Order Code RL33932
Illegal Logging: Background and Issues
March 19, 2007
Pervaze A. Sheikh
Analyst in Natural Resources and Environmental Policy
Resources, Science, and Industry Division

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Illegal Logging: Background and Issues
Summary
Illegal logging is a pervasive problem throughout the world, affecting countries
that produce, export, and import wood and wood products. Illegal logging is
generally defined as the harvest, transport, purchase, or sale of timber in violation of
national laws. In some timber-producing countries in the developing world, illegal
logging represents over half of timber production and exports. The World Bank
estimates that illegal logging costs governments approximately $15 billion annually
in lost royalties. Illegal logging may stimulate corruption, collusion, and other crimes
within governments, and has been linked to the purchase of weapons in regional
conflicts in Africa. Illegal logging, however, does economically benefit the
perpetrators by reducing the cost of legal and regulatory compliance, sometimes
resulting in reduced prices. Illegal logging in protected areas can lead to altered
forest ecosystems, loss of biodiversity, and indirectly to deforestation and the spread
of agrarian activity in some developing countries.
Several relevant multilateral and international agreements relate to illegal
logging and illegal timber trade. These range from voluntary agreements that, for
example, allow consumer countries to exchange data with producing countries, to
legally binding multilateral agreements that enable signatory governments to seize
illegal products and exercise financial penalties on illegally produced timber.
The United States is the world’s largest wood products consumer and one of the
top importers of tropical hardwoods. Some are concerned that U.S. demand for
tropical timber from countries in Latin America and Southeast Asia may be a driver
of illegal logging. Others assert that if there were no illegally logged wood in the
global market, the value of U.S. exports of timber could increase substantially. The
United States has no specific domestic laws that address all aspects of illegal logging.
Logging within the United States is addressed by several laws and regulations —
some federal, but many state — that depend on what species is logged, and where
and how it is done.
In 2003, the United States developed an initiative to help developing countries
stop illegal logging. This initiative adopted several approaches to address illegal
logging, including removing legal and institutional barriers that prevent law
enforcement against illegal logging; using technology for monitoring legal trade and
transparency in logging; and creating incentives to promote local communities to
abolish illegal logging practices.
In some free trade agreement negotiations between the United States and other
countries, illegal logging has become an issue. For example, some contend that a
pending free trade agreement with Peru, if enacted, may lead to an increase in illegal
harvesting and import of Peruvian mahogany. Others contend that the FTA may
increase the awareness of illegal logging in Peru, and add an additional enforcement
mechanism to address illegal logging in Peru.

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Contents
Scope and Scale of Illegal Logging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Ecological Impacts of Illegal Logging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Socioeconomic Impacts of Illegal Logging . . . . . . . . . . . . . . . . . . . . . . . . . . 5
International Initiatives and Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Wood Certification Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
United Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
International Tropical Timber Organization (ITTO) . . . . . . . . . . . . . . . 7
World Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
G8 Illegal Logging Dialog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. Laws That Address Illegal Logging . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Foreign Policy on Illegal Logging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Free Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
List of Tables
Table 1. Estimates of Illegal Logging in Foreign Countries . . . . . . . . . . . . . . . . . 3

