In 2003, the European Union adopted the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, which aims to reduce illegal logging and timber production and related forest degradation and deforestation. 

The two main components of the FLEGT Action Plan are the EU Timber Regulation (EUTR) and Voluntary Partnership Agreements (VPA) between the EU and tropical timber producing countries. Voluntary Partnership Agreements are binding bilateral trade agreements which define a Timber Legality Assurance System (TLAS) which, once fully operational, allows the issuance of FLEGT licences for timber consignments, providing green lane access to the EU market.

Indonesia is currently the only country issuing FLEGT licenses based on an operational TLAS but another nine have signed and ratified their VPA with the EU and a number of other tropical timber producing countries are actively negotiating their VPA.

The  VPA is the main supply side instrument of the FLEGT Action Plan, but in the absence of VPA processes, other voluntary and regulatory instruments such as  voluntary forest certification (e.g. FSC or PEFC schemes), national or private legality verification systems, and private or public procurement policies, have the ability to help producer countries improve forest sector governance in response to international market requirements such as the EUTR.

The EUTR is the FLEGT Action Plan’s main demand side measure as it prohibits the placing of illegal wood products on the EU market and imposes a due diligence obligations on European importers. Building on the implementation of the EUTR, the EU is currently considering a proposal for a regulation on deforestation-free products. This new regulation will cover a number of  forest-impacting commodities including soy, beef, palm oil, cocoa and coffee as well as wood and will replace the EUTR. The regulation aims to minimise consumption of products coming from supply chains associated with deforestation or forest degradation, while increasing demand on EU markets for legal and ‘deforestation-free’ commodities and products.  FLEGT-licensed timber under VPAs will be recognized by the EUDR, but countries will need to take additional measures to demonstrate additional traceability and sustainability requirements imposed by the new regulation.