United States Trade Representative Robert Lighthizer has directed US Customs and Border Protection (CBP) to block future timber imports from a Peruvian exporter based on illegally harvested timber found in its supply chain. This enforcement action is being taken by the Interagency Committee on Trade in Timber Products from Peru (Timber Committee) for the first time under the United States – Peru Trade Promotion Agreement’s (PTPA) Annex on Forest Sector Governance (Forest Annex).

Last year, the Timber Committee requested that Peru verify that a specific timber shipment from the company Inversiones Oroza complied with all applicable Peruvian laws and regulations. The request was made following public reports that Oroza was engaging in illegal logging activities. The verification process conducted by Peru revealed that significant portions of the Oroza shipment were not compliant with Peru’s law, regulations, and other measures on harvest and trade of timber products. The timber verification provision is a unique monitoring tool included in the PTPA to ensure Peruvian forestry laws are enforced throughout the supply chain.

“Illegal logging destroys the environment and undermines US timber companies and American workers who are following the rules,” said USTR Robert Lighthizer. “We will continue to closely monitor Peru’s compliance with its obligations under our trade agreement.”

The PTPA contains a unique Environment Chapter and Forest Annex, which includes a requirement for Peru to conduct audits of particular timber producers and exporters and verifications of particular shipments of wood products from Peru upon request from the United States. The agreement also provides a list of actions the US may take with respect to the shipment or enterprise that is the subject of the verification. Based on the results of the verification and ongoing monitoring of the situation, the Timber Committee has directed that CBP deny entry to Oroza shipments for three years or until the Timber Committee determines that Oroza has complied with all applicable laws, regulations, and other measures of Peru governing the harvest of and trade in timber products, whichever is shorter.

While the Forest Annex has catalyzed meaningful reforms in Peru’s forestry sector, the verification process last year highlighted the systemic challenges that remain in combating illegal logging in Peru. In November 2016, the Government of Peru announced a set of unilateral actions to address ongoing challenges including holding all of the relevant actors involved in the Oroza shipment accountable, amending export documentation requirements to improve traceability, enhancing timber inspections, and implementing a timber tracking system in the Amazon corridor. “However,” said a USTR statement, “significant work remains for Peru to address its ongoing challenges to combating illegal logging.”