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Illegal Logging: Background and Issues
Illegal logging is a pervasive problem affecting countries that produce, export,
and import wood and wood products. Some have estimated that between 2% and
4% of softwood lumber1 and plywood traded globally, and as much as 23% to 30%
of hardwood lumber and plywood traded globally, could be from illegal logging
activities.2 The World Bank estimates that illegal logging costs governments
approximately $15 billion annually in lost royalties.3 Illegal logging is a concern to
many because of its economic implications as well as its environmental, social, and
political impacts. For example, logging illegally within designated park boundaries
could lead to environmental impacts such as habitat alteration and loss of timber
species; also the illegal acquisition of permits and evasion of royalties could promote
corruption.
The United States is the world’s largest wood products consumer and one of the
top importers of tropical hardwoods. Some are concerned that U.S. demand for
tropical timber from countries in Latin America and Southeast Asia may be a driver
of illegal logging. For example, the United States is the largest importer of Peruvian
mahogany, which some estimate to be 80% illegally logged.4 Some others contend
that illegal logging activities harm U.S. exports of timber. According to one study,
illegal logging of roundwood and its wood products depresses world wood prices on
average by 7%-16% annually. If there were no illegally logged wood in the global
market, it has been projected that the value of U.S. exports of roundwood,
sawnwood, and panels could increase by an average of approximately $460 million
each year.5 (This estimate is provided by a U.S. industry trade association opposed
to low-cost imports.)
1 “Hardwoods” is a term commonly used for trees in the phylum Anthophyta (angiosperms,
or flowering plants), because the dominant hardwood tree species of temperate climates
(oaks and maples) are harder (more dense) than the major “softwood” species (pines, firs,
and spruces), trees of the order Coniferales (conifers). However, some “hardwood” species
(e.g., aspen and poplar) are much softer (less dense) than many “softwoods.” In this report,
“hardwood” is used to indicate angiosperms, while “softwood” (or conifer) is used for
coniferous species.
2 Seneca Creek Associates, LLC, and Wood Resources International, LLC, “Illegal”
Logging and Global Wood Markets:The Competitive Impacts on the U.S. Wood Products
Industry, prepared for American Forest & Paper Association (Nov. 2004), 154 pp. Hereafter
referred to as Illegal Logging and Global Markets.
3 World Bank, A Revised Forest Strategy for the World Bank Group (Washington, DC: Oct.
31, 2002).
4 Natural Resources Defense Council, Trade in Bigleaf Mahogany: The Need for Strict
Implementation of CITES (Sept. 2006), available at [http://docs.nrdc.org/international/int_
06090001A.pdf].
5 Illegal Logging and Global Markets.

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Scope and Scale of Illegal Logging
No internationally accepted definition of illegal logging exists, and there is
considerable debate over definitions that have been presented. For example, logging
without a government-approved management plan may be legal in parts of the United
States, but illegal in Brazil.6 Definitions of illegal logging can be specific or broad.
Illegal logging can be broadly defined as “large scale, destructive forest harvesting
that transgresses the laws of the nation where said harvesting occurs.”7 An example
of a specific definition is provided by Conteras-Hermosilla,8 where 12 activities are
defined as illegal logging, including:
! Logging protected species;
! Duplication of felling licenses;
! Girdling or ring-barking, to kill trees so that they can be legally
logged;
! Contracting with local entrepreneurs to buy logs from protected
areas;
! Logging in protected areas;
! Logging outside concession boundaries;
! Logging in prohibited areas such as steep slopes, riverbanks, and
water catchments;
! Removing under/oversized trees from public forests;
! Extracting more timber than authorized;
! Reporting high volumes of timber extracted in forest concessions to
mask the volume taken from areas outside concession boundaries;
! Logging without authorization; and
! Obtaining logging concessions through bribes.
Due to the often clandestine nature of illegal logging, the variability in defining
illegal logging, and the difficulty of obtaining large-scale data on illegal logging
practices in many countries, estimates on the extent of illegal logging are difficult to
quantify. A variety of techniques are used to determine where illegal logging is most
prevalent. Examples include government records, court cases, witness accounts,
interviews, and satellite imagery. Using these data and other sources, some estimate
that the three countries where illegal logging is greatest (in terms of volume in 2003)
are Russia, Indonesia, and Brazil. Other estimates of illegal logging activities that
are derived from a variety of measures are presented from a sample of countries in
Table 1.
6 Illegal Logging and Global Markets.
7 M. R. Auer, D. Ingram, and C. Farley, Towards an Improved Understanding of Illegal
Logging and Associated Trade, U.S. Forest Service, International Programs (Washington,
DC, May 30, 2003).
8 A. Contreras-Hermosilla, Forest Law Enforcement: An Overview, World Bank Discussion
Paper (Washington, DC: June 19, 2003).

