Direct contracts for timber sales may be canceled: how they want to change market rules
In Ukraine, it is proposed to comprehensively change the rules for the functioning of the raw timber and firewood market. Legislators propose to introduce new timber sales mechanisms, increase trading transparency, and strengthen state control over the circulation of forest resources.
A bill "On the Market of Unprocessed Lumber and Firewood" No. 15389 has been registered in the Verkhovna Rada, which aims to regulate relations related to the circulation, purchase and sale, and other operations with timber.
The bill aims to make the timber market more transparent
As the authors note in the explanatory note, the document was developed for the comprehensive regulation of activities in the timber market, the development of market relations in the forest industry complex, and ensuring enterprises engaged in woodworking with raw materials on the principles of fair competition.
A separate goal of the bill is to prevent deforestation, avoid the destruction of forests, and prevent harm to them.
The document should also define the legal, economic, and organizational foundations for the functioning of the timber market and regulate the interaction between state bodies and business entities operating in this field.
What is proposed to change
The bill provides for the termination of the practice of concluding direct purchase and sale contracts for timber by permanent forest users, which, according to the authors, created corruption risks due to the possibility of manipulating their conditions.
Among the main innovations proposed are:
- clearly delineate the powers and responsibilities of state bodies in regulating the timber market;
- create an authorized state body responsible for the functioning of the market;
- introduce a separate cluster for small woodworking enterprises with a special exchange trading procedure;
- make the disclosure of information about timber sales volumes, prices, and buyers mandatory;
- ensure open access for all market participants to information about timber and timber product sales;
- create conditions for the maximum sale of harvested timber and its processing into high value-added products;
- establish liability for market manipulation and other violations that distort competition;
- create a special Commission to consider complaints regarding timber trading.
The authors believe that the adoption of the law will allow the introduction of transparent market operation rules, ensure more effective state and public control over timber harvesting and sales, and contribute to the fight against illegal logging and timber sales.
It is also expected that the creation of an effective timber market will promote the development of the woodworking industry, increase economic activity, boost gross domestic product, and increase revenues to the state budget of Ukraine.
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