FLEGT licences from Indonesia

FLEGT-licensed products from Indonesia

When will Indonesia begin shipping FLEGT-licensed products?

Indonesia began shipping FLEGT-licensed products on 15 November 2016. Products covered by Indonesia’s timber legality assurance system and issued with export licences after 15 November 2016 must be accompanied by FLEGT licences, not V-Legal Documents, if they are exported to the EU.

What products does the Indonesian FLEGT-licensing scheme cover? How do the types of products compare with the types of products covered by the EU Timber Regulation?

Products covered by the Indonesian FLEGT licensing scheme include all those for which the EU Timber Regulation (EUTR) requires due diligence. You can check the products covered by the EUTR here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32010R0995

In addition to the minimum requirements of the product scope of a VPA, the Indonesian FLEGT licensing scheme also covers furniture, fuel wood, wooden tools, wooden packing material, builders' joinery and carpentry of wood, wood pulp, paper and paper products, kitchen and tableware, and other products. See the revised Annex I of the Indonesia-EU Voluntary Partnership Agreement (VPA) for details: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015D1158

The VPA also describes products that cannot be legally exported from Indonesia, such as logs and large dimension sawn timber. These products cannot be FLEGT licensed.

Products made from rattan or bamboo (non-wooden materials), or paper made from recycled material, are excluded from the VPA and the FLEGT licensing scheme because they are not covered by the timber legality assurance system. Note, however, that products from rattan or bamboo can fall under the scope of the EUTR.

Do I need a FLEGT licence for products I want to bring to the EU but do not intend to sell on the EU market (for example – a sample I want to show in an exhibition)?

Yes, if the product is of a type covered by the Indonesia-EU Voluntary Partnership Agreement (VPA) and listed in Annex I of the VPA, you will need a FLEGT licence. Such products cannot be exported from Indonesia without a FLEGT licence. 

I have purchased some Indonesian products but they are not FLEGT licensed. What should I do?

If your products left Indonesia before 15 November 2016, when FLEGT licensing began, they should not have a FLEGT licence. If the products fall under the scope of the EU Timber Regulation (EUTR), you must conduct due diligence, as required by EUTR, before placing them on the EU market. 

Competent authorities in EU Member States will require FLEGT licences only for shipments of products listed in the Indonesia-EU Voluntary Partnership Agreement (VPA) that leave Indonesia after the start of FLEGT licensing, which began on 15 November 2016.

The authorities will permit products accompanied by a valid FLEGT licence to enter the EU market. They will not allow such products to enter the market without a FLEGT licence. 

Each EU Member State is responsible for setting up a mechanism to prevent the entry of unlicensed timber from VPA partner countries that have started FLEGT licensing. A standard annex to VPAs, Annex III in the Indonesian VPA, describes the EU procedures for verifying FLEGT licences, as set out in the FLEGT Regulation of 2005.

For products exported from Indonesia after 15 November 2016, your supplier or commercial partner should provide you with a FLEGT licence if the products are included in the product scope of the VPA.

If raw material used to make a product is harvested in Thailand or Malaysia, for example, and then imported to Indonesia and made into the final product and exported to the EU, could this final product be covered by a FLEGT licence?

Yes. The Indonesian importer has to ensure that the wood they imports into Indonesia comes from legal sources. This applies for the product scope of the VPA, including logs and sawn timber. To demonstrate legality the importer conducts due diligence, before import, using the Ministry of Environment and Forestry’s SILK system to upload relevant documentation. The Ministry of Environment and Forestry checks on the due diligence applied and, if satisfied, issues an import recommendation to the Ministry of Trade.

The final product will be FLEGT licensed if (i) the product is covered by Annex I of the VPA, (ii) the exporter holds an SVLK certificate, and (iii) the exporter can demonstrate the legality of the sources in their supply chain, including imports. 

All product types listed in Annex I of the VPA, and exported to the EU, will be FLEGT-licensed. Products that are not listed in Annex I of the VPA will not require a FLEGT licence for export to the EU. For such products, the EU Timber Regulation will apply.

Can Indonesian bamboo and rattan products be FLEGT-licensed or does the EU Timber Regulation apply if EU operators want to place such products on the market?

Indonesia’s timber legality assurance system (SVLK) does not apply to bamboo and rattan. Products made from these materials therefore do not receive FLEGT licences when exported to the EU. 

Bamboo and rattan may, however, appear as minor components in FLEGT-licensed products under HS codes that fall under the product scope of the VPA. In such cases, the products would not be classified as bamboo/rattan.

The EU Timber Regulation (EUTR) applies to bamboo and rattan products included in HS Codes that are listed in the Annex to the EUTR, unless they are explicitly excluded in the Annex to the EUTR.                      

For example, the EUTR excludes pulp and paper (HS codes 47 and 48) made from bamboo-based and recovered products, and does not apply to bamboo products, such as bamboo primarily used for plaiting, in the rough, whether or not split, sawn lengthwise or cut to length (HS Code 1401 that is not listed in the Annex to the EUTR).

