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An investigation by the European Commission has confirmed the circumvention of anti-dumping duties by firms buying plywood from Turkey and Kazakhstan. The investigation found evidence of laundering of finished Russian plywood – a breach of EU sanctions put in place following the Ukraine invasion.
Inspectors also confirmed Turkish and Kazakh firms are using Russian raw materials to make birch ply for sale in Europe. The European Commission investigation found evidence of plywood made in Russia being simply laundered and re-labelled as of Kazakh or Turkish origin, something which should be of interest to authorities tasked with enforcing EU sanctions, both at EU and Member State level. Though not covered by sanctions, these sales are in clear breach of the EU Timber Regulation (EUTR), a law meant to halt illegal wood use in Europe.
Today Earthsight, which submitted evidence to the EU’s investigation, has filed EUTR complaints pertaining to 31 firms across nine member states whose suppliers were confirmed by the EU to be using Russian raw materials.
Almost 30% of Ukraine’s total forest area has been destroyed by conflict, with Russian armed forces logging Ukrainian forests and selling timber into global markets via “friendly countries.”
Russia is now facing a growing gap between timber production and log supply, with production growing 5% in 2024, while commercial logging of Russian forests has nose-dived 26%.
That is according to Lesprom’s “Russian Lumber Industry Insights,” which reports that Russian sawmills are now bleeding thanks to a critical shortage in raw materials and are struggling to meet rising demand from major export markets.
The problem for Russia is that Western Companies—which provided much of the foreign direct investment needed to modernise logging operations in the decades leading up to the 2022 war—have now exited the country on mass, creating large gaps in the Russian supply chain.
Poland is the new gateway for Belarussian timber, with the import of timbers (via Kazakhstan) surging. A joint investigation involving the Belarussian Investigative Center, Radio Free Europe, and Polish newspaper Gazeta Wyborcza alleges that Polish imports of timber from the largely deforested Kazakhastan grew from €14 million (pre-war) to more than €68 million last year as part of a €126 million global trade in conflict timber.
Also featured in Belarus evading EU sanctions by importing timber to Poland with false documents, finds investigation | Notes From Poland and Fraud Exposed: Poland Now EU’s Ground Zero for Conflict Timber | Wood Central
Sanctioned Russian birch plywood worth an estimated €40 million has been seized at Rostock Port in Germany. The ship was en route to the United States, but stopped in Germany for an emergency. The Canadian-owned shipping firm argue that the vessel’s cargo should be exempt, because it only docked in Germany due to an emergency. German Customs have rejected that argument. The wood may be linked to a Russian timber giant Sveza, which is part-owned by Alexei Mordashov, Russia’s richest man and a subject of EU and US sanctions.
Also reported here:
€40M of Conflict Timber Seized: How the US $2B Log Trade Fuels War | Wood Central
There is an import ban on Russian timber. In fact, EU sanctions are being circumvented on a large scale. Chinese companies play a key role, as frontal reveals.
Scientists are using state-of-the-art tech to correctly trace the flow of timbers entering the EU from Russia and Belarus and have developed a new framework that policymakers can use to eliminate conflict timber worldwide.
Developing the world’s largest reference database for Eastern European timber species (Betula, Fagus, Pinus, Quercus) tailored to sanctioned products; scientists can correctly predict, with 82% accuracy, “false claims” coming from Russia as well as harvest locations “within 180 to 230 km of the actual location.”
The European Commission has disclosed the findings of its anti-circumvention investigation into illegal imports of Russian birch plywood. The findings disclosed to relevant stakeholders show evidence that Russian birch plywood is being imported into the EU market through Kazakhstan and Türkiye to avoid paying anti-dumping duties. As Russian wood products are also subject to sanctions in the EU, the results of this investigation are expected to lead to further action by national authorities and the European Anti-Fraud Office (OLAF).
A cross-border probe, led by ICIJ and first published in March 2023, involved 44 media partners globally and documented how Western environmental auditing firms and governments failed to stop the trade of wood logged in conflict zones.
