TIMBER ACQUISITION

HOW DID A UNITED STATES COMMERCIAL CONSTRUCTION COMPANY ACQUIRE PERUVIAN VIRGIN TIMBER

In 2002-2003 a civil engineer from Ohio was selected to design and build a major road in Peru.  The construction company selected to construct the road was Trammell Industries, Inc.  As part of the process, Trammell was offered all of the standing timber that would be removed.  Trammell Industries opened, staffed and funded an office in Peru for two years.  In connection with the offer of the harvested timber, Trammell obtained a Concession Contract for the standing timber and a permit to harvest the timber.  The Concession Contract is the “Ownership” Document.  It shows who owns the rights to harvest the timber.  The Concession contract is good for 40 years and is transferrable. The Concession Contract is necessary to obtain the Permit to harvest the timber.  The Permit sets forth the requirements and conditions under which the timber is permitted to be harvested.  A permit cannot be obtained without first having a Concession Contract.  The permit is good for five years.  The permit is non-transferrable. Although the road project was never consummated, the Concession Contract remains valid until 2043.  The permit acquired was used to harvest 1,000,000 board feet of timber pursuant to a pilot project.  The purchaser of the rights under the Concession Contract would have to obtain a new permit.