Legal framework for forest management and timber trade of Ukraine

Forest governance

Forest Code and programmes
In 1994 the Ukrainian Parliament has adopted the Forest Code of Ukraine which regulates forestry management in modern socio-economic conditions and is aimed at conservation, improvement of wood quality and sustainable forest management. In 2002 the Parliament of Ukraine has adopted a new Land Code of Ukraine. Changes in land ownership caused the necessity to develop a new version of the Forest Code of Ukraine. In April 2002 the government of Ukraine has adopted the programme Forests of Ukraine for 2002-2015. Realization of this programme extends forest covered territories and other wooded lands.

State Forest Resources Agency (SFRA) is the main state authority in forest and hunting management. The main objectives of the State Forest Resources Agency are:

• to implement the state politics in forest and hunting management, protection and conservation, sustainable forest management, regeneration of forest resources and game animals, to improve the efficiency of forest and hunting management;
• to administer, regulate and control forest and hunting management;
• to develop and implement the national, international and regional programs in order to protect forests, improve their productivity, sustainable forest management and reforestation, management and regeneration of game animals, development of hunting and forest management planning. (Website State Forest Resources Agency)

Monitoring
Ukrainian national forest monitoring system is organized, performed and guided by the scientific organizations of Ukrainian State Forest Resources Agency (SFRA). General supervision is provided by the Scientific and Information Department of the USCF.

The Laboratory of Forest Monitoring and Radioecology at the Ukrainian Research Institute of Forestry and Forest Melioration (URIFFM) is the main forest monitoring implementation center in Ukraine. The monitoring network covers main forest regions of the country and represents different geographical zones.

Legal rights to harvest

The State Forestry Enterprises (SFE’s) are the executive bodies of the Agency and manage the forest and organize timber production. They are obliged to offer the logs within the region on timber auctions, where only Ukrainian companies are allowed to buy it. The unsold remains can be sold directly by the State Forestry Enterprises. (Probos, 2007).

Only citizens and legal entities of Ukraine may own forests in Ukraine. According to the applicable Law of Ukraine "On concessions", concessions cannot be owned by forestry enterprises.

For state owned forests subordinated to the State Agency of Forest Resources of Ukraine (SAFRU) legal rights to harvest are based on availability of:

• a forest inventory with plan and cartographic materials,
• approval of annual allowable cut,
• forest cutting ticket (issued by Regional Directorate of SAFRU), logging technological maps of cutting areas which reflect nature conservation requirements,
• permits for employees to carry out high risk tasks.

For state enterprises which are not subordinated to SAFRU, communal or privately owned forests there are no uniform legal requirements on setting land tenure and management rights. But other requirements are the same for communal and privately owned land (approval of annual allowable cut, forest cutting ticket, logging technological maps, permits to carry out high risk tasks).

Taxes and fees

Taxes and royalties to be paid are determined depending on harvesting volume and species. It includes payment of rent for so called “special use forest resources”, payment of VAT and payment of income tax for permanent forest users or the single tax for forest users working under the simplified taxation system.

The law of Ukraine dated 10.07.2018 № 2497-VIII "on amendments to the tax code of Ukraine and certain laws of Ukraine on stimulation of formation and activity of Family farms" was amended, which provides land tax for all forest lands of Ukraine for which forest users are obliged to pay to local communities.

Timber harvesting activities

Harvesting permits (licenses) are issued by the Regional bodies of the State Forest Resources Agency SFRA for the harvesting of wood in final felling, based on properly approved annual allowable cut, and depending on a proper wood product accounting system, the terms for forest use and the transportation of harvested wood, the terms and methods for the cleaning of cutting areas, and plans to enhance natural regeneration after harvesting.

In order to obtain a harvesting permit, forest owners and permanent forest users must submit the following documents:

• request for the use of forest resources with felling;
• record/map of the cutting area;
• field record list;
• evaluation list;
• plan for the management of the cutting area; and
• plan of the cutting area.

Legislation requires incorporation of nature conservation requirements in the course of harvesting. This should begin with inclusion in logging area maps. Compliance with these documents is mandatory. The Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine on the Protection of Virgin Forests, in accordance with the Framework Convention on the Protection and Sustainable Development of the Carpathians (May 2017), prohibits all types of felling in natural forest, virgin forest and quasi-virgin forests, including:

• Sanitary felling
• Felling of trees for forest formation and restoration (except for felling to care for linear objects such as roads and pipelines, and felling of individual trees during firefighting)
• Felling for the construction of buildings, roads, linear and other transport facilities
• Felling for cattle grazing
• Felling for the commercial harvesting of non-timber forest products
• Felling for the travel of vehicles (except for public roads and forest service roads)

Third parties’ right

In Ukraine there are certain communities with some customary rights related to forests. However, there is no direct dependence of those communities on forests and/or forest products. Mainly customary rights coincide with the right of public use of forest resources, which is provided for by applicable legislation (FSC National Risk Assessment CW, 2019).

Trade and transport

Ukraine has two timber flow control systems. The first one involves the issuance of a mandatory certificate of timber origin, preventing illegal export of timber. The second is implemented through the total marking of logs, while providing identification of timber (origin) and the transmission and control of information on various characteristics of the wood, until this is transferred to the buyer. The Unified State System of Electronic Accounting of Wood (USSEAW) is used to this end. It provides for individual marking and keeping electronic records about the logs at all stages of processing and logistics (ENPI East-FLEG II, 2015).

There is an online list of issued certificates of origin, available at the State Forest Resources Agency's official website.

Wood industry of Ukraine in 2019 switched to new national wood standards harmonized with the European ones. According to new standards commercial (round) timber classified  on four quality classes (A-D): A type - highest class timber, B – medium class timber, C – below medium with minor defects and D – timber that does not meet the requirements of A-C types, but could be used for lumber. The rest of round timber is divided into industrial (length of 2-4 meters, could be used for production of chips or fuel) and nonindustrial (up to 2 meters of length, could be used for fuel) (Ukraine open for business, 2019).