EUTR: The European Lacey?

Lacey has been in the news again recently-with the vote Gibson settling with the government, but it's important to note that it is not the only legality law out there. The Europeans have new import regulations due to go into effect next year. If you want to read the full law, go here.

But if the legalese makes your eyes cross, an EXCELLENT summary of it is available from the good folks at TFT. If you're selling anything into Europe, or just want to compare the European approach to "Lacey issues," click through and read their material.  

For this blog, I'll just pull out a few ways Lacey and the EU Timber Regulation (EUTR) differ. Two key differences are:

1. The EUTR requires "operators" (companies who first enter/sell their wood products in Europe and which would include both importers and domestic manufacturers) to have a due diligence program in place within their company. Lacey, on the other hand, encourages such a program, but does not specify the nature of it nor does the government check if a company has such a program in place.

2. The EUTR regulation distinguishes between different players in the market and assigns them different responsibilities and potential punishments. The burdens of due diligence differ between the "operator" and those downstream. Those downstream, such as retailers and distributors, must track who they purchased their products from and where they sold-normal business practices of one up and one down record keeping. If illegal material is found in the supply chain, the government can trace the material back to whoever first brought it to market, but will not punish innocent companies who are multiple steps away from the original crime. This is very different from Lacey, where any company, or even the final consumer, can be held liable for the illegal nature of the wood, no matter where the illegal action occurred.

The EU is currently leaving the level of penalties to be established by each individual member country. However, penalties may include:

• Immediate suspension of authorization to trade
• Seizure of the wood products concerned
• Fines proportional to the damage resulting from the infringement.

So American wood companies-offering lumber, veneer, flooring or other wood products-interested in exporting to the EU next year should familiarize themselves with the EUTR and begin preparing their documentation and procedures.