  additional  costs  are  to  be  added  to  the 
functioning of the licenses system. 

Benefits of EUTR 

Drawing robust conclusions regarding the impact of EUTR on volumes of illegally logged timber 
entering the EU is challenging given the data available. The available evidence presents a mixed 
picture. Drawing firm conclusions with respect to impact on illegal logging in exporting countries 
is even more problematic. One of the key identified benefits is impact on transparency of supply 
chains.  The  greater  availability  and  flow  of  information  subsequently  allows  the  application  of 
pressure down the supply chain to the original source to ensure logging is legal. The EUTR has 
helped to increase awareness of the problem of illegal logging. 

All in all, it seems that the EUTR is efficient for the majority of MS CAs (for those sharing data 
with customs) and for larger operators (having the benefit of scale) as well. 

Benefits of FLEGT 

The most significant and most widely cited benefit of the introduction of VPAs and the associated 
policy dialogue is the improvements in governance and legal reform that flow from this process, 

103 EU FLEGT Facility. (2019). EU-Indonesia FLEGT Voluntary Partnership Agreement. Retrieved from 

https://ec.europa.eu/environment/forests/pdf/Indonesia.pdf. 

42 

 
 
 
                                                      
as  well  as  increased  engagement  of  stakeholders  and  civil  society  and  capacity  building.  As 
regards the impacts of the FLEGT Regulation on illegal logging and illegal timber imported to the 
EU, it is not possible to conclude that the FLEGT Regulation has had a positive impact on illegal 
logging in the VPA countries and/or on the level of illegally logged timber entering the EU.  
Therefore, the FLEGT Regulation cannot be deemed efficient. 

Relevance:  

The  political  priorities  of  the  EU  have  developed  since  the  adoption  of  the  EU  FLEGT  Action 
Plan and the subsequent implementation of the EUTR and FLEGT Regulation. Sustainability was 
already a key issue at the time of the adoption of the EU FLEGT Action Plan in 2003, but at the 
time, legality was considered  a necessary  ‘first-step’. The further development of priorities was 
mainly  caused  by  the  worrying  trends  of  deforestation  and  forest  degradations,  but  might  also 
have  been  influenced  by  issues  arising  in  the  implementation  of  the  instruments  themselves, 
which  appeared  to  challenge  the  continued  full  relevance  of  the  Regulations  in  addressing  the 
underlying  policy  objective. The  exclusive  focus  of  the  Regulations on  one  aspect  of  the issue, 
namely  legality  of  harvest  (rather  than  effect  of  harvesting  and  production  on  rates  of 
deforestation  and  forest  degradation)  and  only  a  limited  range  of  products  i.e.  those  based  on 
wood  (rather  than  a  wider  range  of  commodities),  means  that  both  instruments  only  partially 
contribute to the achievement of the explicit EU  policy goal of  effective contribution to halting 
deforestation and forest degradation at global level. 

There  may  be  opportunities  in  broadening  the  scope  of  the  products  covered  by  the  EUTR  to 
increase  its  effectiveness,  but  there  is  uncertainty  around  whether  the  benefits  of  doing  so 
outweigh  the  costs,  as  long  as  the  substantive  focus  is  not  changed  to  go  beyond  legality.  The 
European Commission Impact Assessment in 2017 into  for the revision of the product scope of 
the  EUTR  from  2017  concluded  that  (with  the  exception  of  charcoal),  the  inclusion  of  all 
remaining furniture and wooden tools would yield gains in covering additional illegally-sourced 
timber. However, expanding the coverage of products also implies additional regulatory burden 
and  cost  to  the  operators  involved  and  at  some  point  the  costs  may  outweigh  the  gains  in 
additionally prevented illegal timber trade. The OPC revealed general support for an expansion of 
the EUTR product scope, but with support differing for specific categories. Consensus emerged 
across  various  stakeholders  on  the  need  to  include  charcoal  and  remaining  furniture  categories. 
The inclusion of printed media is more contentious, with printers generally calling for expansion, 
but representatives of publishing houses being opposed to it against. 

The EUTR as EU legislation has flexibility to respond to new and emerging challenges than the 
FLEGT Regulation. The due diligence requirement placed on all EU based operators allows the 
Regulation to be flexible to changes in trade patterns (e.g. rise in prominence of China as a trade 
partner). The licensing system established by the FLEGT Regulation, based on the direct, one-to-
one  VPAs  with  exporting  countries,  is  inherently  not  an  instrument  that  allows  for  a  flexible 
reaction  as  flexibly  to  such  changes,  as  such  adaptation  would  also  be  subject  to  further 
negotiations with partner countries. 

