Verified legal?: Ramifications of the EU Timber Regulation and Indonesia's Voluntary Partnership Agreement for the Legality of Indonesian Timber

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The recent entry into force of the EU Timber Regulation (EUTR) completes the EU's policy framework designed to curb trade in illegal timber. In light of the imminent ratification of a Voluntary Partnership Agreement (VPA) between the EU and Indonesia, the Timber Regulation raises questions about the role that Indonesia's timber legality assurance system—the SVLK—will play in securing access for Indonesian timber to the European market. We performed a regulatory analysis and found that the SVLK will serve as the basis for licensing direct exports of timber to the EU under the VPA, but that it has weaknesses which the VPA may be unable to address. The Timber Regulation, which requires due diligence for timber imports, might have helped address these weaknesses, but it explicitly excludes VPA timber from these requirements. However, trade data indicates that the size of the timber trade that the VPA will govern is not large. Further, the Regulation will apply to Indonesian timber that enters the EU via third countries. Its ability to address gaps in the SVLK as regards this timber depends on two contingencies: (1) whether the SVLK meets the Timber Regulation's certification scheme reliability criteria; and (2) whether the due diligence provision can be construed as permitting regulators to demand proof of legality beyond certification. We argue that the EUTR will continue to play an important role in regulating imports of Indonesian timber even after the VPA is ratified.

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