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Table 1. Estimates of Illegal Logging in Foreign Countries
Region/Country
Assessment
Source
Malaysia
One third or more of forest exports
Dudley et al., 1995;
were illegal in the 1990s.
Illegal Logging and
Global Markets.
Cambodia
90% of the logging is estimated to be
Auer et al., 2003;
illegal.
Illegal Logging and
Global Markets.
Laos, Cambodia,
Almost all timber exports in the early
Dudley et al., 1995;
Thailand, and the
1990s were illegal. Others estimate
Illegal Logging and
Philippines
that 40%-45% of logging is illegal.
Global Markets.
Indonesia
95% of timber exports were obtained
Dudley et. al., 1995;
illegally in the early 1990s. In the
Environmental
mid-1990s, nearly 84% of timber
Investigation Agency,
concession holders failed to obey the
2001; Illegal Logging
law. Estimated 70%-80% of forest
and Global Markets.
production and imports are illegal.
Myanmar
Over half of the country’s forest
World Resources
exports were undeclared (i.e., illegal).
Institute, 1998.
Papua New Guinea
Several reports of bribing and
Glastra, 1999.
monetary losses due to illegal logging.
Philippines
16 million hectares of forest have been
Environmental
reduced to 70,000 today, mainly
Investigation Agency,
because of illegal logging.
2001.
Bolivia
Illegal deforestation is at least 4 times
Contreras-Hermosilla,
as high and maybe up to 8 times as
1997.
high as legal deforestation.
Brazil
80% of the logging in the Brazilian
Dudley et al., 1995;
Amazon is considered illegal. Others
Illegal Logging and
estimate that the percentage of illegal
Global Markets.
logging varies widely (i.e., 20%-90%),
yet concur that illegal logging is most
prevalent in the Brazilian Amazon.
Russia
About 20% of the logging in Russia
Greenpeace, 2000;
violates the law. Russia has about
Illegal Logging and
20%-50% illegal forest production and
Global Markets.
imports.
Tanzania
Approximately 500,000 hectares are
Glastra, 1999.
harvested annually to illegal logging.
Cameroon
About a third of the timber processed
Glastra, 1999; Illegal
for local markets is obtained illegally.
Logging and Global
Approximately 50% of logging is
Markets.
illegal.

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Region/Country
Assessment
Source
Liberia
Approximately 80% of logging is
Illegal Logging and
illegal.
Global Markets.
Ghana
As much as a third of the timber
Auer et al., 2003;
harvested in the 1990s may have been
Illegal Logging and
illegal. Estimated 34%-60% of
Global Markets.
logging is illegal.
Note: Estimates of illegal logging and illegal imports are not based on a common definition of illegal
logging and could vary considerably from the year data was reported.
Sources: A. Contreras-Hermosilla, “The Cut and Run Course of Corruption in the Forestry Sector,”
Journal of Forestry, v. 95 (1997); Environmental Investigation Agency, Timber Trafficking
(Washington DC, Sept. 1, 2001); M. Auer et al., Towards an Improved Understanding of Illegal
Logging and Associated Trade, U.S. Forest Service International Programs (Washington, DC, May
30, 2003); Dudley et al., Bad Harvest? The Timber Trade and the Degradation of the World’s Forests
(London: Earthscan, 1995); R. Glastra (ed.), Cut and Run: Illegal Logging and Timber Trade in the
Tropics (Ottawa, Canada: International Development Research Center: 1999); Greenpeace, Illegal
Forest Felling Activities in Russia (Amsterdam, 2000); World Resources Institute, Logging Burma’s
Frontier Forests, Global Forest Watch (Washington, DC, 1998); and Illegal Logging and Global
Markets.
Illegal logging exists in the United States, but is primarily done by individuals
or small operations. Some report that up to 10% of forest production in the U.S. is
illegal.9 The U.S. Forest Service estimates that approximately one out of every 10
trees harvested in national forests is taken illegally. Private lumber companies
estimate that nearly 3% of their cut trees are stolen, amounting to losses of
approximately $350 million annually.10 Statistics for illegal logging on private lands
are unavailable, yet are anecdotally quoted as a serious problem.11
Some countries allegedly contribute to illegal logging by importing illegally
obtained wood products. For example, China is a major importer of timber from
Gabon, Cameroon, Equatorial Guinea, and Mozambique, all of which export illegally
harvested timber. Others contend that some of the illegal timber imported by China
is manufactured into products that are re-exported to the United States.12 The
European Union (EU) has also been accused of importing illegally logged wood; the
World Wildlife Fund estimates that the EU is spending £3 billion a year on illegal
wood, much of it coming from the Amazon Basin, the Baltic States, the Congo Basin,
east Africa, Indonesia, and Russia.13
9 Illegal Logging and Global Markets.
10 M. Mendoza, “Thieves Steal Hundreds of Millions of Dollars in Trees Yearly From
American Forests,” San Francisco Chronicle, May 17, 2003.
11 Ibid.
12 Testimony of Mr. Allan Thorton, President of Environmental Information Agency,
hearing on China’s Influence in Africa, House International Affairs Subcommittee on
Africa, Global Human Rights, and International Operations, 109th Cong., 1st sess. (July 28,
2005), H.Rept. 109-74.
13 World Wildlife Fund, Failing the Forests: Europe’s Illegal Timber Trade (Nov. 2005),
(continued...)