Coherence:  

The EUTR is seen as being internally coherent, but a lack of clarity regarding key definitions and 
concepts  and  their  interpretation  and  implementation  in  national  legislation  have  posed  critical 
challenges for implementation. There are serious issues around the definition of ‘negligible risk’, 
the  transposition  of  DD  requirements  into  national  legislation  and  their  understanding  and 
interpretation by prosecutors and courts has been challenging, making it difficult for MS CAs to 
successfully pursue enforcement, prosecution and ultimately sentencing by the courts .  

The FLEGT Regulation is also seen as internally coherent. Although the minimum product scope 
mandated  by  the  Regulation  is  viewed  as  beneficial,  the  ability  to  then  vary  the  content  (in 
particular product scope) between VPAs is seen - once more licensing systems are operational - 
as having the potential to create additional complexity. Coherence is  also enhanced through the 

43 

 
 
existence of the minimum elements that all VPAs must contain (including a definition of legality 
aligned  with  EU  definition  and  product  scope).  But  the  precise  scope  of  VPAs  is  determined 
during  negotiation,  which  may  in  turn  has  the  potential  to  create  additional  complexity  for  EU 
MS CAs, customs authorities and EU operators.  

There  are  areas  where  coherence  has  not  been  sufficient  between  the  EUTR  and  FLEGT 
Regulation.  In  particular,  product  scope  varies  between  the  EUTR  and  the  VPAs,  which  may 
create  complexity  around  the  requirements  applying  to  different  imports  and  from  different 
source countries, once more licensing systems become operational. 

There  is  strong  evidence  that  FLEGT  licences  are  reducing  the  costs  of  timber  import  for  EU 
operators. Some EU operators would have a preference to import under FLEGT licences as costs 
are typically lower than those of compliance with EUTR DD. However, the limited availability of 
a FLEGT licenced timber and derived products is one of a number of variables which operators 
take into account when considering sources of imports. This has limited the ability of operators to 
take advantage of FLEGT licences and has restricted those able to reduce their EUTR compliance 
costs. 

Both the EUTR and FLEGT Regulation appear broadly coherent with wider EU policy although 
it  can  be  asked  if  they  are  still  fully  coherent  with  the  political  ambition  as  expressed  in  the 
European  Green  Deal and related  initiatives. The increased  ambition  around  climate  action  and 
fight  against  biodiversity  loss  poses  a  challenge  for  the  relevance  of  the  EUTR  and  FLEGT 
Regulation. The FLEGT Regulation as such remains coherent with EU trade policies and actions 
by the EU, supporting reforms that may contribute to promoting sustainable development, social 
and  safety  standards,  communities’  rights,  and  respect  for  the  environment.  Stakeholder 
consultations  did  not  raise  any  substantive  issues  surrounding  the  coherence  of  EUTR  or  the 
FLEGT Regulation with EU environmental policy. 

Both the EUTR and FLEGT Regulation appear broadly coherent with the international regulatory 
framework  such  as  CITES,  CBD  etc.  The  regulatory  scope  of  EUTR  and  FLEGT  partially 
overlaps with the objectives of CITES but differs in the broadness of scope and methodology for 
determining legality. Some issues have been identified between the Regulations and certification 
schemes  (e.g.  FSC/PEFC),  including  the  misuse  of  certification  and  questions  around 
transparency  and  chain  of  custody.  The  EC  have  commissioned  a  study  to  add  greater  clarity 
around these issues. 

Value added:   

There is evidence that the EUTR delivered beyond what would have happened without EU action, 
in  particular  through  enabling  cooperation  and  learning  across  MS  and  ensuring  wider  policy 
coherence. Action at EU level has created a level playing field for operators although the variety 
and  divergence  in  enforcement  at  national  level  with  respect  to  both  the  prohibition  and  due 
diligence systems have limited the ability of the EUTR to realise its full potential. 

There is evidence –based on the successful implementation of the VPA with Indonesia - that EU-
level action through the implementation of the FLEGT Regulation can provide added value above 
what  would  have  been  possible  at  MS  level.  However,  challenges  have  limited  the  ability  to 
achieve its full potential value added (namely that only one country has progressed to licencing). 

