Timber industry advocates are calling for extra scrutiny after a quarter of products tested in a verification trial were found to be "potentially misleading".
Department of Agriculture, Fisheries and Forestry acting director Madeleine Osborn said illegal logging was "one of the most profitable trans-border environmental crimes in the world", with devastating impacts on climate, nature and people.
"Between 15 and 30 per cent of all timber traded globally is potentially illegally logged, and 10 per cent potentially in the Australian market that's illegally sourced," she said.
Under new laws, government officials can test some imported timber products to check species and country of origin.
The products could eventually be used in floors and decks, furniture and furnishings, notepads, toilet paper, tissues or pre-fabricated buildings.
Officials used DNA analysis as part of the trial. (Supplied: Department of Agriculture, Fisheries and Forestry)
'A fingerprint database'
A trial, which ended in June, tested more than 140 products and 39 distinct species.
Ms Osborn said it used a range of techniques including analysis of DNA, trace elements, wood anatomy and fibres.
"We chose [technologies] that have fairly robust reference databases," Ms Osborn said.
"You can compare that to a fingerprint database that the police use.
"You have to have something to be able to match your results against, so building those reference databases is a real priority."
Ms Osborn says a quarter of products tested were misrepresented on the market. (Supplied: Department of Agriculture, Fisheries and Forestry)
Ms Osborn said about 25 per cent of products tested had inaccurate species and origin claims.
"It wasn't a random test, so we can't say that that's the full representation of what's happening on the market," she said.
"But it certainly suggests that there's room for improvement.
"The information that [importers] are being provided by their overseas suppliers is potentially misleading."
The trial found multiple instances of undeclared veneers and solid timber products with potential Russian origins.
It also found a significant amount of undeclared content in paper products.
There was also uncertainty around the origin of some products declared as Burmese teak, and misleading information for oak from Europe and the US.
Australian Forest Products Association chief executive Diana Hallam said illegal timber was a considerable challenge but testing had previously been quite difficult.
"We import timber products that are effectively 25 layers of timber compressed very tightly together, and testing has not been possible without some of the new technologies," she said.
Call for labelling laws
Ms Hallam was surprised by the scale of the trial's findings.
"I didn't think it would be as high as one in four," she said.
"That has increased our interest in speaking with the government about country-of-origin labelling laws for timber and timber products.
"We want a very strong compliance and enforcement regime and we want country of origin labelling so that Australians can go into their local … hardware store, select some timber, and have confidence in where it has come from."
Diana Hallam says buying Australian timber products is the best option. (ABC News: Richard Willingham)
Ms Hallam said it should be easier for customers to buy Australian-grown timber.
"I was involved in reforming the country-of-origin labelling food laws, and I know consumers want that information," she said.
"I would like to see more support from the government into implementing a regime similar to that we have in food.
"You should be very clear about whether it's Australian and where it's sourced."
The Department of Agriculture, Fisheries and Forestry is considering the trial's findings.