Managing and controlling timber as well as timber products enter into VNTLAS

1. An overview of Vietnam’s timber import situation from 2015 to 2017

According to the analysis of VIFORES, FPA Binh Dinh, HAWA and Forest Trends from customs data (Vietnam Timber and Timber Products Import and Export – 3/2018):

• Currently, Vietnam imports timber from 119 nations and territory. Nations from Africa, China, The United States of America, EU and Cambodia are the key market that provides timber and timber products for Vietnam.
• The value of imported timber: average in every year, 2015, 2016, 2017 is 2.05 billion USD
• About 400 species were imported, however, 60 of them are not identified correctly.
• The wood-processing industry, in 2017, in total used about 38.4 million m3 of timber, in which 7.7 million m3 for the domestic market and 30.7 m3 for export markets VIFORES (2018).

2. Scope of the impact of the management and control of imported timber and wood products

• Management agencies: Customs, Forest Protection … control the origin of timber according to the currently imported dossier.
• Organizations, individuals import timber: apply consistently on all importers (including import to process, domestic trading or export into EU market)

3. Current regulations on managing imported timber.

Currently, according to Customs risk assessment system, the specific percentage of the checking within each shipment is from 5% to 100% of the volume of the shipment and depends on the decision by the head of the customs post

4. Regulations on managing imported timber after VPA validated

4.1. Managing imported timber based on risks

The control and management of imported timber to Viet Nam is subject to legislation and regulations described in Principle III of Annex II (Organisations and Households) and the following three risk-based verification filters and measures shall apply:

1. Customs risk assessment system;
2. Species risk categories;
3. Risk associated to geographic origin of timber.

The use of the above three filters shall determine:

i) The need for additional physical checks;

ii) The need for additional documentation to demonstrate legality of imported timber. The procedures for the control and management of timber imported to Viet Nam are shown in Figure 3 of this Annex V.

Customs risk assessment system

Species risk categories

Importers shall be required to declare species name (including scientific name and common name) in the importation process. In case of any doubt on the species declaration, inspection shall be conducted by the competent Vietnamese technical authority to confirm species identification.

Imported timber species shall be classified into 2 groups: high risk and low risk, based on the following criteria:

• High risk species are defined as those listed in Appendix I, II, III of CITES; critically endangered, precious, and rare species in Group IA and IIA according to legislation of Viet Nam on controlled timber species; and species illegally traded according to the FPD database of violations of the Law on Forest Protection and Development and the database of the Customs authority of Viet Nam.

The Joint Implementation Committee (JIC) shall consider additional species which are at risk of being endangered in the country of harvest or illegally traded, as officially proposed by Viet Nam or the EU to the JIC, or based on information from the United Nations Organisation for Drugs and Crimes (UNODC), Interpol, CITES Secretariat, or World Customs Organisation (WCO), for inclusion on the list of high risk species.

Species which are imported into Viet Nam for the first time shall be considered as high risk unless otherwise decided by the JIC. Complex timber products that combine both high risk and low risk species shall be treated as high risk.

• Low risk species are defined as those not belonging to the above category. The applied criteria and methodology shall result in a list of high risk species that shall be reviewed, supplemented and adjusted during implementation of the Agreement and decided by the JIC during its meetings.

Based on the decision of the JIC, the Ministry of Agriculture and Rural Development shall issue a legislation presenting the list of high risk species that shall be updated periodically as required according to decision of JIC. The Customs authorities shall take into account this legislation to change their procedures regarding the obligation of importers to provide additional documentation for timber import as defined in Table 4 of this Annex V.

Risk associated to geographic origin of imported timber

Information on legal requirements for timber export in the country of origin shall be taken into account in the risk-based approach to assess the legal origin of imported timber.

The risk associated to geographic origin of imported timber shall be considered in the control and management of timber imported to Viet Nam.

Countries are considered low risk if:

1. a) They have an operative TLAS in place issuing FLEGT licences; or
2. b) They have binding national regulatory frameworks on due diligence for timber legality covering the whole supply chain to the country of harvest recognized by Viet Nam as meeting the VNTLAS criteria; or
3. c) The indicator for effectiveness of government according to the World Bank Worldwide Governance Indicators (WGI) is from 0 and above, and a regulatory system for CITES implementation is rated I-level as announced by the CITES Secretariat, and one of the two following are met:

(i) Viet Nam has a bilateral agreement on timber legality with these countries, recognized by Viet Nam as meeting the VNTLAS criteria provided that these agreements have been published, or (ii) Countries have a national regulatory timber certification schemes recognized by Viet Nam as meeting the VNTLAS criteria.

The applied criteria and methodology shall result in a list of low risk countries and territories that shall be reviewed, supplemented and adjusted during implementation of the Agreement and brought to the attention of the JIC during its meetings.

The Ministry of Agriculture and Rural Development shall issue a legislation presenting the list of low risk countries that shall be updated periodically as required according to decision of JIC. The Customs authorities shall take into account this legislation to change their procedures regarding the obligations of importers to provide additional documentation for timber import as defined in Table 4 of this Annex V.

4.2. Risk-based control and management of timber imports

According to the criteria for risk management in the three above mentioned systems, timber imported into Viet Nam is controlled and managed by the Customs authorities as described in the Figure 3. The Customs authorities shall carry out systematic documentary checks for imported timber on the basis of the following documents:

1. Applicable Customs documentation, and
2. Self-declaration, including any relevant additional documentation, or
3. Valid CITES permit, or valid FLEGT licence.

The risk-based control and management of timber imports to Viet Nam is presented in Table 4.

One of the following three alternative ways to demonstrate legality of imported timber is required:

1. Valid FLEGT licence or equivalent export licence covering the entire shipment from an exporting country which has concluded a VPA with the EU and has an operational FLEGT licensing system in place; or
2. Valid CITES permit covering the entire shipment; or
3. A Self-declaration demonstrating due diligence and additional documentation according to the risk categories status of the imported timber as specified in Table 4 of this Annex V.

The controls described in this section apply to all customs declarants including Organisations and individuals as defined by Viet Nam customs regulations, and Organisations and Households as defined under VNTLAS.

5. Responsibilities of relevant actors

5.1. Responsibilities of Government agencies

a) Reception, entry and archiving of supply chain declarations by Organisations and Households.

b) Systematic, random and ad hoc physical inspections, particularly on the basis of the analyses of supply chain data.

c) Analysis of data to provide for volume-based reconciliations between:

• Quantitative data at different stages of the supply chain as identified in Section 6.2;
• Quantitative data of suppliers and buyers;
• Data declared by Organisations and Households and the physical batch of timber;
• Input and output analysis at processing sites;
• Organisations and Households in the context of investigations of suspicious timber flows.

d)Verify and endorse information in input and output monitoring books of Organisations handling timber from domestic natural forests.

e) Inspect input and output monitoring books of Organisations as a part of systematic inspection and a part of ad hoc inspection on suspicion of risk.

5.2. Responsibilities of Organisations and Households

• Organisations and Households shall take responsibility when sourcing timber to ensure that only legal timber enters the supply chain, including when sourcing timber domestically, and shall exercise due diligence when souring imported timber, as specified in Section 4.4 of this Annex V.
• Organisations and Households are responsible for documenting and reporting timber inputs and outputs, complying with reporting requirements to the relevant Government agencies as stipulated by the legislation and regulations, in order to allow for volume based reconciliation and identification of suspicious timber flows as stipulated in Section 6.6.2 below. These responsibilities are specified in Appendix 2 of this Annex V.

Source: VPA/FLEGT