Industry organisations are warning of penalties and sanctions after an investigation found that birch plywood is being brought into Europe from Russia.
In 2021 Russia was the European Union’s fifth-largest trading partner, exporting more than 3 billion US dollars’ worth of timber to Europe. The sanctions imposed after Russia’s invasion of Ukraine have hit much of the sector hard. More than three and a half years after sanctions were introduced against imports of Russian and Belarusian wood products, Europe’s leading timber industry organisations have restated their “firm and unwavering commitment” to keeping Russian timber out of European supply chains.
In a joint declaration published by Timber Development UK (TDUK), CEI‑Bois, the European Confederation of Woodworking Industries, the European Timber Trade Federation (ETTF) and the European Organisation of the Sawmill Industry (EOS) stressed that “the sanctions introduced by the European Union and the United Kingdom prohibit the direct or indirect purchase, import or transfer of Russian or Belarusian timber, and all companies must comply strictly with these rules”.
Timber industry restates its commitment to fighting illegal imports
The main timber industry and timber trade organisations of the EU and the United Kingdom have issued a statement restating their “unwavering commitment” to combating imports of Russian and Belarusian wood products. The statement says:
“More than three and a half years after the EU and the United Kingdom introduced sanctions against imports of wood products from Russia and Belarus, the signatories to this letter – CEI-Bois (the European Confederation of Woodworking Industries), the ETTF (the European Timber Trade Federation), the EOS (the European Organisation of the Sawmill Industry) and TDUK (Timber Development UK) – restate the firm and unwavering commitment of the EU and British woodworking industry and timber traders to observing the applicable legislation governing imports of wood products from Russia or Belarus.
The EU and UK sanctions prohibit the direct or indirect purchase, import or transfer of Russian or Belarusian timber, and all companies must comply strictly with these rules. Sanctions on wood from Russia and Belarus were introduced several years ago, yet unfortunately residual volumes of prohibited timber are still circulating in Europe.
The EU and UK timber industry firmly condemns this and wishes to emphasise that companies are legally liable for breaches of sanctions, whether committed deliberately or through negligence. They cannot escape liability by failing to exercise proper due diligence. In addition to reputational damage, EU and UK companies that breach sanctions risk administrative and criminal penalties. We call on national and European authorities to monitor compliance with sanctions continuously and to punish breaches accordingly.
Our message is clear: the EU and UK timber sector value chain is united in its determination not to import Russian and Belarusian wood. Integrity is a core value of our industry, and we reject illegal and unethical conduct by any company.”
The federations acknowledged that, despite the prohibitions, “unfortunately, volumes of prohibited timber are still circulating in Europe”, before condemning the practice. “Companies are legally liable for breaches of sanctions, whether committed deliberately or through negligence,” the statement warned.
“Liability cannot be avoided by failing to exercise proper due diligence. In addition to reputational damage, EU and UK companies that breach sanctions risk administrative and criminal penalties,” they said, before calling on national and European authorities to “monitor compliance with sanctions continuously and punish breaches accordingly”.
“Our message is clear,” the statement concluded. “The EU and UK timber industry value chain is united in its determination not to import Russian and Belarusian timber. Integrity is a core value of our industry, and we reject illegal and unethical conduct by any company.”
For example, the plywood manufacturing empire of the Russian businessman and billionaire Aleksey Mordashov is built mainly around the Russian company he owns, Sveza Group, one of the world’s largest producers of birch plywood. Historically Sveza exported enormous volumes to Europe and North America; sanctions have cut off those export flows. Investigations indicate that plywood produced at these mills has been sold in the EU, the United States and other markets – often through intermediaries or by rerouting shipments via third countries.
7.5% of the timber used in UK housebuilding comes from Russia
The European timber industry’s pledge comes amid mounting evidence that Russian timber continues to enter British and European supply chains under falsified paperwork. As much as 7.5% of the timber used in British housebuilding may have been imported illegally from Russia. That estimate is consistent with findings by the Australian organisation Source Certain, which combined logistics data with wood DNA analysis to trace consignments labelled as Estonian, Latvian or Lithuanian that were in fact of Russian origin. According to Source Certain, every region leaves its own isotopic fingerprint in wood, a “unique barcode” reflecting where it came from. Investigators warn that the black market undermines sanctions designed to deny Russia funding for its war in Ukraine. Because Russia’s forests are state-owned, smuggling revenues are believed to feed directly into the war effort.
Earlier this year Earthsight warned that “roughly one fifth of the birch plywood currently on sale in Europe is thought to be illegal Russian ‘blood timber’”. Earthsight reported that around 1.5 billion pounds sterling worth of Russian wood products have been brought into Europe since the sanctions took effect, some of it already used in British housebuilding. This fraud is hard to detect even for large importers, given that some companies may be complicit while others are unaware of such schemes. (https://www.zemeunvalsts.lv/finieris-no-krievijas-berza-joprojam-tiek-ievests-eiropa)
Greensphere Capital’s managing partner, who supports the Source Certain research, warned that the problem affects the whole construction sector and puts British forestry businesses at a disadvantage, since sustainability rules leave them facing higher compliance costs. “If you are a forester in Wales, you simply cannot compete with the prices of some imported products, because you are doing everything by the rules while your competitors who import products are not playing by the rules.” This is a very large problem, and it has spread to the world’s forest certification systems as well.