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On September 1, 2020, the Government of Vietnam issued Decree 102/2020/ND-CP enacting Vietnam’s Timber Legality Assurance System (VNTLAS) as part of its commitments under the Forest Law Enforcement Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA), a bilateral trade agreement with the European Union, but which covers all timber imported and exported from Vietnam. One of the main objectives of the Decree is to develop mechanisms to ensure the legality of Vietnam’s imported timber, based on criteria which classify risks by country of origin and timber species. The Decree entered into force on October 30, 2020 but implementation was delayed until the Vietnamese Ministry of Agriculture and Rural Development (MARD) published a list of “positive” geographical regions on November 27, 2020, or those source countries deemed low-risk which, by default, also indicates that any countries not on this list are considered high-risk. While the VNTLAS is now being implemented, some early challenges should be expected given that this is a new system.
The FLEGT VPA and the VNTLAS prescribe risk classification criteria which rate the timber’s country of origin according to, among other things, the existence of a mandatory national framework on due diligence, a World Bank Worldwide Governance Indicator of zero or higher, or mandatory certification systems for national timber. Concerns have been raised about the results of this risk classification, and specifically the inclusion of some countries on the list of positive geographies released in November 2020. The timber legality risk dashboard available on this site does not use the same risk criteria as the one outlined in the VNTLAS and FLEGT VPA. In October 2020, the U.S. initiated an investigation under Section 301 of the Trade Act of 1974 to address environmental concerns related to Vietnam’s import and use of illegal timber. On October 1, 2021, the U.S. and Vietnam announced an Agreement which sets out several commitments to keep illegal timber out of the supply chain, including revisiting the risk classification.
The VNTLAS is yet to be formally recognized as meeting the standards set by the European Union Timber Regulation (EUTR) and Vietnam is not currently issuing FLEGT licenses. Vietnam will begin issuing FLEGT licenses when the timber legality assurance system has been successfully tested, and when Vietnam and the EU are satisfied that it functions as described in the VPA. In Europe, a FLEGT licence denotes complete compliance with the EUTR for European importers; however, a FLEGT licence may not in and of itself guarantee compliance with timber import regulations in other jurisdictions, such as the U.S. Lacey Act in the United States.
- Vietnam has started implementing mandatory measures blocking illegal timber imports as part of efforts to develop a Timber Legality Assurance System under the auspices of the Vietnam-EU FLEGT VPA. Some early challenges should be expected given that this is a new system.
- Vietnamese domestic and plantation-grown raw materials (primarily acacia, rubberwood and eucalyptus) are generally considered lower-risk.
- Vietnam imports between 4 and 5 million cubic meters of raw materials annually from both higher- and lower-risk sources with higher-risk imports from the Congo Basin rapidly increasing.
- Higher-risk tropical species tend to be manufactured into wood products primarily for the Vietnamese domestic market with some exports to China.
- Independent NGO reports have documented incidents of illegal timber entering Vietnamese supply chains, particularly through imported raw materials from the Mekong sub-region up until 2018, but increasingly from Africa as imports from Cambodia have dropped in the last two years. If the VNTLAS system is robustly implemented, illegal imports may be expected to drop although it will likely be several months before the effectiveness of implementation can be first assessed.
Read more by downloading the Vietnam Timber Legality Risk Dashboard here.
The food industry says it is running out of time to prepare for new EU rules to cut carbon emissions from the supply chains of several key commodities, accusing Brussels of issuing proposals that lack detail and will fail to stop deforestation.
Vietnam stakeholders fear that the EU will will be in a disadvantageous position if the EU labels VIetnam coffee with the highest risk of deforestation as the basis for national risk labeling.
At the conference on the afternoon of November 4, representatives of authorities, associations and businesses said that the biggest difficulty that agricultural supply chains in Vietnam are facing when meeting new EU regulations is a database to locate forest areas, trace origin, and deploy an anti-deforestation monitoring system.
Because the preparation time until this regulation begins to apply is less than 18 months, it is necessary to urgently review products in the most risky areas in the agricultural supply chain, especially the smallholder sector. Accordingly, there needs to be a plan to collect and process information from millions of farming households according to new regulations on anti-deforestation.