The findings supported a June investigation from ICIJ partners Paper Trail Media, Der Spiegel, ZDF and others that similarly revealed how Russian timber continued to circumvent the EU’s embargo, making its way into the bloc by routing through countries like China, Turkey, Kazakhstan and Kyrgyzstan.
When Russia invaded Ukraine in February 2022, sanctions swiftly followed, including a total ban on Russian timber imports into the European Union (EU) from July 2022. Belgium, one of the staunched supports of the EU ban, has become a profitable destination for Russian wood. Using a forensic laboratory at the Royal Museum for Central Africa in Tervuren, inspectors determined that several wood shipments from Russia had arrived in Belgium. The number of fines imposed for illegal harvests almost tripled in 2023.
“But an impediment is a distinct lack of inspectors,” Wynant said. “There are now fewer than five timber inspectors working full-time in Belgium, but there are 4500 timber importers,”according to the article .
The Ukrainian Embassy Malaysia reported on the ecological damage to Ukrainian forests. One-third of the countries forests are damaged, and illegal logging is rampant in national parks and reserves in areas occupied by Russian forces.
The United States and Australia have some of the softest compliance actions against Russian wood in the Western World, with the Biden administration opting not to follow the UK, EU and more than 130 global ENGOs in introducing a sanction on all timber imports after the Ukrainian Parliament asked all “friendly countries to sanction Russian timber.
It includes FSC and PEFC – the world’s largest private forest certification labels – which cancelled Russian and Belarussian certificates.
Since March 2022, more than US $1.98 billion worth of timber has been imported from Russia.
Timber trade from Belarus has increased six times since the start of the Ukraine conflict amid fears that Azerbaijan is being used to bypass sanctions. Since early 2022, western sanctions on Russian and Belarussian trade have limited the export of pulp, paper and softwood to nine countries – China, Kazakhstan, Belarus, Uzbekistan, Iran, Kyrgyzstan and the United Arab Emirates and Azerbaijan
Russia and Belarus are ramping up timber exports to Uzbekistan amid fears the former soviet state could act as a new trading post for conflict timber entering global timber supply chains.
It comes as Uzbekistan is spending billions on new rail, road and sea infrastructure, funded by China’s Belt and Road Initiative, forging new pathways for timber to infiltrate global supply chains.
Already, Uzbekistan is Russia’s second-largest importer of softwoods, with 480,000 cubic metres of timber (or 11% of its total imports) imported into the country every quarter – in what is a significant escalation in trade since the start of the Russian invasion of Ukraine.
It comes as Wood Central reported in July that a block of ten countries – including Uzbekistan as well as China, Kazakhstan, Belarus, Iran, Kyrgyzstan, the United Arab Emirates, Azerbaijan, and Tajikistan – is fueling a booming trade of conflict timber bypassing western sanctions.
Vanuatu forest authorities last week banned Vanuatu Forest Industry Ltd (VFIL) from exporting logs while they investigate landowners’ complaints that trees were cleared without permission on the island of Santo. The export of round logs is banned in Vanuatu, although a government inquiry in 2021 found endangered rosewood being illegally exported to China, where it is prized for furniture.
Since Russia invaded Ukraine, the country’s relationship with China took on even greater significance. More than 83% of Russia’s timber export goes through Chinese supply chains, with China now Russia’s distribution point to global forest markets.
Chinese shipping companies like the Shandong Port Group play a crucial role in Russia realising its Arctic transport aspirations. The company includes four major seaports in the Chinese Shandong region and are looking for more.
Komi Governor Vladimir Uiba – who has strong ties to the failed Wagner group – is pushing to attract Chinese investment in forest processing. Komi is Russia’s second-largest state and is home to the Virgin Komi Forests – a UNESCO World Heritage Site and the largest virgin forest in Europe.
The European Commission is investigating potential illegal imports of Russian birch plywood products into the European Union. CELEX:32023R1649:EN:TXT.pdf (europa.eu) There has been a significant increase in imports of Russian birch plywood into Turkey and possibly Kazakhstan, and an increase in exports of birch plywood from both countries to the EU—although neither has been a significant producer of birch plywood in the past. The EU banned Russian wood after Russia invaded Ukraine.