6.2 

6.2  Lessons learnt 

The  Fitness  Check  has  found  limited  evidence  on  the  effect  of  the  EUTR  and,  in  particular, 
FLEGT Regulation on global illegal logging and associated trade. A number of challenges  have 
been identified related to the implementation of the EUTR and, especially the FLEGT Regulation 
regarding  their  effectiveness  and  efficiency.  Nevertheless,  awareness  of  the  problem  has 
increased  and  internationally  the  fight  against  illegal  logging  has  gained  support,  resulting  in 
other countries adopting laws against the trade of illegally harvested timber. 

44 

 
 
 
EUTR 

  A  system  based  on  DD  such  as  the  EUTR,  if  improved  and  adapted  to  the  new  political 

context, could be fit for purpose.  

  The requirements operators have to meet under the EUTR need to be made clearer and easier 

to enforce hereunder in national courts to ensure compliance and an equal playfield.  

  Similarly, non-compliance also needs to be more clearly defined, so that operators and traders 

know when they are at high risk of being in non-compliance.  

  Additional elements such as a self-declaration submitted by the operators placing products on 
the EU market could help CAs in case of non-compliance, particularly in building solid court 
cases - one of the vital elements missing in the EUTR.  

  Sourcing risky products must come at a high economic cost for operators and their customers, 
and  repeated  offences  must  lead  to  increasingly  high  fines  or  severer  administrative 
procedures.  

  The DDS can be improved, inter alia through a better defined role for customs authorities and 

a clearer interplay between the latter and CAs.  

  The DD requirement can be implemented regardless of the size and activities carried out by 

the operator – from forest owners to international corporations.  

  DD seems to  place a greater burden on those  sourcing from  high-risk countries and dealing 
with  more  processed  products/products  using  multiple  raw  material  inputs  and  complex 
supply chains, particularly, when SMEs are concerned. 

  Regarding the design and application of DDS: 

o  There is limited understanding of the concept of DD. It still represents challenges in MS 
legal systems, in particular definitions at the core of DD (in EUTR’s case ‘negligible risk’ 
and ’adequate‘ risk mitigation). Additional tools, beyond DD as described in EUTR, might 
be necessary to overcome these difficulties. 

o  Even where DD is well understood, there are substantial challenges to fully validating the 

information collected to ensure it is trustworthy and free from corruption. 

o  Close cooperation between CAs and customs authorities is necessary. The role of customs 
could  be  strengthened  and  defined  more  precisely,  also  with  a  view  to  overcoming 
difficulties with building solid court cases. 
Improved information and guidance on DD is still necessary for operators and authorities, 
including prosecutors and courts across the EU. 

o 

o  More  precise  description  of  the  obligations  of  traders  and  the  related  actions  by  CAs  is 

necessary to avoid possible loopholes in the system. 

o  The product scope needs to be updated and made clearer regarding forest plants other than 

wood/timber and the inclusion of recycled and reused wood fibres. 

o  Monitoring organisations have not functioned as expected. 

FLEGT Regulation 

  Even though the effect of the FLEGT Regulation on combatting illegal logging and associated 
trade can be perceived as rather limited, since only one country (Indonesia) has an operating 
system and is issuing FLEGT licences, cooperation and the involvement of stakeholders with 
regard  to  combatting  illegal  logging  and  associated  trade  has  increased.  A  number  of 
challenges  have  been  identified  in  the  Fitness  Check  on  the  functioning  of  the  FLEGT 
Regulation and its implementation: 

o  The  design  and  process  for  negotiating  and  implementing  VPAs  have  kept  key  trading 

partners from engaging in VPA processes. 

o  VPA  negotiation  and  implementation  are  long  and  complex,  an  issue  compounded  by 
capacity  and  resource  limitations,  weak  governance  and  high  risk  of  corruption  in  many 
partner countries and lead to a negotiated framework that is challenging to change and/ or 
develop further. This limits the ability to achieve the objective of the FLEGT Regulation – 
in the short and medium term. 