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Ecological Impacts of Illegal Logging
Several ecological impacts can be associated with illegal logging practices.
These impacts depend on how illegal logging practices are defined and where they
occur. If illegal logging is characterized as large-scale destructive logging, it can
potentially lead to the conversion of forests to grassland, depletion of plant species
(e.g., tree species such as mahogany), and in some cases depletion of animal
populations that depend on the habitats being logged. If logging illegally occurs in
protected areas, important biological resources (e.g., rare plant and animal species)
may become threatened. If logging is not done according to mandated management
plans, it can potentially lead to collateral damage, whereby other tree species and
younger trees are damaged, risk of fire is increased, and potential for sustainable
harvesting of timber is lowered.
In some instances in the tropics, logging has been characterized as the initial
stimulus for road-building, which leads to greater access to primary forests. If illegal
logging occurs in protected areas, improved access to these areas through logging
roads may lead to further activities such as clear-cutting, ranching, and agricultural
development in the area.
Socioeconomic Impacts of Illegal Logging
Illegal logging can have economic impacts in the countries where it occurs. In
several countries where illegal logging takes place, the volume of timber extracted
illegally is greater than the official harvested total. Further, illegal logging and trade
are connected to other illegal activities such as corruption, tax evasion, and money
laundering, among other things.14 If illegal logging is prevalent in a country, there
may be a low propensity to invest. For example, illegal logging may signal that law
enforcement is lax and that corruption is prevalent. These factors may deter long-
term investment in these countries and may increase costs for investors already
involved in the country. One definition of illegal logging is extracting timber without
reporting it to government officials. Without reporting, governments cannot assess
taxes on the wood being extracted, which results in a loss of revenue for the country.
For example, Indonesia estimated that its losses from illegal logging are $3 billion
annually, which is equivalent to more than 45% of the total value of its legitimate
exports of wood and wood products, valued at $6.5 billion annually.15
Illegal logging can arguably have a positive economic impact. Illegal logging
can create jobs in impoverished areas, provide short-term low-cost timber, and satisfy
excessive timber demands from within the country and importing countries. If local
governments and citizens perceive that illegal logging is beneficial to the community,
13 (...continued)
97 pp.
14 Food and Agriculture Organization, International Tropical Timber Organization, Best
Practices for Improving Law Compliance in the Forestry Sector (Forestry Paper 145, Rome,
Italy: 2005), 113 pp.
15 “Down in the Woods,” The Economist (May 23, 2006).

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some will not seek the enforcement of laws or will attempt to legalize illegal timber
to preserve revenues.16
Illegal logging can affect local communities in the countries where it is
occurring. Local communities may depend on forests for non-timber forest products
(e.g., fruits and medicines) as well as for habitat and cover for wild game and fish.
Illegal logging in these areas may convert forest ecosystems to less useful ecosystems
such as grasslands or savannahs. In some parts of the world, illegal logging has been
termed “conflict logging,” similar in meaning to conflict diamonds. For example,
money earned from the illegal trade in wood has been traced to the purchase of
weapons used in conflicts such as the one between Liberia and Sierra Leone.17
International Initiatives and Institutions
Several relevant multilateral and international agreements relate to illegal
logging and illegal timber trade. These range from voluntary agreements that, for
example, allow consumer countries to exchange data with producing countries, to
legally binding multilateral agreements that enable signatory governments to seize
illegal products and exercise financial penalties on illegally produced timber. This
section reviews some of the agreements that have been implemented and some
international institutions involved in addressing illegal logging.18
Wood Certification Programs. Two primary wood certification programs
affect wood consumed in the United States.19 The Forest Stewardship Council (FSC)
is an independent, international nongovernmental organization that certifies that
wood comes from well-managed forests that meet an established set of criteria. One
key criterion is that the “chain of custody” information is provided. This information
strives to contain the names and locations of each handler of the wood from the forest
it came from to the shop where the product is being sold. Approximately 220 million
acres are certified under the FSC program worldwide. (Approximately 110 million
acres are in North America.) A second certification program is offered by the
Sustainable Forest Initiative (SFI), which was created by the American Forest and
Paper Association (AF&PA) and is now independent.20 SFI also contains a set of
guidelines and principles that must be followed to earn its certification. SFI
certification is done for North American forests and does not have a “chain of
custody” requirement. Approximately 107.8 million acres are certified under this
16 L. Tacconi et al., Learning Lessons to Promote Forest Certification and Control Illegal
Logging in Indonesia (Center for International Forestry Research, Jakarta, Indonesia: 2004),
82 pp.
17 H. LaFranchi, “With Mahogany, Bush Goes a Shade Greener,” The Christian Science
Monitor, Nov. 21, 2002, p. 2.
18 For more information, see out-of-print CRS Report RL30544, Selected International
Forest Agreements and Programs, by Carol Hardy-Vincent and Susan R. Fletcher, available
from the author.
19 Forest certification is the process by which the performance of on-the-ground forestry
operations is assessed against a predetermined set of standards.
20 AF&PA represents wood and paper product producers in the United States.

