Key trends in the timber industry: whitewashing the industry

We've compiled ten key trends that have impacted the forestry industry over the past decade and will continue to shape it in the coming years. The first trend on our list is the whitewashing of the industry and the adoption of measures aimed at its decriminalization.

It is this trend that is the key to the investment attractiveness of the industry, which made all the other items on our list possible.

• In October 2017, the Arkhangelsk region became a pilot subject of the Russian Federation for the project of the Federal Tax Service of Russia to “whitewash” the forestry business. An interdepartmental working group was organized to create a financially transparent environment in the timber industry. After a year of control measures, market participants signed the Charter in the field of timber turnover.
• Full-scale reform of the forestry complex with the aim of decriminalizing it at the federal level began at the end of 2020. This was the result of three years of work by the National Forestry Forum under the auspices of the State Duma and with the participation of the National Association of Timber Industry “Russian Forest”. Today in Russia, traceability of wood is ensured in the information system from the place of procurement to production, processing or export consignments at customs points.
• In 2021, the process of global digital transformation of the timber industry complex was launched in the Russian Federation. In our country, they began to create and improve industry information systems - the Unified State Automated Information System for Accounting for Wood and Transactions with It (LesEGAIS) and the Federal State Information System for the Forestry Complex (FSIS LK).
• Already in 2024, it is planned to launch a unified electronic database of forestry accounting and economic relations. At the same time, new rules for maintaining the State Forest Register (SFR) will come into force, and the FSIS LC will begin its work. This should make the industry transparent.
• Another measure designed to whitewash the industry is the introduction of new fines for “black” lumberjacks. Currently, the Ministry of Natural Resources of the Russian Federation is working on the draft Federal Law “On Amendments to the Code of the Russian Federation on Administrative Offenses” (in terms of establishing liability for violation of mandatory requirements in the field of wood turnover).

Olga Kalyuzhnaya, President of the Russian Forest Association: “From the experience of introducing various systems of traceability, labeling and other things, we see that there are technical failures in the operation of such systems, so it is important to provide for exemption from liability for entrepreneurs in this case - Naturally, if there is official confirmation that entering information at a certain moment was impossible. In general, digitalization of the forestry complex is one of the most important tasks today for both industry participants and regulators. The main goal of digitalization is the decriminalization of the industry, including the preservation of fair competition.".