EU farm ministers set to meet on Monday have instructed the EU's executive branch to draw up legislation to certify legal timber imports.
The global forestry products trade is worth about $150 billion a year.
One of the main aims of the legislation is to prevent the trade's laundered profits from being diverted into organised crime.
Currently, only a handful of EU member states designate crimes relating to illegal logging under money-laundering legislation.
“In some forest-rich countries, the corruption fuelled by profits from illegal logging has grown to such an extent that it is undermining the rule of law, principles of democratic governance and respect for human rights,” an EU statement said, AFP reported.
“In some cases the illegal exploitation of forests is also associated with violent conflict. Profits from the illegal exploitation of forests, and of other natural resources, are often used to fund and prolong these conflicts.”
Environmental groups estimate European imports of illegally-sourced timber are worth 1.2 billion euros ($1.4 billion) a year.
“Although the supply-side of the problem lies in timber-producing countries, strong international demand for timber can be exploited by unscrupulous operators and traders...encouraging illegal logging operations”
Under the planned scheme, once a country or a region becomes a signatory of the prospective Forest Law Enforcement, Governance and Trade (FLEGT) agreement, the EU will refuse to accept imported timber from them unless it is certified legal.
The EU represents a vast market in both legal and illegally harvested timber.
The 15-member region is the largest importer of plywood and sawnwood from Africa and the second largest from Asia, as well as a key market for Russia.
“Although the supply-side of the problem lies in timber-producing countries, strong international demand for timber can be exploited by unscrupulous operators and traders...encouraging illegal logging operations,” the ministers said.
In the draft law to be prepared by mid-2004, the EU will target southeast Asia, south America, central Africa and Russia.
Half of global trade in tropical timber is illegally produced and causes severe environmental consequences, environmental groups say, citing estimates for 1990-95 that show a net forest loss equal to 33 soccer fields a minute.