# **DETECTING ILLEGAL TRADE PRACTICES BY ANALYZING DISCREPANCIES IN FOREST PRODUCTS TRADE STATISTICS: AN APPLICATION TO EUROPE, WITH A FOCUS ON ROMANIA**

## **TABLE OF CONTENTS**

|**1**|**INTRODUCTION..................................................................................................................1**|
|---|---|
|**2**|**DATA ON TRADE STATISTICS DISCREPANCIES ......................................................2**|
|2.1|THEEFI/WFSE TRADEFLOWDATABASE................................................................................2|
|2.2|ARELATIVE MEASURE OF DISCREPANCIES IN TRADE STATISTICS...............................................3|
|**3**|**DESCRIPTIVE ANALYSIS .................................................................................................4**|
|3.1|ROMANIA AS AN EXPORTER OF SAWNWOOD..............................................................................4|
|3.2|ROMANIA AS AN IMPORTER OF SAWNWOOD..............................................................................6|
|**4**|**A THEORETICAL MODEL OF TRADE STATISTICS DISCREPANCIES ..............10**|
|4.1|COMPONENTS OF TRADE STATISTICS DISCREPANCIES..............................................................10|
|4.2|FACTORS AFFECTING THE COMPONENTS..................................................................................11|
|4.3|IMPLICATIONS FOR OBSERVED DISCREPANCIES INROMANIA...................................................11|
|**5**|**ECONOMETRIC ANALYSIS............................................................................................12**|
|5.2|ESTIMATION PROCEDURES.......................................................................................................16|
|5.3|RESULTS..............................................................................................................................17|
|5.4|ESTIMATING THE IMPACT OF UNREPORTED TRADE ONROMANIAN DISCREPANCIES.................21|
|**6**|**CONCLUSIONS...................................................................................................................21**|
|**LITE**|**RATURE CITED....................................................................................................................24**|
|**APP**|**ENDICES**<br>**..............................................................................................................................25**|
|APPE|NDIX1:<br>DEFINITIONS OF SAWNWOOD IN THEEFI/WFSE TRADEFLOWDATABASE...........25|
|APPE|NDIX2:<br>IMPORTERS OFNCSAWNWOOD FROMROMANIA IN THEEFI/WFSE TRADEFLOW<br>DATABASE............................................................................................................26|
|APPE|NDIX3:<br>IMPORTERS OFCSAWNWOOD FROMROMANIA IN THEEFI/WFSE TRADEFLOW<br>DATABASE............................................................................................................27|
|APPE|NDIX4:<br>COUNTRIES CONSIDERED TO BE“EUROPEAN” .......................................................28|
|APPE|NDIX5:<br>EXPORTERS OFNCSAWNWOOD TOROMANIA IN THEEFI/WFSE TRADEFLOW<br>DATABASE............................................................................................................29|
|APPE|NDIX6:<br>EXPORTERS OFCSAWNWOOD TOROMANIA IN THEEFI/WFSE TRADEFLOW<br>DATABASE............................................................................................................29|
|APPE|NDIX7:<br>AMODEL OF TRADE DISCREPANCIES DUE TO INTENTIONAL UNDERREPORTING.....30|
|APPE|NDIX8:<br>ADDITIONAL ECONOMETRIC RESULTS...................................................................32|