FLEGT stands for Forest Law Enforcement, Governance and Trade. The program has been created to provide countries with proven track records in good forest management greater and easier access to the European timber market under the new legality regulations.
If you look at all of it as a single market, the EU is one of the largest consumers of timber products in the word. Just as with American companies working internationally, the behavior of European companies purchasing wood and wood products overseas can have a significant impact on illegal logging. If a foreign company unwittingly buys illegal wood, then this undermine everyone's efforts to enforce the forest laws in many wood-exporting countries.
So to comply with the new law, EU operators must risk-assess their products and evaluate if their products have been produced in compliance with laws of each harvesting country. This can be a country-based or a company-based review. In either case, if the outcome is that there is a risk of the timber being illegal, then the purchaser has to establish risk mitigation procedures. However if the timber is of negligible risk of being illegal, there is no need to set up risk additional mitigation procedures.
FLEGT is supposed to help an importer evaluate a company. If the country has joined FLEGT and been approved by the program, then that country then evaluates individual companies and gives them licenses to export. Buyers can purchase from those companies knowing that they have already been officially reviewed and determined to be low risk.
As the program's site states, "the EU FLEGT Action Plan sets out actions to prevent the import of illegal wood into the EU, to improve the supply of legal timber and to increase demand for wood coming from responsibly managed forests. The long-term aim of the Action Plan is sustainable forest management."
A simple way to look at it is as if you were entering the country and wanted to pass through the Green Lane, with "Nothing to declare" or the Red Lane with "Something to Declare." Countries that join and get approved within the FLEGT system will be able to have their products enter the EU through the Green Lane, with reduced scrutiny and reduced burdens on their exporters and importers. There is no equivalent for Lacey in the U.S. at this time.
There are currently six countries developing the systems required under a Voluntary Partnership Agreement (VPA) to join FLEGT. There are six other countries that are negotiating participation terms with the EU. Furthermore, there are about 15 countries from Africa, Asia and Central and South America that have expressed interest in VPAs. The United States is not one of them. On the other hand, the EU and China have started a policy dialogue on forest governance and related developments and China may apply to the FLEGT program in the near future.
