zemeunvalsts.lv notes

1. The original title* of the article is “It is best to transport through Poland and Latvia. They ask the fewest questions”. Commenting on this, the head of the Latvian Forest Industry Federation, Kristaps Klauss, asks on Twitter :

“Even though €2.4 million against a background of €1.2 billion in imports is a pittance, it is a disgusting drop of tar. It is the same as three hairs in a soup – three is not a lot, but in a soup – it is far too many. However, I do not understand why Latvia is mentioned in the headline if, for example, Lithuania has 4x as many of these abominations.”

2. To understand the essence of the matter, it is necessary to read the full article, delve into the infographics and read K. Klauss's comment.

(...) What is happening in Latvia

Re:Baltica found out at customs that, due to insufficiently clear origin documents, only three shipments have so far been prevented from crossing the Latvian-Russian border. One of them was a transit shipment from Kazakhstan to Poland. Officials noticed that the accompanying documents contained information about a Russian company. A shipment of wood pellets from Kyrgyzstan was refused customs clearance because it was discovered that the true country of origin of the goods was Belarus. The third, meanwhile, was a pellet shipment from Kazakhstan, but customs refused to specify the reasons for its rejection.

The State Forest Service (VMD) also emphasised to Re:Baltica that it is aware that “the problem of illegal timber imports unfortunately exists”. The service claims to have identified a few suspicious cases but views them as “risk imports” rather than the circumvention of sanctions, and is continuing investigations. “Taking into account how many products previously entered Latvia from Russia and Belarus, then one should not be surprised by legal imports from other third countries either,” the institution asserts.

To the question of whether the sudden increase in imports from Kazakhstan and Kyrgyzstan to Latvia is directly related to the circumvention of sanctions, customs replied evasively to Re:Baltica. Such a risk exists, but they are paying increased attention to this product group and, if they discover discrepancies, they do not let them cross the border. However, it must be taken into account that “in general, there is no justification for banning the import of goods from countries that are not subject to sanctions”.
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Explanation from Kristaps Klauss, head of the Latvian Forest Industry Federation

Thanks to Re:Baltica for “raising” the topic (sanctions circumvention). LETA received a more emotional explanation from me; today I have analysed Latvia's imports from “suspicious countries” more seriously. The short conclusion – in most cases, the “holes” are not at the border, but in the regulations.

The difference in numbers from Re:Baltica is most likely explained by the data sources. I used data from the Central Statistical Bureau; the article, it seems, uses Eurostat data. The deviations in them are not significant. My “unobjective” assessment: red – sanctions bypassed; yellow – sanctions not bypassed, but EUTR breached; green – it could be okay.

Sanctions are working. The RU/BY forest sector has declined, bringing with it a sharp drop in prices. Conversely, the energy crisis caused by Russia sharply raised energy resource prices in the European Union, including for firewood. Dishonest traders have a great economic temptation to cheat.

Regarding the yellow. The country of origin is where the product was manufactured, not where the raw material came from. By producing pallets from RU/BY boards or profiling them, the processing country becomes the country of origin. In this case, the EUTR is breached, which mandates tracking the entire timber supply chain and prohibits the use of RU/BY timber.

Regarding doors – it looks like it concerns one shipment, and it is entirely possible that it is some niche product. On the other hand, birch plywood is produced in Kazakhstan. “Really rubbish”, but it is produced. It is just as possible that it is “re-branded” BY plywood. But (!!!!) without inspecting the shipment, nothing can be concluded.

It should be the duty of customs to stop “red” products; they cannot stop “yellow” ones, but they can report them to the EUTR supervisory authority, while “green” ones are either completely legal, or the fraud might come to light due to the sender's stupidity, or through expert examination.

The forest sector condemns cheating and believes that it is not just a simple legal violation, but a criminal act against our own security! It should be noted that it is not Latvian or EU forestry companies that are breaking sanctions, but traders who have fallen for the temptation to exploit the large (even huge) price difference.
Used a Pixabay photograph