However, the EUTR does cover bamboo and rattan in some products included in HS code 44, such as flooring. EU operators who wish to place such products on the EU market must therefore apply due diligence. 

Are Indonesia’s Harmonized System Codes the same as European Customs (HS) codes?

Annex I of the Indonesia-EU Voluntary Partnership Agreement (VPA) details the scope of products the agreement covers. The annex specifies the Customs HS codes of products, according to the World Customs Organization (WCO) HS code system. FLEGT licences will display the four or six-digit HS codes stipulated in the annex.

EU and Indonesian HS Codes are the same to the level of six-digits. Indonesia operates an internal system of 10 digits which is different from the EU system.

See the revised Annex I of the Indonesia-EU Voluntary Partnership Agreement (VPA) for a full overview of the product coverage and their HS codes: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015D1158

In Annex III to FLEGT Regulation (Regulation (EC) No 2173/2005 several HS codes of timber and timber products covered under the FLEGT Licensing Scheme are preceded by "ex" and some of them are prohibited from export from Indonesia. What does "ex" mean? When do I need a FLEGT Licence for timber products in ex codes?

The prefix "ex" (or "ex-out") means "out of". When applied to an HS code, “ex” indicates that this code contains only part of the referenced subheading, as specified in the description. In other words the prefix "ex" is used to specify which parts of a given code are included.

Therefore whenever the prefix "ex" is applied to an HS code, it means that only some timber products ‎or products that respond to a certain specification (e.g. specific thickness or other characteristics provided for in the description – see examples below) are covered by the FLEGT Licensing scheme. 

It should be noted that for certain ex HS codes (see example of ex 4407 below), the description may also clarify that while the timber products are covered by the FLEGT licensing scheme, they are prohibited from export according to Indonesian law and therefore they cannot be FLEGT licenced and they may not be imported into the EU.

Examples:

1) "Ex" HS codes used to implement the log export ban in accordance with Indonesian legislation

The entire range of products under HS 4407 (Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm) is covered by the FLEGT licensing scheme. However some products cannot be exported from Indonesia –due to current export prohibition. Hence, such products cannot be FLEGT-licensed and may not imported to the EU. The prefix "ex" is used to separate two categories of products for which there are different licensing implications. These are expressed as follows:

a) ex 4407: Wood sawn or chipped lengthwise, sliced or peeled, planed, sanded or end jointed, of a thickness exceeding 6 mm. For timber products falling under this ex code a FLEGT licence is always required.

b) ex 4407:  Wood sawn or chipped lengthwise, sliced or peeled, not planed, not  sanded or not end jointed, of a thickness exceeding 6 mm. (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT-licensed and therefore may not be imported into the EU). These timber products are covered by the FLEGT licensing scheme but they cannot be FLEGT-licensed due to the current export prohibition under the Indonesian law and may not be imported into the EU.

2) "Ex" HS codes used to exclude products made from bamboo and rattan from the scope of application of the FLEGT licensing scheme

For a number of HS codes, specific sub-headings that identify products made from non-wooden materials such as bamboo and rattan do not exist. Since these non-wooden materials are not covered by the Indonesian Timber Legality Assurance System, they have been explicitly excluded from the scope of application using the prefix "ex". For example, under the Code ex 4419 "Tableware and kitchenware, of wood (not from bamboo and rattan)", all products made of wood are covered by the FLEGT licensing scheme, while the ones made from bamboo and rattan are excluded from the FLEGT licensing scheme:

a) ex 4419: tableware and kitchenware made of wood. For such products, a FLEGT licence is always required.

b) ex 4419: tableware and kitchenware made from bamboo or rattan. For such products, no FLEGT licence is required.

3) "Ex" HS codes used to exclude paper products made from non-wooden or recycled material from the scope of application of the FLEGT licensing scheme

Paper products made from non-wooden or recycled material are excluded from the scope of application of the FLEGT licensing scheme, but Indonesian legislation requires that any shipment of such products to be covered by a letter by the Indonesian Ministry of Industry confirming use of these materials. This applies to all products from chapter 48 which are included in Annex III to FLEGT Regulation (Regulation (EC) No 2173/2005. For example, under the Code ex 4802  "Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803; hand-made paper and paperboard (not from non-wooden nor recycled material*), products made from wood are covered by the FLEGT licensing scheme, while products from non-wooden or recycled material are excluded from the FLEGT licensing scheme:

a) ex 4802: Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803; hand-made paper and paperboard. For such products, a FLEGT licence is always required.

b) ex 4802: Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803; hand-made paper and paperboard made from non-wooden or recycled material. For such products, no FLEGT licence is required. For such products, a letter by the Indonesian Ministry of Industry confirming use of these materials is required for export from Indonesia.

*Note: Paper products originating from non-wooden or recycled material are accompanied by a formal letter from the Indonesian Ministry of Industry validating the use of non-wooden or recycled materials. Such products will not be FLEGT-licensed.