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program in North America. Other certification programs exist in Canada, the EU,
and elsewhere. For reference, there are nearly 10 billion acres of forested land on the
Earth.21
Some contend that certification programs, if managed and monitored
consistently, could reduce illegal logging. Most certified forests are in Europe and
North America; only 8% of the total certified area is in developing countries (2% in
Asia and the Pacific, 3% in Latin America, and 3% in Africa).22 Others, however,
argue that obtaining certification in developing countries is prohibitively expensive
for most logging operations. Costs for managing forests to maintain certification,
disorganized bureaucracy, and lax rules make certification in developing countries
difficult.23 Some argue that certification is not worth it, because the demand for
certified tropical wood is not consistent from year to year and the cost to obtain
certification makes wood less competitive on the market. To increase the demand
for certified wood and to stimulate interest in certification, some have suggested that
importing countries require certified wood for government projects. Five countries
in the European Union, including Great Britain, have implemented or are trying to
implement policies that would require state-financed construction projects to use
certified wood.
United Nations. The United Nations Forum on Forests is an
intergovernmental forum that promotes the sustainable development, management,
and conservation of forests. It aims to provide a multi-year program of work to
develop policies regarding forests with the goal of developing a legal framework on
all types of forests.
International Tropical Timber Organization (ITTO). The ITTO promotes
sustainable forest management, including forest enforcement, among its member
countries, which include the United States. The ITTO was established under the
International Tropical Timber Agreement, which expired in December 2006. A
successor agreement is currently being negotiated. The ITTO provides a framework
for collecting data on the trade of illegal timber and investigates import and export
data that represent illegal trade.
World Bank. The World Bank is the largest of several regional and
international development banks that lend money to developing countries for projects
identified by the host country. The World Bank has taken steps to assess projects for
their environmental consequences, including the potential for illegal logging. In a
revised Forest Strategy, the World Bank has proposed to address illegal logging
through sustainable forest management and certification. In collaboration with the
World Wildlife Fund, the World Bank is establishing a program for certifying
21 Food and Agriculture Organization of the United Nations, Global Forest Resources
Assessment, 2005, available at [http://www.fao.org/forestry/foris/data/fra2005/kf/common/
GlobalForestA4-ENsmall.pdf]
22 C. Fischer et al., Forest Certification Standards: Toward a Common Standard (Resources
for the Future Discussion Paper, Washington, DC: Apr. 2005), 28 pp.
23 Ibid.

