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EBA experts discussed anti-corruption measures in the forestry sector with NACP

18/ 02/ 2025
  Experts from the European Business Association participated in an event organised by the National Agency on Corruption Prevention (NACP), where the study Corruption Risks in the Forestry Sector was presented. During the event, Yurii Andriiv, Manager of the EBA Committees, highlighted the current challenges and priorities of the woodworking industry. One of the most pressing issues for businesses today is the adoption of Draft Law No. 4197-d On the Timber Market by the Verkhovna Rada of Ukraine in its second reading. This EU-integration-focused legislation has been developed with input from industry associations, key stakeholders, and MPs. According to the business community, the version approved on 4 February by the Parliamentary Committee on Economic Development ensures effective timber market regulation while addressing the needs of both businesses and the state. Key provisions of the Draft Law to reduce corruption risks The following key provisions of the draft law were presented as measures to minimise potential corruption and abuse: Cascade principle for timber exchange auctions, allowing both price increases and decreases to ensure fair and transparent competition. Extension of the moratorium on the export of unprocessed timber, enabling domestic processing companies to invest more in production, create jobs, and increase tax revenues. Priority purchasing rights for domestic processing companies at exchange auctions, protecting local manufacturers from potential market manipulation. Inclusion of domestic woodworking enterprises in the relevant state register. Formula-based pricing for timber set by the State Forest Resources Agency of Ukraine. Regulation of market participants – including sellers, auction organisers, and buyers. Procedures for allocating timber for the needs of the Armed Forces of Ukraine, public procurement, and individual social needs. Additional steps to improve the industry and reduce corruption The EBA representative also outlined necessary measures to enhance woodworking operations in Ukraine and mitigate corruption risks: Include geographic coordinates of logging sites in the TTN-Lis (transportation document) and felling permits. Enable the issuance of TTN-Lis in electronic format with a QR code. Provide detailed information on timber species in felling permits or attach material and monetary evaluations. Resolve issues with FSC certification. Following the restructuring of the state enterprise Forests of Ukraine, all branches lost their FSC certificates, leading to delayed international contracts and revenue losses. While the reissuance of certificates has begun, the process remains slow, negatively impacting domestic woodworking companies. Ensure compliance with EU Regulation 2023/1115 (EUDR) by addressing the urgent issue of the lack of geolocation data for logging sites. We appreciate the NACP team for facilitating this crucial discussion and engaging the business community in the dialogue!

Experts from the European Business Association participated in an event organised by the National Agency on Corruption Prevention (NACP), where the study “Corruption Risks in the Forestry Sector” was presented.

During the event, Yurii Andriiv, Manager of the EBA Committees, highlighted the current challenges and priorities of the woodworking industry.

One of the most pressing issues for businesses today is the adoption of Draft Law No. 4197-d “On the Timber Market” by the Verkhovna Rada of Ukraine in its second reading. This EU-integration-focused legislation has been developed with input from industry associations, key stakeholders, and MPs. According to the business community, the version approved on 4 February by the Parliamentary Committee on Economic Development ensures effective timber market regulation while addressing the needs of both businesses and the state.

Key provisions of the Draft Law to reduce corruption risks

The following key provisions of the draft law were presented as measures to minimise potential corruption and abuse:

  • Cascade principle for timber exchange auctions, allowing both price increases and decreases to ensure fair and transparent competition.
  • Extension of the moratorium on the export of unprocessed timber, enabling domestic processing companies to invest more in production, create jobs, and increase tax revenues.
  • Priority purchasing rights for domestic processing companies at exchange auctions, protecting local manufacturers from potential market manipulation.
  • Inclusion of domestic woodworking enterprises in the relevant state register.
  • Formula-based pricing for timber set by the State Forest Resources Agency of Ukraine.
  • Regulation of market participants – including sellers, auction organisers, and buyers.
  • Procedures for allocating timber for the needs of the Armed Forces of Ukraine, public procurement, and individual social needs.

Additional steps to improve the industry and reduce corruption

The EBA representative also outlined necessary measures to enhance woodworking operations in Ukraine and mitigate corruption risks:

  1. Include geographic coordinates of logging sites in the TTN-Lis (transportation document) and felling permits.
  2. Enable the issuance of TTN-Lis in electronic format with a QR code.
  3. Provide detailed information on timber species in felling permits or attach material and monetary evaluations.
  4. Resolve issues with FSC certification. Following the restructuring of the state enterprise “Forests of Ukraine”, all branches lost their FSC certificates, leading to delayed international contracts and revenue losses. While the reissuance of certificates has begun, the process remains slow, negatively impacting domestic woodworking companies.
  5. Ensure compliance with EU Regulation 2023/1115 (EUDR) by addressing the urgent issue of the lack of geolocation data for logging sites.

We appreciate the NACP team for facilitating this crucial discussion and engaging the business community in the dialogue!

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