ICIJ partners in Europe revealed the indirect trade routes used to mask the origins of Russian timber, which continues to flow into the EU despite being banned.
Paper Trail Media, Der Spiegel, ZDF and others analyzed trade data to trace the pathway of banned wood through third countries, including China, Turkey, Kazakhstan and Kyrgyzstan.
Russian mercenaries with close ties to President Vladimir Putin and a logging contractor exposed for funding African rebels help feed a barely-regulated European timber rush in one of the world’s poorest and most fragile countries, according to a new report by Earthsight.
New evidence shows that an obscure company reportedly controlled by the Russian Wagner paramilitary group supplied timber to European consumers. The trade embroils a firm listed on London’s AIM stock exchange that was part of a national delegation at the COP26 UN climate summit in Glasgow.
Before Russia’s invasion of Ukraine in February 2022, about 80% of all birch plywood globally was produced in Russia, Belarus and Ukraine.
After the fifth package of sanctions imposed on Russia by the EU finally entered into force in July 2022, the import of roundwood and wood products, including birch plywood, from Russia to the EU was banned. However, according to information and statistics obtained from the market, it seems that illegal Russian birch plywood continues to be imported to Europe from third countries.
This is reflected in increased imports of birch plywood from countries such as Kazakhstan and Turkey. Considering the production capacity of Kazakhstan, we can see that the country does not have sufficient birch plywood production to be able to deliver the volumes recorded in the statistics.
Illegal birch plywood travels to the European markets in many ways. The import ban is evaded by transit through a third country, for example. The third countries may also make minor changes to the plywood, after which the country where the changes were made is reported as the products’ country of origin. Another way is to use a false tariff heading so that the product is excluded from sanctions.
Russia has been accused of engaging in industrial-scale logging in Ukraine, cutting down large swaths of trees for sale and to strengthen its defensive positions. In a letter to President Putin, Russian Defense Minister Shoigu requested permission to harvest timber and stated that “wood not used for defense will be sold to finance the military operation.”
The EU first imposed trade sanctions on Belarus timber products on 2 March 2022. These were extended to Russian timber products on 8 April 2022. On 10 March 2022, Russia’s Industry and Trade Ministry announced a ban on all wood and timber-related exports to “unfriendly countries”, including the EU, UK and US. Both leading certification organisations, the PEFC and FSC, announced in March 2022 that all timber originating from Russia and Belarus would be categorised as ‘conflict timber’ (i.e. from a controversial source) and not eligible to be sold and promoted as PEFC- or FSC-certified. This had a significant impact on many European companies which had become heavily dependent on Russia and Belarus for their supplies of certified wood.
The EU first imposed trade sanctions on Belarus timber products on 2 March 2022. These were extended to Russian timber products on 8 April 2022. On 10 March 2022, Russia’s Industry and Trade Ministry announced a ban on all wood and timber-related exports to “unfriendly countries”, including the EU, UK and US. Both leading certification organisations, the PEFC and FSC, announced in March 2022 that all timber originating from Russia and Belarus would be categorised as ‘conflict timber’ (i.e. from a controversial source) and not eligible to be sold and promoted as PEFC- or FSC-certified. This had a significant impact on many European companies which had become heavily dependent on Russia and Belarus for their supplies of certified wood.
EU27 import value of wood and wood furniture from China increased only 4% to US$6.0 billion in 2022, although this did build on a massive 42% gain the previous year. Import value from Ukraine also increased by 9% to US$1.9 billion in 2022, despite the serious disruption due to the war, following a 55% gain the previous year. Other significant beneficiaries were Turkey, for which EU27 import value increased 32% to US$890 million last year, and non-tropical products from Brazil which recorded a 54% increase to US$ 690 million in 2022
On the anniversary of Russia’s invasion of Ukraine last week, G7 countries announced new sanctions on Russia and Belarus.
This new Earthsight article shows that since the conflict began, the USA, Canada, Japan, the EU and the UK have imported timber and wood products worth over $2.9 billion from Russia and Belarus.
