Preliminary Results of the Eurasia Birch Wood Panel Investigation

In 2024, FSC and Assurance Services International (ASI) launched a transaction verification (TV) loop on FSC-certified birch wood panels in China and Europe. The preliminary results from the first phase of the TV loop – data collection and analysis – reveal a number of integrity risks in certified birch wood panel supply chains. The risks will be evaluated in the next stages of the investigation. The objective of this TV loop was to identify trading patterns and volumes of certified birch wood panels from producer markets in China and Eastern Europe to consumer markets in Europe.

The TV loop captured 3,436 transactions that took place in 2023, as reported by 665 certificate holders with physical possession of certified material from 18 countries in the Eurasian region. They are Bosnia and Herzegovina, Bulgaria, China (including Hong Kong), Latvia, Romania, Slovakia, Croatia, the Czech Republic, Estonia, Georgia, Greece, Hungary, Lithuania, Moldova, Poland, Slovenia, Serbia, and Ukraine.  

Key findings of the TV loop

Some of the key findings and the integrity risks they pose to certified birch wood panel supply chains are:

• Around 74 % of the certificate holders reported zero transactions (no purchases or sales) of birch products, many of which were from China. This is indicative of a potential risk because there are multiple stakeholder reports alleging a large supply of birch products originating in China.
• Concerning cases of potential volume mismatch: some certificate holders reported purchases while their suppliers reported zero sales. Additionally, some certificate holders declared the purchase or sale of specific (‘zero transaction’) Betula species that were not within the suppliers' certificate scope or geographic region.
• A large volume of birch logs purchased from Ukrainian forests may potentially originate from the conflict area. In light of the current suspension of the FSC certificates in specified conflict zones, the reported volume of domestic purchases from Ukrainian forest management units and the volume of wood panels exported from Ukraine are a cause for concern. 
• None of the certificate holders participating in this TV loop declared any purchase or sale of birch from Russia within the scope of their FSC certification. However, potential mismatches between the volume of wood purchased and sold through the supply chain may be a result of non-certified wood (including that from Russia) entering the certified supply chains.

Next steps in investigating integrity risks

In the second phase of the TV loop, ASI will look into eight supply chain clusters as they have shown signs of potential integrity risks. Through the ongoing – and parallelly running – birch plywood TV loop, ASI is also conducting a deeper investigation into certificate holders with potential volume mismatches in the Eurasian region.

Based on the analysis of data collected in this TV loop’s first phase, FSC and ASI have expanded the scope of the investigation. In the second phase, ASI will add two new elements to the TV loop’s scope, beyond the eight high-risk supply chains selected for further investigation.

1. ASI will include transaction data from an additional nine certificate holders who are brokers and traders without physical possession of certified material in the investigation phase of this TV loop. Volume mismatches detected in their transactions will be investigated further.
2. ASI will further investigate the upstream supply chains of birch wood panels originating from Ukraine. The investigation will target supply chain clusters linked to suspended/terminated certified forests.

FSC is addressing the potential risk associated with a significant number of certificate holders reporting ‘zero transactions’ through a new Advice Note published on 1 April 2025. According to this Advice Note (available in page 12 of this document), a certification body must conduct a yearly audit for any FSC-certified company operating in China, even if the company reported no FSC-related sales activity.

Eurasian integrity strengthening initiative

In addition to this TV loop, FSC and ASI are monitoring the flow of certified birch in the supply chains through other channels as well. The TV loop is a part of a larger integrity strengthening initiative called the Eurasia Integrity Workplan. FSC is also assessing if any certificate holder is violating the Policy for Association by trading Russian birch in countries where it is illegal. The illegal trade of Russian birch is being discussed by different stakeholders, including the media. FSC and ASI are recording allegations made in these discussion spaces and addressing them according to ASI’s incident handling process.

Relevant information from the above-mentioned sources accompanied by clear and convincing evidence will be incorporated in this TV loop’s ongoing investigation phase. If FSC detects the presence of Russian birch in its certified supply chains, or any other malicious or fraudulent behaviour, FSC will take strong action, such as blocking the certificate holder or disassociating from it.