45 

 
 
 
 
o  Up to present, only 1 out of 15 VPA countries – meaning those engaged in VPA process 
and  either having  ratified a  VPA or  being  in  the  phase  of  negotiations  -  has  managed  to 
establish  an  operational  TLAS  and  issue  FLEGT  license,  covering  only  a  fraction  of 
relevant trade (3%). 
In  case  of  VPA  partner  countries  without  an  operational  FLEGT  licensing  system 
(including those with ratified VPAs), it has been challenging for EU importers to exercise 
DD,  often  more  than  in  case  of  other  countries,  indicating  a  transparency  challenge, 
hampering also EUTR implementation. 

o 

o  Even when a licensing system becomes operational, the legal system in the partner country 
continues  to  be  subject  to  political  and  policy  changes.  The  tools  at  the  EU  disposal  to 
react are limited, especially in cases where a swift reaction is needed. 

  The  implementation  of  the  FLEGT  licensing  scheme  with  Indonesia  has  worked  well, 
although there have been some challenges. However, that can be attributed to the fact that the 
Indonesian  SVLK  is  fully  integrated  in  a  wider  reform  of  the  national  forest  governance 
system and not seen as an “add-on” only inspired by trade concerns. 

  There  are  a  number  of  challenges  regarding  the  FLEGT  Regulation.  While  the  EU  system 
itself  would  be  an  efficient  tool  to  lower  the  compliance  costs  for  EU  operators,  the  main 
instrument for its operationalisation i.e. the VPAs has not delivered. VPAs are complex and 
legally  binding  trade  treaties  concluded  for  a  single  commodity  and  derived  products, 
covering  also  labour,  social  and  human  rights  dimensions.  This  means  the  negotiations  are 
detailed  and  complex,  usually  taking years  to  finalize  and  implement  —  far  from  the  quick 
and flexible tool they were expected to become. Additionally, the EU lacks the leverage of its 
full  economic  weight  and  the  advantage  that  it  enjoys  when  it  negotiates broad Free  Trade 
Agreements. 

  The  EUTR  offers  flexibility  in  the  enforcement  system  to  adapt  to  key  changes:  e.g.  trade 
flows and export/import risk profiles of different countries, change in popularity of different 
products  and  wood  species,  and  adoption  of  technological  advances  that  can  help  better 
identify risk or aid implementation. The  FLEGT Regulation, however, offers less flexibility 
due to the nature of the system of VPAs an international agreements between the parties.  
  If  the  EUTR  were  to  be  repealed  without  a  system  to  replace  it,  the  risk  of  illegal  timber 
entering  the  EU  market  would  considerably  increase.  However,  by  covering  a  wider 
commodity  range  in  a  new  legislation,  this  issue  could  be  addressed  while  also  covering 
important  elements  of  sustainability.  In  contrast,  if  the  FLEGT  Regulation  were  to  be 
repealed, it would free considerable resources - not only financial but also human - currently 
dedicated  to  negotiating  VPAs  or  monitoring  their  implementation.  Those  could  be  used  in 
the context of a different, new approach that addresses the issue more effectively and more 
efficiently. The availability of these resources is particularly important now that the EU has to 
collaborate with other countries to halt deforestation. 

Annex 1 

46 

 
 
 
 
 
 
 
ANNEX 1: PROCEDURAL INFORMATION 

Figure 1: Changes introduced to the Fitness Check 

RSB meeting comments 

Reflection in text 

The  report  does  not  sufficiently  identify  the 
benefits  of  both  Regulations  in  view  of  their 
high  costs  and  their  limited  effectiveness  to 
date.  

The report does not draw clear conclusions on 
whether the Regulations are ‘fit for purpose’. It 
lacks  clear  take-aways  for  future  decision-
making. 

inventory  and 

forest 
improved 

The report now further explains the benefits 
in section 5.1 and 5.2: improved governance 
systems  in  third  countries;  improved  forest 
management, 
law 
transparency  and 
enforcement; 
more 
increased 
pressure  on  all  actors  along  the  supply 
chains;  increased  awareness  of  the  issue; 
enhanced stakeholder participation; inspiring 
other countries to fight illegal logging. 

information 

available; 

found 

logging 

limited 
The  Fitness  Check  has 
evidence  on  the  effect  of  the  EUTR  and,  in 
particular,  FLEGT  Regulation  on  global 
illegal 
trade. 
and 
Challenges  related  to  the  implementation  of 
the  EUTR  and,  especially 
the  FLEGT 
Regulation  regarding  their effectiveness  and 
efficiency that have been identified are listed 
in 6.2. under Lessons Learnt. 

