How Ukrainian wood exporters can comply with EUDR/EUTR requirements to avoid illegal timber trade?

Currently, Ukrainian exporters may not adhere fully to the European Union Timber Regulation (EUTR) requirements, who often cite their compliance with national legislation. These issues primarily revolve around the significant risks mentioned in Competen Authorities Conclusions associated with sanitary cutting practices and the absence of clear connections between forest sources and warehouse storage for round wood used in production.

To address these and other risks, we recommend that Operators take specific steps to mitigate them. For instance:

A. Requested Information from Operators for Verification:

It is recommended that the Operators gather from the Sellers/Manufacturer (Ukrainian exporters) and provide the following information for verification, in the form of electronic copies:

1. An Invoice with a Packing List, specifying the stated XX1 amount of product in cubic meters.

2. Copies of Timber Transportation Tickets (TTT-forest) or Waybills, clearly indicating the XX2 volume of round timber in cubic meters purchased by the Manufacturer for the production of the XX1 volume of product declared in the Packing List.

3. Copies of Official Permits (Logging Tickets) issued for the forest units from which the XX2 volume of round wood was harvested. This is essential for understanding the origin of the purchased timber.

4. A Declaration from the Wood Suppliers, connecting each Waybill with the corresponding Logging Ticket. A standard table format for this is available for download in English and Ukrainian.

5. Contracts for wood purchasing signed between the Manufacturer and the Wood Supplier, specifying the list of species, volume, and other characteristics of the purchased wood round logs.

6. Additionally, it would be beneficial to obtain a Certificate from the Manufacturer outlining the output rate of manufactured wood products (e.g., flooring, XX1) from the unit of procured round wood (XX2). This certificate should indicate the balance of round wood consumption (in cubic meters) for the production of one cubic meter of the finished product, accounting for different grades of wooden logs used for production. 

7. At the later stage the third party verificator might request more documented evidence if there are some questions about the Supply Chain and applied harvesting types.

B. Risk Evaluation and Mitigation:

Based on the information provided by Operators, the third party verify it and evaluate the identified risks. The Operators should plan and adopt Mitigation measures to address the identified risks. Based on the expiriance they could be: 

1. In cases where clear links between reported Waybills and Logging Tickets are absent it is recommended to request missing information from Wood Suppliers through the Sellers/Manufacturer and complete the aforementioned table. This information is vital to verify the origin of timber and to facilitate future checks on harvesting sites when the EUDR comes into effect. 

2. Additionally, when Sanitary Cuts are identified as the source of timber for Manufacturers, it's important to recognize that the Supplier's assertion aligns with Ukrainian national legislation. 

However, it's crucial to note that the EUTR decision on Ukraine is explicit about this matter, noticing that sanitary type of logging, along with other non-commercial cut types, is categorized as a high-risk logging practice.  

The "Annex to EUTR CA’s Concusion on Ukraine" document outlines specific risk mitigation measures, which can be summarized as follows: 

"To prevent timber from sanitary logging from being mixed into your lot, especially if the end use is not for firewood, it's vital to consider that proper documentation of sanitary logging is extremely challenging. Therefore, we strongly recommend leveraging various sources of information to validate the necessity and justification of such logging. This may include photographic documentation of the area before and after harvesting and involving local non-governmental organizations (NGOs) to verify a legitimate need for preventive measures, including sanitary logging. Without some form of independent documentation demonstrating the requirement for sanitary logging, there exists a substantial risk of sourcing illegally harvested timber supported by fraudulent documentation, irrespective of the timber species. Particular attention should be given to high-value timber species originating from sanitary logging, for which widespread irregularities are not reported."

Thus, we recommend obtaining additional evidence substantiating the necessity of the sanitary cut, and this evidence should extend beyond the documentation provided by foresters. 

In Conclusion:

1) At the moment, some Operators decide that provided documentation sets are enough to back up the output of the obtained product loads from the Ukrainian exporters and to comply with EUTR based on the verification risks that are identified by third parties and the mitigation efforts they decide are appropriate in their circumstances.

2) Nevertheless, it remains the responsibility of Operators to collaborate with Sellers/Manufacturers capable of collecting necessary information that establishes a clear connection between their products and the forest harvesting sites (this linkage will be crucial when the EUDR enters into effect through the need to supply the geographical coordinates) and proves no high-risks outlined in EUTR СА decisions on Ukraine. Achieving this can be facilitated either by implementing their own data collection systems (DDS) or with help of Ukrainian governmental support (e.g. improved Electronic Timber Tracking System managed by Ukrainian State Forest Resource Agency). 

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For more comprehensive information, please refer to our publication in ENG and UKR.