According to data from the Department of Forestry (VNFOREST), Vietnam currently has a total forest area of approximately 14.74 million hectares, with planted forests making up 31 percent and natural forests constituting the remaining 69 percent. The objective for the year 2025 is to attain an export value of US$18-20 billion for the forestry sector and to reach $23-25 billion by 2030.
Currently, there are over 6,000 forestry export companies operating across the country, and the major enterprises are mainly clustered in Ho Chi Minh City, Dong Nai, and Binh Duong. Previously, raw materials had to be imported from other countries, but now, import volumes have decreased gradually thanks to the proactive cultivation of raw materials.
According to Mr. Vu Thanh Nam, Head of the Forest Utilization Department of the VNFOREST under the Ministry of Agriculture and Rural Development, Vietnam’s forested area has been rapidly expanding in recent times thanks to effective land allocation and forest management. Forests not only have proprietors but also facilitate forest growers in consuming the products they cultivate, thus aiding in reaching the designated forest cover objectives.
European Union rules aimed at stopping deforestation threaten widespread disruption for Southeast Asia’s rubber sector, from Cambodia’s 30,000 small farmers to major exporters in Thailand and Malaysia.
The concern for Southeast Asia, critics say, is that these requirements will disproportionately hurt small farmers while failing to adequately address rubber’s role in deforestation.
It is anticipated that Vietnam’s cocoa, coffee, and rubbers will be highly exposed to the EUDR, as Vietnam currently export a significant proportion of these products to the EU markets. Coffee will be the most impacted, given more than 45% of all Vietnamese coffee production is destinated to the EU, followed by cocoa (34.3%) and rubber (14.6%). For wood and wooden products, Vietnam’s current key markets are the United States, China, and Japan; therefore, the exposure of this industry to the EUDR is relatively lower than the three products mentioned above. However, as many countries are taking measures to mitigate climate change impact, they might adopt similar measures to that of the EUDR in the future.
The deforestation caused by the rubber farming in Thailand and the world has been significantly underestimated, according to new findings from two scientific studies, with Southeast Asian rubber production potentially contributing up to three times more forest depletion than previously thought.
With over 4 million hectares of forest lost for rubber production since 1993, an area the size of Switzerland, “the effects of rubber on biodiversity and ecosystem services in Southeast Asia could be extensive,” according to a paper published on Wednesday in the journal Nature.
In Southeast Asia, mature rubber plantations covered 14.2 million hectares. Indonesia, Thailand, and Vietnam accounted for more than 70% of these plantations.
China, Malaysia, Myanmar, Cambodia, and Laos were also important rubber-producing countries. Rubber plantations that were closed down before 2021 were excluded from the analysis, despite the fact that they may have contributed to deforestation.
Nearly two years after the reaching an agreement that avoided Section 301 tariffs on imports from Vietnam, the U.S. indicated concerns about Hanoi’s implementation of that agreement.
The EU is the largest coffee importer from Vietnam. In 2022, Vietnam exported to the EU 689,049 tonnes, worth nearly 1.5 billion USD, up 25.8% in volume and 45.4% in value compared to 2021. Being impacted by the new EU law, Vietnamese coffee exporters now have to ensure that the coffee they export is not linked to deforestation.
According to the Vietnam Coffee and Cocoa Association, coffee farmers in Vietnam face a major difficulty in ensuring traceability. They usually grow coffee in small areas which are mostly about 0.5ha or less.
To achieve the export value target of US$17 billion this year, Deputy Minister MARD Trị has requested the Administration of Forestry and the Việt Nam Timber and Forest Products Association (Viforest) to update wood processing facilities in craft villages on legal timber policies and regulations.
The article also mentions interest in State management agencies needing to review and cut administrative procedures, and perfect institutions and policies to create favourable conditions for the import and development of wood materials from domestically planted forests with sustainable forest management certification. This reflects that exporting enterprises still have difficulties in getting verification of wood origin according to regulations, leading to many obstacles in the process of receiving certificates of origin (C/O) for export products.
