As the representative trade association of one of the world’s largest hardwood exporting industries, the American Hardwood Export Council (AHEC) has a considerable stake in eradicating illegal wood from trade. A major concern for AHEC is that neither the value nor the reputation of legally harvested products is undermined in world markets by competing products from illicit sources.

For this reason, AHEC was a leading supporter, through membership of the US Hardwood Federation, of the US Lacey Act Amendment of May 2008. This makes it an offence within the US to possess any plant (excluding agricultural crops but including wood and derivative products) "taken, possessed, transported, or sold" in violation of any relevant foreign or state law.

AHEC has also been closely involved with, and fully supports, the efforts by the European Union to enforce the EU Timber Regulation from March 3, 2013. This regulation imposes mandatory requirements on companies that "first place" forest products on the EU market to implement a due diligence system to minimise the risk of illegal wood entering the EU. Any such company failing to demonstrate due diligence, or found to have placed illegally harvested wood on the EU market, is subject to legal sanction.

Tough sanctions
A key strength of the EUTR is that while it establishes tough sanctions for any failures in due diligence, it is flexible on the mechanisms by which legality may be demonstrated. This responds to the reality of complex international supply chains and highly variable regulatory systems in timber supplying countries.

Under the EUTR, the importer’s due diligence system must "provide access to documents or other information indicating compliance of those timber and timber products with the applicable legislation". No specific requirements are established for the types of documents and other information most appropriate to meet this obligation. However, they must be of appropriate quality, credibility and scope to allow the EU importer to determine that a timber product is of negligible risk in terms of illegal supply.

In the case of US hardwoods, this requirement is satisfied through the comprehensive "Assessment of Lawful Harvesting & Sustainability of US Hardwood Exports" commissioned by AHEC and undertaken by Seneca Creek Associates, a team comprising well-regarded and independent analysts and experts in the field of US forest policy and forest certification. The Seneca Creek team compiled detailed information on the scope, effectiveness and enforcement of federal, state, and local regulatory programmes across all the US hardwood-producing states.

The Seneca Creek assessment remains the only comprehensive sector-specific and peerreviewed study to quantify the risk of any wood being derived from a controversial source, including illegal harvesting, in line with both the FSC Controlled Wood standard and the PEFC Chain of Custody standard.

The Seneca Creek study demonstrates that there is less than a 1% risk of any illegal wood entering the US hardwood supply chain. This result emerges from the robust institutional framework for hardwood forest management in the US, which combines clear and fully enforced property rights, multi-generational family forest ownership, respect for the rule of law, and a strong civil society. All US trading companies are also subject to the rigours of the Lacey Act, further mitigating any perceived risks that may be associated with sourcing US hardwood products.

Drawing on the Seneca Creek study, together with recent analysis of other data sources such as the Transparency International Corruption Perceptions Index, the FSC Global Risk Register concludes that the US is low risk against all four FSC Controlled Wood criteria established for legality. This conclusion is currently undergoing further review as part of the ongoing process to prepare an FSC Controlled Wood National Risk Assessment for the US.

The EC Guidance on the EUTR indicates that credible third-party studies like the Seneca Creek assessment, and independent sources such as the FSC Risk Register, where these demonstrate negligible risk of illegal logging in specific regions or for specific product groups, are an appropriate form of documentation for EU importers to meet their legal obligations.

AHEC guidance
While the EUTR places the due diligence obligation firmly on the importer, AHEC has prepared specific guidance for its members to ensure that they are fully briefed on the EUTR obligations and therefore better able to assist their EU customers. It can be downloaded at http://americanhardwood.org/EUTR.

AHEC believes that, if properly enforced, the legislation should play a major role to level the playing field for responsible suppliers of timber into the EU – and it should demonstrate the strong environmental credentials of wood compared with non-wood materials.

"The EUTR is an opportunity to highlight the leadership role of the timber sector to develop genuinely sustainable supply chains," said AHEC European director David Venables. "With passage of the EUTR, the industry will be the first major materials sector able to demonstrate that 100% of raw material supplied into the EU is low risk of being illegally sourced."

UK highest value export market
AHEC’s statistics show that, while US hardwood lumber exports to Europe declined overall in 2012, there were bright spots. Particularly notable was the 9% rise in exports to the UK, to 76,900m3. Exports to this market were valued at US$57.7m, meaning that the UK overtook Italy (US$55.5m) to become the highest value European market for US hardwoods.

Much of the recent growth in US hardwood exports to the UK comprised tulipwood, with good demand for it in the kitchen cabinets sector. Demand for ash also recovered quite well last year, while exports of American white oak remained stable compared to 2011. White oak remains the mainstay of the UK trade in US hardwoods, accounting for nearly 50% of volume.

"In these turbulent times it is encouraging to see an increase in imports of US hardwoods into the UK and particularly the increase in tulipwood, which we have been working hard to promote," said AHEC European director David Venables. "It is extremely abundant and a high performance timber so we’re pleased to see the British timber industry is utilising the resource."