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sustainably managed forests. Under this program, logging operations must show
progress toward sustainability to achieve their certification, as opposed to having
already met all of the certification requirements.
G8 Illegal Logging Dialog. This initiative is convening legislators from the
G8 (Canada, France, Germany, Italy, Japan, Russia, United Kingdom, and United
States), China, India, and other timber-producing nations with industry
representatives and other stakeholders to develop a plan for addressing illegal
logging. The dialog began in 2006 will run until the end of the G8 meeting in 2008.
U.S. Laws That Address Illegal Logging
The United States has no specific laws that address all aspects of illegal logging.
Logging within the United States is addressed by several laws and regulations —
some federal, but many state — that depend on what species is logged, and where
and how it is done. Logging can be restricted or banned if it affects species listed
under the Endangered Species Act (ESA; 16 U.S.C. §§1531-1543). ESA also
regulates the import of foreign species if they are listed as threatened or endangered
under the act.
ESA authorizes the participation of the United States in the Convention on the
International Trade in Endangered Species of Wild Flora and Fauna (CITES). CITES
was established to protect plants and animals from unregulated international trade.24
Under the treaty, countries make a commitment that any trade in protected plant and
animal species will be sustainable, and that there is a process to ensure that wildlife
trade is consistent with the treaty. U.S. imports of wood and wood products from
tree species listed on CITES are regulated according to their status under the treaty.
Currently, 15 tree species are listed as trade-restricted under CITES. Regulating
timber species listed under CITES has been controversial. For example, big leaf
mahogany and ramin are listed in Appendix II of CITES, which regulates trade
through export permits. Several allegations contend that mahogany and ramin have
been imported in the United States without proper CITES permits and authorizations.
The Tropical Forest Conservation Act (P.L. 105-24; 22 U.S.C. §§2431 et seq.)
indirectly addresses illegal logging by authorizing debt-for-nature transactions with
developing countries that provide funds for conserving tropical forests.25 Eligible
activities under this act include establishing, maintaining, and restoring parks,
protected reserves, and natural areas, and training programs to increase the capacity
of personnel to manage parks, among other things. Several countries have used funds
generated from transactions authorized under this act to monitor logging activities
and train enforcement personnel to address illegal logging activities in protected
areas. Expenditures to address illegal logging are also provided in programs
authorized by the Foreign Assistance Act (P.L. 87-195; 22 U.S.C.§§2151p-1). A
24 For more information on CITES, see CRS Report RL32751, The Convention on
International Trade in Endangered Species of Wild Fauna and Flora (CITES): Background
and Issues, by Pervaze A. Sheikh and M. Lynne Corn.
25 See CRS Report RL31286, Debt-for-Nature Initiatives and the Tropical Forest
Conservation Act: Status and Implementation, by Pervaze Sheikh.

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CRS-9
portion of funds given to countries is used for activities to prevent illegal logging and
enforce illegal logging laws. Some activities funded under this act are a part of the
Administration’s initiative against illegal logging. (See “Foreign Policy on Illegal
Logging” section, below.)
Some argue that the United States should enact legislation prohibiting the
import of illegally logged wood and wood products, and amend the Lacey Act (16
U.S.C. §§3371-3378) to include foreign plant species. The Lacey Act includes
enforcement mechanisms for the illegal trade of wildlife within the United States.
Specifically, the Lacey Act makes it illegal to engage in the trade of fish, wildlife, or
plants taken in violation of any U.S. or Indian tribal law, treaty, or regulation, as well
as the trade of any of wildlife acquired through violations of foreign law or treaties
(including CITES).26 The Lacey Act does not address plants that are traded in
violation of any foreign law or treaties. A plant is not covered under the Lacey Act
unless it is indigenous to a state.
Amending the Lacey Act to include plants traded in violation of foreign laws
would establish legal structures to prosecute parties who import and trade wood
found in violation of other countries’ forest laws. H.R. 1497, introduced March 13,
2007, would amend the Lacey Act to include plants harvested or taken illegally in
areas outside the United States. This pending legislation would apply to illegally
harvested timber species imported into the United States.

Foreign Policy on Illegal Logging
In 2003, the United States developed an initiative to help developing countries
stop illegal logging. This initiative adopted several approaches to address illegal
logging: addressing legal and institutional barriers that prevent on-the-ground law
enforcement of illegal logging;27 using technology to monitor logging; encouraging
good business practices, legal trade, and transparency in logging; and creating
incentives to promote local communities to abolish illegal logging practices.28 The
initiative focuses on five regions: the Congo Basin, the Amazon Basin, Central
America, South Asia, and Southeast Asia. The initiative states that it will provide
$15 million to address illegal logging. In the Congo Basin, the U.S. government has
developed the Congo Basin Forest Partnership. This partnership is aimed at
improving forest management and governance to reduce forest degradation and
reduce illegal logging in the region.29
Earlier sanctions of illegal logging activities by the United States were directed
to single countries (e.g., Cambodia, Burma, and Indonesia). Report language of some
26 Section 4(b) of the ESA.
27 On-the-ground enforcement is enforcing laws that pertain to illegal logging in timber-
producing areas.
28 M. Auer et al., Towards an Improved Understanding of Illegal Logging and Associated
Trade, U.S. Forest Service, International Programs (Washington, DC: May 30, 2003).
29 The Congo Basin Forest Partnership was authorized under P.L. 108-200 and has received
an average of $15.7 million annually from FY2004 to FY2006.

