Transaction Verification

It is essential to limit inaccurate claims in FSC-certified supply chains. This is especially true for high-risk supply chains. Transaction verification is the verification process required by the FSC chain of custody standard to ensure that FSC output claims made by certificate holders are accurate and match the FSC input claims of their trading partners.

FSC Transaction Verification
FSC Denmark / Bablu Singh

Comparing and verifying

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. The standard stipulates as follows:

“1.7: The organization shall support transaction verification conducted by its certification body and Accreditation Services International (ASI), by providing samples of FSC transaction data as requested by the certification body.”

The intention of this criterion is to ensure that FSC systematically investigates high-risk product types, species and regions, and limits the amount of inaccurate transactions. All FSC chain of custody certificate holders are subject to transaction verification. Only relevant data taken from invoices will be collected and no financial information will be required.

Process

Steps 8 to 10 may be repeated several times for supply chains deemed high-risk.

step
01

Identification of potential risk

Consistent rumours or indications of high risk in a supply chain

 

step
02

Verification of risk

Investigation by ASI to verify level of risk. Spot-audits are part of verification.

step
03

Risk evaluation report sent to FSC

ASI sends evaluation of risk level to FSC with recommendation of further action.

step
04

Recommendation by supply chain integrity experts to FSC Board of Directors

FSC's Supply Chain Integrity Team recommends further action to FSC Board of Directors on the basis of ASI investigation.

step
05

Decision to implement transaction verification

Decision by the FSC Board of Directors to implement transaction verification in the supply chain.

step
06

Notification to all certification bodies

All certification bodies are notified by ASI about upcoming transaction verification request, including timeline and affected certificates.

 

step
07

Information to affected certificate holders

Affected certificate holders are notified by their certification body.

step
08

Call for transaction verification data

Affected certificate holders are requested to provide transaction verification data for a specified period of time.

step
09

Transaction data is analysed 

Transaction data is forwarded by certification body to ASI who analyse and verify. Mismatching claims are investigated further.

step
10

Action taken on mismatches

In case of evidence of fraudulent actions by certificate holders, action is taken by FSC Legal unit, FSC Supply Chain Integrity and ASI.

FAQs

  1. 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.

    FSC has developed the 'Falcon' tool to assist certificate holders subject to transaction verification in their preparation of the data requested. Alternatively, certificate holders can opt for an on-site audit, in which case transaction information will be collected manually by their auditor who will forward the details to ASI to verify.

  2. 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.

    Read more on this: FSC Board Approves Plan To Address False Claims In The FSC System

  3. 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.

  4. Who will be processing the data?

    Certification Bodies provide the transaction data to ASI for investigation through verification that FSC output claims made by certificate holders are accurate and match with the FSC input claims.  This check-and-balance system is essential for a third-party certification system like FSC, which cannot be waived.

    Note: Processing of business sensitive and confidential data is lawful as processing is necessary in order to ensure compliance with the FSC Certification scheme to which the data subject is party.

  5. What happens if data from two trading parties does not match?

    When ASI verifies that transactions do not match between trading partners, ASI informs the applicable certificate holders’ Certification Bodies to request additional information for further investigation.

  6. Will FSC have access to the submitted data and store it?

    In carrying out transaction verification, FSC does not expect or require receiving, accessing or processing Transaction Verification data.  However, FSC does receive all relevant information and data regarding non-conformities identified via ASI investigations, so that FSC can take the appropriate measures to protect the FSC scheme and FSC’s reputation.  FSC has the appropriate legal agreements with ASI and Certification Bodies to handle such data and information.

Documents

FSC-DIS-40-009 Transaction Verification_Alternatives for strengthening and streamlining the FSC CoC.pdf
PDF, Size: 655.37KB