Though the EU and UK have sanctions in place on most wood products, they omit some key products. Meanwhile Japan, the US and Canada have not put into place any ban on wood products from Russia and Belarus.
Earthsight’s latest report revealed that over $1.2 billion of Russian plywood has been sold in the US since the conflict began, with profits funneling directly to Putin’s allies, and possibly helping to fund Russia’s military.
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The article is a useful summary of the existing sanctions put into place on Russian and Belarus timber products.
Not long after imposing sanctions on wood imports from Russia and Belarus, Europe saw an influx of wood supposedly coming from Kazakhstan and Kyrgyzstan. Authorities say sanctions-busters are increasingly mislabeling wood as Central Asian so they can keep bringing it in to the EU.
Key findings:
Traders are evading European Union sanctions on Russian and Belarussian wood by declaring that it really comes from Central Asia.
Customs in Lithuania and Latvia are scrambling to keep up with the sudden influx of timber with suspect paperwork from Kazakhstan or Kyrgyzstan.
Reporters found several Kyrgyz and Belarusian companies that offered false paperwork so traders could ship banned Belarusian wood to the EU.
HO CHI MINH CITY, Vietnam — Russian birch wood has continued to flow to American consumers, disguised as Asian products, despite U.S. economic sanctions imposed on Russia over its invasion of Ukraine, a new report says.
A recent report by European Investigative Collaborations (EIC), a transnational investigative journalism project, claims that the Wagner Group, a Russian paramilitary group with close links to the regime of Vladimir Putin and active in the Ukraine war, is engaged in the forestry business in the Central African Republic (CAR).
The report Bois Rouge was conducted in collaboration with All Eyes on Wagner, an open-source investigative project by French NGO OpenFacto that tracks Wagner’s global influence.
Wagner, which is reputed to be run by Yevgeny Prigozhin, a Russian oligarch and close confidante of Russian President Vladimir Putin, has long been reported to offer private security services to African partners – among them the CAR, Mali, and Sudan – in return for exclusive rights to gold and diamond mining in strategic areas.
However, All Eyes on Wagner says that Wagner’s interests also extend to the forestry trade in the CAR.
Timber Trade Federation (TTF) issued import warning for TTF-members on birch plywood from the Far East.
“It has been nearly six months since Russia’s awful invasion of Ukraine, with few signs the conflict is going to abate anytime soon.
Though grain exports began to leave Ukraine this week for the first time since the war began, international sanctions on Russia remain very much in place.
Along with maritime sanctions and restrictions on Russian payments, the most significant sanction for our industry is the Russian timber import ban.
An investigation reveals evidence linking the Wagner group, a group of Russian mercenaries, with a timber concession in the Central African Republic
Timber chiefs have warned that imports of the material from Russia or Belarus could now be deemed illegal in the UK. The Timber Trade Federation (TTF) told its members that purchases from suppliers in the ostracised nations could fall foul of regulations initially coming into force nine years ago in part to tackle illegal logging abroad.
FSC and PEFC have barred wood and timber from Russia and Belarus from their certified products, as a host of other industry suppliers go public with their stance against Russia’s war in Ukraine.
Deforestation accounts for at least 15% of all greenhouse gas emissions.
Illegal deforestation, done too quickly for forests to regrow naturally, still takes place in Europe, especially in Eastern European countries. Products manufactured from illegally logged wood have made their way on the market in the UK.
Ikea is likely to have sold children’s furniture for years made from wood linked to illegal logging in Russia, where rampant tree-cutting threatens forests crucial for the planet’s climate, according to a new report by a nonprofit environmental group.
Sanctions breakdown as Belarussian timber exports surge 8-fold for the first three months of 2024.
Timber exports from the heavily sanctioned Putin-aligned state have exploded over the past 12 months, with more than 365,000 cubic metres of sawn wood traded into 15 “friendly nations” in the first three months of 2024 alone.
That is according to the government-backed Belarusian Universal Commodity Exchange (BUCE), which reported that Belarus timber production was up eight times over the January to March quarter for 2023, with the total output of Belarussian timber reaching 748,000 cubic metres— including 49% traded into global markets via third-party Eurasian trading ports.
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