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congressional appropriation acts have included provisions that indicate the intent of
Congress to provide funds to stop illegal logging.30
Free Trade Agreements. Bilateral free trade agreements between the United
States and other nations have sometimes been criticized for deficient environmental
rules that may have implications for illegal logging. For example, some argued that
a free trade agreement (FTA) with Singapore increased U.S. imports of illegally
obtained timber from Singapore. Singapore acquires wood from countries such as
Indonesia and Malaysia, which allegedly harvest large portions of their timber
illegally, and re-exports it to the United States. The United States addressed illegal
logging during negotiations with Indonesia on a pending FTA. In 2006, the United
States and Indonesia signed a memorandum of understanding (MOU) to enhance
bilateral efforts to combat illegal logging and associated trade. The United States
committed $1 million with this agreement to fund projects that would reduce illegal
logging in Indonesia, such as using remote sensing to identify illegally logged tracts
of land. The MOU also sets up a working group to assist in implementing the
initiative under a pending U.S.-Indonesia Trade and Investment Framework
Agreement.31
Similarly, some contend that an FTA with Peru, if implemented, could lead to
an increase in exports of illegal logged timber to the United States from Peru. The
primary species of concern is Peruvian big leaf mahogany (Swietenia macrophylla).
The United States is the predominant importer of Peruvian mahogany. Big leaf
mahogany is currently listed under CITES as an Appendix II species. To meet CITES
requirements for this species, the United States (and CITES) requires an export
permit from Peru validating that mahogany entering the United States was harvested
in a sustainable manner that is not detrimental to the species.
Some contend that Peruvian mahogany is being harvested illegally and at rates
detrimental to the species and to the Amazon rainforest in Peru. Further, they
contend that export permits provided by Peru, as required by CITES, have been
granted without sufficient monitoring and assessment of harvesting practices.32 If the
U.S.-Peru Trade Promotion Agreement (TPA) is approved by Congress, some critics
contend that there would be an increase in illegal mahogany extraction and greater
exports of illegally harvested mahogany to the United States. As written, the U.S.-
Peru TPA would increase protections for foreign investors engaging in business in
Peru, which may lead to a larger timber industry in Peru and greater mahogany
30 For example, conference managers of the FY2003 omnibus appropriations bill (P.L. 108-
7) expected a portion of funds appropriated to the U.S. Agency for International
Development (USAID) for protecting biodiversity to be used to support projects that deter
illegal logging in Indonesia, Central Africa, and elsewhere (§554 of H.Rept. 108-10).
31 Memorandum of Understanding Between the Government of the United States and the
Republic of Indonesia on Combating Illegal Logging and Associated Trade, Nov. 16, 2006,
at [http://ustr.gov/assets/World_Regions/Southeast_Asia_Pacific/asset_upload_file619_
9974.pdf].
32 Natural Resources Defense Council, The Trade in Bigleaf Mahogany: The Need for the
Strict Implementation for CITES, at [http://docs.nrdc.org/international/int_06090001A.pdf].

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harvesting. The TPA would not alter the requirement for export and permits under
CITES.
These concerns may be tempered by potential positive consequences of the TPA
on the illegal logging of mahogany. The pending TPA between Peru and the United
States may increase awareness of illegal logging in Peru, and would add additional
mechanisms that may be used to address illegal logging in Peru. The TPA would
require each country to effectively enforce its own environmental laws in a manner
affecting trade between the parties, and would establish a policy mechanism to
address public complaints that a party is not effectively enforcing its environmental
laws whether or not the failure is trade-related.33 Complaints could be filed by
individuals and firms of each party to the agreement and would be addressed
according to a set of procedures outlined in the TPA.34 A separate dispute settlement
mechanism would also be available for trade-related complaints by one TPA party
against another. Further, the TPA stipulates that nothing in its investment chapter
would prevent a party from adopting, maintaining, or enforcing any measures that
would ensure that investment activity is conducted in a manner sensitive to the
environment.35
33 United States-Peru Trade Promotion Agreement, Chapter 18, Environment, at [http://
www.ustr.gov/Trade_Agreements/Bilateral/Peru_TPA/Final_Texts/Section_Index.html].
34 Ibid.
35 United States-Peru Trade Promotion Agreement, Chapter 10, Investment, at [http://
www.ustr.gov/Trade_Agreements/Bilateral/Peru_TPA/Final_Texts/Section_Index.html].

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