The report is the final second year report of the FLEG II project assignment “Analysis of the legislative framework for timber tracking system in Ukraine” and is a continuation of the previous year study, the results of which are outlined in the report «Analysis of the legislative framework on timber flow control system in Ukraine and development of improved proposals” and the second year interim report “International experience in development of timber tracking systems”.

The report is presented in Ukrainian and in English (separate documents) and consists of 3 sections, an introduction and two annexes.

The main part of the report (sections 2 & 3) contains analysis of timber flow control system functioning; assessment of the effectiveness of the system elements in the forest sector of the country and proposals for its improvement and legislative background of the timber track and trace system in Ukraine. Proposals are prepared to meet the requirements of the EU about the legality of the wood origin and possibility of tracing, the country's course for deregulation and decentralization, to increase social responsibility of businesses and improve business environment.

The annex 1 presents proposals for amendments in legislation regarding an electronic declaration of timber origin. The proposals include: a draft of the Law of Ukraine "On amendments and additions to the Law of Ukraine “On peculiarities of state regulation of business entities associated with the sale and export of timber production"; Decree of Cabinet Ministers of Ukraine "On approval of electronic declaration of timber origin"; the Procedure for electronic declaration of timber origin.

A booklet draft on how the improved model of timber track and trace system in Ukraine could potentially work in reducing illegal logging and ensuring compliance with the EU requirements concerning its origin is included in the annex 2. The model is the first out of three proposed stages suggesting the forestry agency to develop and put into effect an informational software complex that forms a single register of certificates on the origin of timber for export – an electronic timber declaration. During the second stage an expert proposes to develop and implement software control module of the raw wood transportation in real time, when anyone on the road can check the registration of the loaded truck (considered to be similar to the system SUMAL, which has been successfully implemented in Romania). At the third stage the effect of electronic register of certificates on the origin of timber sold on the domestic market (January 2019) could be extended from using by state forestry agency for all forest users. At the final stage, it is expected that all trade and transport operations with timber both in processed and unprocessed form will be subject to electronic registration. As a result, it will help to form the system for control and release the information about the balance of production and consumption of wood in the country and is also aimed not only at improving the fight against illegal logging, but also the possibility of improving the system of management, logistics, improving economic efficiency, expanding information provision and transparency of public and private timber companies and thus confirming their social responsibility.