The Ministry of Finance is requested to coordinate with the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade to organise conferences with wood exporting enterprises to find solutions removing difficulties in VAT refund and verification on origin of timber from domestically planted forests.
Viforest officials also suggested that the Ministry of Agriculture and Rural Development hold negotiations with importing countries to set up united regulations on timber traceability for Việt Nam’s export wood products.
The world’s largest agriculture producers are pushing back against new European Union rules that require proof that crops weren’t grown on deforested land, which producers say will add to the cost of making food.
Examples and quotes from government and industry players in Brazil, Vietnam, Cote d’Ivoire and Ghana cited.
The new EU regulation mandates trade companies to adhere to strict rules on the traceability of their products.
Vietnam, the second biggest coffee exporter in the world, is bracing for compliance challenges over a new anti-deforestation trade law by the European Union.
Europe is Vietnam’s biggest market for coffee. About 50 to 60 per cent of the Southeast Asian nation’s total coffee exports head there each year.
Last month, prominent environmental defender Hoang Thi Hong publicly welcomed news that fellow climate activist and Goldman prize winner Nguy Thi Khanh had been released from prison, after being charged and sentenced for ‘tax evasion’ in 2022.
But days later, Hong was arrested on similar charges. This week she has reportedly been charged with evading more than five billion dong in tax – around £173,000.
As the fifth activist arrested in Vietnam in the last two years, Hong’s detention is part of a troubling pattern of seemingly politically motivated attacks against environmental defenders in the country.
According to the Trade Remedy Bureau of the Ministry of Industry and Trade of Vietnam, the US Department of Commerce (DOC) continues to extend the time for the final conclusion of the anti-tax evasion and anti-dumping investigation on plywood using hardwood material imported from Vietnam. This underscores for Vietnam the need for traceability systems that can verify the country of origin for wood products.
The US Department of Commerce will issue its final conclusions on July 14, 2023. This is the eighth time the Commerce Department has delayed issuing its final conclusion.
For one year, The world And InfoCongo met with dozens of timber traffickers, residents and drivers of illegal logs in Cameroon. Their testimonies, as well as official documents from the Ministry of Forests and Wildlife (which did not wish to answer our questions), show that illegal logging is accelerating.
A prominent climate activist in Vietnam was detained on Wednesday in what human rights experts say is the latest case of the country’s ruling Communist Party suppressing civil society. The arrest came weeks after dozens of environmental and human rights groups urged President Joe Biden and other world leaders to pressure Vietnam on its human rights practices before industrialized nations send the country billions of dollars to fight climate change and boost its economic development.
The United Nations says Hoang Thi Minh Hong, founder of the environmental group CHANGE VN, was arrested on charges of tax evasion. The UN says Hoang is the fifth high-profile climate activist in Vietnam who has been charged with tax evasion in the past two years. Human rights experts say the Vietnamese government is arbitrarily enforcing the law to target civil society groups.
Thailand, Laos and Myanmar are at the frontlines of illicit trade in Asia dominated by transnational organized crime syndicates.
The trafficking in illegal narcotics, precursor chemicals, timber and wildlife, people and illicit goods across Southeast Asia is being tackled thanks to the support of the specialized UN agency focusing on drugs and crime.
The US Department of Commerce (DOC) recently
unveiled an extension of the deadline for issuing its final
conclusion on a trade remedy duty evasion probe into
hardwood plywood imported from the Vietnamese market.
This marks the sixth time that the DOC has announced an
extension, with the final determination expected on 2 May.
In July 2022, the DOC announced the preliminary
conclusion of the case, saying that plywood from Vietnam
using materials from China should be subject to the same
anti-dumping and anti-subsidy duties applied to the
northern neighbour.
In February 2023 the Ministry of Industry and Trade in Vietnam issued Resolution No. 235/QD-BCT making a final and definitive anti-dumping ruling on tables, chairs and accessories from China imposing an anti-dumping duty of 21.4% on chairs and 35.2% on tables and accessories from China.The Vietnamese tax HS codes of the products involved are 9401.3000, 9401.4000, 9401.6100, 9401.6990, 9401.7100, 9401.7990, 9401.8000, 9401.9040, 9401.9092, 9401.9099, 9403.3000, 9403.6090 and 9403.9090. The measures will take effect from 13 February 2023.
