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Published on 24th September, 2018
by Stuart Cochrane

Guidance on buying and selling timber in a Brexit no-deal scenario

The Department Environment, Food and Rural Affairs published a number of papers on the 24th September 2018 which offer guidance to industry in the event of a “no deal BREXIT scenario”. One of these papers provides guidance on the buying and selling of timber.

Current legislation

Currently and up to the 29th March 2019 timber supply chains are regulated under the EU Timber Regulation (EUTR), to ensure harvesting practices are legal and support global forest governance. Businesses placing timber on the EU and EEA market for the first time (known as operators) must take steps to ensure they originate from legal sources by exercising due diligence. This applies to both imported and domestically produced timber.

Obligations also exist under the regulation for those business trading products within the EU and EEA market that are already placed on the internal market. Record keeping to ensure readily accessible information of who they buy timber from and who they sell it to.

Some countries exporting timber that have operational FLEGT licensing systems in place under voluntary partnership agreements (VPAs) with the EU which means under the EUTR, no further due diligence is required by the organisation first placing the product on the internal market.

Currently only Indonesia has a VPA in place, and imports must be accompanied by a FLEGT licence. A FLEGT licence confirms products comply fully with the relevant laws of that country.

Other restrictions can apply to timber, including the requirement for a permit to trade certain species under the EU Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) regulations. Currently there is no need for EU importers holding such permits to undertake additional due diligence on this timber.

After 29th March 2019 if there’s no deal

When the UK leaves the EU, EU law will no longer apply and the UK will implement its own UK timber regulation and UK FLEGT regulation. Although this will have the same requirements as the EUTR and EU FLEGT regulations, as part of The Great Repeal Bill, in a ‘no deal’ scenario, businesses importing timber from the EU and EEA and placing it on the UK market would have to exercise due diligence to demonstrate that they are importing legally harvested timber.

This represents a change from the current situation where products imported from the EU and EEA would see a company hold trader status .

Due diligence would involve:

  • gathering information on timber, including its species, quantity, supplier, country of harvest and compliance with applicable legislation
  • assessing the risk of timber being illegal, applying criteria set out in the regulation
  • mitigating any identified risk, by obtaining additional information or taking further steps to verify legality

This is what businesses currently have to do when they import timber from the rest of the world. This is also what businesses currently have to do when placing timber produced within the UK on the UK market for the first time.

There will be no changes for businesses importing from outside the EU, UK producers first placing on the market, and internal UK trade. As before, they will need to exercise due diligence to confirm the timber is legally harvested.

When the UK leaves the EU, it will implement its own UK CITES regulation. Timber covered by a permit under the CITES regulations will be considered to comply with the requirements of EUTR, so UK importers will not need to undertake due diligence on this timber.

The government is working to ensure FLEGT licenses continue to be recognised in the UK in a ‘no deal’ scenario. FLEGT licences will continue to be verified by the Office for Product Safety and Standards.

UK companies exporting timber and timber products to the EU and EEA

To continue to comply with the EUTR, EU and EEA businesses would be required to apply due diligence to imports from the UK. As a result, it is likely that UK-based exporters would need to provide relevant documentation about the source and legality of their timber exports to EU and EEA-based importers to enable their customers to meet their due diligence obligations under the EUTR.

These due diligence systems would vary business by business. The documents UK businesses should provide will need to allow EU importers of UK products to fulfil the due diligence requirements of the EUTR given above. EU and EEA businesses importing timber from the UK that is covered by a CITES import permit will not need to conduct due diligence. For any UK exporter whose timber supply chains are wholly within the EU, and have not previously been required to exercise due diligence on their timber inputs this will represent a significant change.

Trading timber within the UK

Traders must continue to keep a record of who they buy timber from and sell timber to.

Enforcement of the UK timber regulation

The way in which the EUTR is enforced would stay the same as now. The Office for Product Safety and Standards would continue to check that appropriate records are maintained by businesses and there would be no additional action businesses need to take at the border as a result of the changes relating to the EUTR.

Monitoring organisations

Monitoring organisations established in the UK would automatically continue to be recognised by the UK and will remain able to carry out their function for the purposes of the UK timber regulation. Monitoring organisations established outside of the UK would not automatically continue to be recognised by the UK in a ‘no deal’ scenario. The EU has indicated it will no longer recognise monitoring organisations based in the UK in a ‘no deal’ scenario.

A scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome.

UK Government statement

As March 29th 2019 approaches preparations for a ‘no deal’ scenario have been accelerated. The UK Government’s position is that such an acceleration does not reflect an increased likelihood of a ‘no deal’ outcome. Rather it is about ensuring plans are in place in the unlikely scenario that they need to be relied upon.

This series of technical notices sets out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations. This guidance is part of that series. Also included is an overarching framing notice explaining the government’s overarching approach to preparing the UK for this outcome in order to minimise disruption and ensure a smooth and orderly exit in all scenarios.

Further information

Guidance for the current regulations explains how to comply with the legislation and the role of the Office for Product Safety and Standards, which enforces the regulations.

A list of the products to which the regulation applies is also available.

This notice is meant for guidance only. You should consider whether you need separate professional advice before making specific preparations.


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