associated 

On top of the above listed main recommendations of the RSB, the amended SWD also addresses 
the  more  detailed  set  of  comments  made  by  the  RSB  in  Section  C  -  What  to  improve  -  of  its 
opinion in the relevant sections of the impact assessment:  

The  report  should  better  explain  the  main 
driving factors behind the limited effectiveness 
of  the  Regulations.  It  should  explain  the 
relative importance of each of these factors and 
indicate  to  what  extent  they  are  within  EU 
and 
regulatory 
(e.g. 
control 
implementation failures). 

design 

The report should bring out the ‘fitness check’ 
angle of the evaluation more clearly and better 
indicate  what  links  exist  between  the  two 
synergies, 
terms 
Regulations 
complementarities,  overlaps  or  streamlining 
potential (e.g. for monitoring or enforcement). 

of 

in 

the  EUTR, 
and 

those  are  a 
information 

The main problems are listed in section 5.1; 
lack  of 
for 
cooperation 
exchange 
between CAs and customs authorities as well 
as  the  application  of  DD;  for  the  FLEGT 
Regulation,  they  are  weak  governance  in 
partner  countries,  absence  of  political  will 
and  lack  of  economic  incentives  (see  also 
Box 3) as well as corruption. 

The report explains that few synergies exist; 
e.g.  costs  for  operators  under  the  EUTR 
decrease if they can find and source FLEGT-
licensed timber (5.1). 

47 

 
 
 
 
or 
should 

types  of  benefits 

The  report  should  better  demonstrate  the 
that  both 
different 
unintendedly 
intendedly 
Regulations 
produced.  The 
explore 
report 
(qualitatively  if  quantified  evidence  is  not 
available)  to  what  extent  illegal  logging  has 
been  reduced  because  of  benefits  such  as 
increased 
forest 
governance  in  wood-producing  countries.  The 
the 
report  should  explain  better  whether 
benefits outweigh the costs of the Regulations. 
It  should  indicate  what  the  potential  is  for 
reducing  the  high  compliance  and  operating 
costs of the Regulations. 

awareness 

better 

and 

The  different  types  of  benefits  are  now 
described in more detail in 5.1 and 5.2. Their 
roles  in  reducing  illegal  logging  through 
raising  awareness,  enhanced  stakeholder 
participation  and  improved  governance  is 
described in 5.2. The report clarifies that the 
benefits outweigh the costs of the EUTR but 
not of the FLEGT Regulation (5.2). Also, the 
potential for cost reduction is now described 
in  greater  detail:  in  case  of  the  EUTR,  a 
revised  DD  system  and  better  cooperation 
between  authorities  would  be  more  cost-
efficient (6.2); as for the FLEGT Regulation, 
DD  costs  could  decrease  if  more  countries 
had 
system, 
however, 
improvement  would  be 
outweighed  by  development  costs  which 
would remain disproportionately high (5.2). 

an  operational 
this 

licencing 

In  view  of  possible  unintended  consequences 
such  as  ‘leakage’,  the  report  should  indicate 
whether  complementary  measures  might  be 
necessary  to  fight  deforestation  worldwide 
based on the evaluation findings. 

The report identifies possible complementary 
measures  on  the  basis  of  the  EUTR’s  DDS. 
The problem of leakage can be addressed by 
working 
together  with  other 
consumer countries (6.1). 

closely 

The  conclusions  should  make  a  more  critical, 
evidence-based 
the 
Regulations  have  performed.  They  should 
clarify to what extent they remain relevant and 
draw clearer lessons for policy-makers. 

judgement  of  how 

The  report  should  dedicate  more  attention  to 
the  issue  of  data  limitations  and  draw  lessons 
for future data-collection as a way to facilitate 
better  measurement  of  the  degree  of  future 
success of both Regulations. 

Section  6.2  on  lessons  learnt  was  revised 
with several additions that clearly list lessons 
for  policy-makers.  The  EUTR  remains 
relevant  and  the  DDS  has  proven  to  be 
promising in terms of both effectiveness and 
efficiency.  Whereas  the  FLEGT  Regulation 
should be repealed due to its key instrument, 
the VPAs, having had very limited impact on 
illegal  logging  and  the  connected  trade, 
entirely  outweighed  by 
immense 
procedural  costs  as  detailed  in  5.1,  5.2  as 
well as 6.2. 

its 

The issue of data limitations is addressed in 
5.2 

48