Many wood artisans are in need of support so that their works can get recognition in the global supply chain.
This article summarizes the challenges faced by local wood artisans, and models for ensuring the legality of their wood products.
Facing the increasingly difficult export situation, domestic wood associations have linked together to expand markets, seek customers, and promote trade.
The Forest Protection Department of Binh Thuan Province, on February 5, said that it reported the inspection and verification results following the direction of the provincial Department of Agriculture and Rural Development related to the large-scale deforestation that occurred in the Ta Cu Nature Reserve in Ham Thuan Nam District in Binh Thuan Province.
HO CHI MINH CITY, Vietnam — Russian birch wood has continued to flow to American consumers, disguised as Asian products, despite U.S. economic sanctions imposed on Russia over its invasion of Ukraine, a new report says.
HCM City (VNS/VNA) – Contrary to full orders at the beginning of the year, Vietnamese wood and wooden furniture enterprises are currently facing many difficulties due to the cancellation of orders by customers because of inflation in countries such as the US and the EU and the sharp increase in input material costs.
In fact, Vietnam’s wood industry is seeing declining sales overseas.
The export value in July was estimated at 1.41 billion USD, down 5.5% against June and down 1.6% year-on-year, according to a report of the General Department of Forestry under the Ministry of Agriculture and Rural Development (MARD).
VIETNAM, August 27 – HÀ NỘI — The US Department of Commerce (DOC) has not yet issued the final determination on the imposition of anti-dumping and countervailing duties on certain hardwood plywood products and veneered panels exported from Việt Nam.
The Việt Nam Timber and Forest Products Association (VIFOREST) has confirmed that the DOC on April 15 extended the deadline to issue a final determination to October 17.
The DOC initiated the anti-dumping and anti-subsidy investigation on hardwood plywood from Việt Nam on June 17, 2020, to enforce the trade remedies measures on Chinese hardwood plywood.
The US is currently applying anti-dumping of 183.36 per cent and anti-subsidy duties from 22.98 per cent to 194.9 per cent on hardwood plywood products from China.
On July 25, DOC announced its preliminary determination that hardwood plywood exported from Việt Nam, which was assembled in Việt Nam using hardwood plywood imports sourced from China, were products of China and were subject to the anti-dumping duty and countervailing duty orders on hardwood plywood from China.
While many products exported to the UK enjoyed strong increases thanks to the UK-Vietnam Free Trade Agreement (UKVFTA), Vietnam’s timber industry is facing difficulties in expanding in this market, requiring manufacturers and exporters to change their business strategies.
Vietnamese Authorities are considering a management and conservation plan for two of their most valuable native tree species. The plans, which have been proposed by the Center for Nature Conservation and Development (CCD) Viet Nam, are for the two species of rosewood (Dalbergia cochinchinensis and Dalbergia oliveri). They are among the most sought-after trees in international trade for high-end furniture and decorative products. The wood has a high commercial value and is well-known for durability, corrosion and termite resistance and has been extensively used in construction and furniture making. As a result, both tree species have been the most heavily exploited and traded species in Viet Nam and many other countries. The wild populations are now small and fragmented and without proper conservation and restoration measures, are at high risk of extinction in many parts of the country.
Despite new regulations to clean up Vietnam’s timber sector, importers continue to bring large volumes of tropical hardwood into the country from deforestation hotspots in Africa and Asia for use in products sold domestically.
In 2018, Vietnam signed a Voluntary Partnership Agreement with the EU to eliminate illegal timber from the country’s supply chains and boost access to the strictly regulated European markets.
Cambodia and Vietnam have expressed their commitment to strengthen forest sector cooperation, mainly combating the cross-border trade of timber and wild animals.
United States Trade Representative Katherine Tai announced an agreement with the Socialist Republic of Vietnam that addresses U.S. concerns in the Vietnam Timber Section 301 investigation. This is the first 301 investigation to address environmental concerns. The Agreement secures commitments that will help keep illegally harvested or traded timber out of the supply chain and protect the environment and natural resources.
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