What is Transaction Verification

Transaction Verification

Transaction verification is a process of comparing and then verifying all transactions within a specific product type, group or region over a given time period.

Certification bodies will be notified when transaction verification is necessary. Certificate holders will also be informed, and will cooperate with their certification body to provide the required data.

How do certificate holders forward transaction data?

Certificate holders can submit their data using pre-defined formats supplied by FSC. The format requires information on volumes bought and sold, as well as unique identifiers such as invoice numbers.

How do certificate holders know if they are subject to transaction verification?

Certification bodies will notify the affected certificate holders, providing clear instructions, timelines and requirements of the specified transaction verification loop.

Who will process the data that is submitted for transaction verification and is a non-disclosure agreement signed as part of the process?

Transaction verification is a certification activity carried out by Certification Bodies with their clients, and Certification Bodies collect the transaction data from their client certificate holders.

As with all certification activities, and according to FSC-STD-20-001, clause 1.8, the Certification Body “shall be responsible, through legally enforceable commitments, for the management of all information obtained or created during the performance of certification activities”. According to FSC-STD-20-001, clause 2.4.2, the Certification Body must have established procedures to “define the controls needed for the identification, transport, transmission, storage, protection, retrieval and disposition of its records related to the implementation of FSC requirements, including controls to safeguard confidentiality”. Therefore, if a certificate holder has concerns on matters regarding certification activities, including Transaction Verification, the certificate holder should raise these concerns with its Certification Body.

Certification Bodies must have the necessary agreements with their clients to comply with the requirements of FSC-STD-20-001.

What happens if a certificate holder refuses to provide transaction data to their certification body?

The refusal to provide transaction data represents a breach of the contractual agreement between the organization and the certification body. If the information is not provided within the time frame requested by the certification body, the certificate holder will be issued a CAR or have their certificate suspended and/or terminated.

What are the consequences for uncertified businesses that are found making false and/or inaccurate claims?

Fraud and misuse of the FSC label by non-certificate holders are dealt with through the FSC legal office and trademark enforcement team, which investigate false use of FSC trademarks for non-eligible products and take legal action when needed.

What is the difference between false claims, inaccurate claims, and fraud?

‘Fraud’ is the term used for intentional false claims within the FSC system. ‘False claims’ happen when a product that is not eligible to be sold as FSC certified is sold with FSC claims on its sales documents. False claims can be intentional or not. They are only considered fraud when it can be proven without a doubt that the claim was made intentionally. ‘Inaccurate claims’ are where a product that is eligible to be sold as FSC certified is sold with the wrong claim (e.g. a product that should be sold as FSC Mix is sold as FSC 100%).

What information must be provided to fulfil the transaction verification requirement?

The data required for each TV loop may vary but generally will include information on trading partner (e.g. name, FSC CoC code), quantity, units, FSC claim type and species. Other data may be requested such as transaction identifier (e.g. invoice number), transaction date, description of products, country of origin, etc. No financial information will be required. The data will be collected on a sample basis, usually relating to a specific species, product type or timeframe in a specified format. The size of the sample requested will be determined by FSC and ASI based on risk. Auditors may also request access to shipping documents, invoices, or similar for confirmation.

Source: fsc.org