Estonian plywood manufacturers stress that timber legalised in Kazakhstan, Turkey and China is cutting honest firms' revenues by as much as 30%, and customs authorities are urging Brussels to introduce far stricter controls.
At the start of the year, an investigation by the organisation Earthsight revealed that, since sanctions came into force in July 2022, more than 1.5 billion euros' worth of Russian birch plywood has been imported into the European Union. That amounts to roughly 500,000 cubic metres, with Lithuania considered one of the main suppliers of this plywood.
Sanctioned timber from Russia and Belarus is being "hidden" behind documents showing a false country of origin, and continues to flow into world timber markets in enormous volumes. The ones who effectively pay for this are the honest timber producers who comply with every existing law, regulation and sanction. As is well known, under the rules in force in the European Union since mid-2022, when the full-scale invasion of Ukraine began, timber imports from Russia and Belarus are banned. The Earthsight investigation uncovered large-scale, highly organised illegal trading networks that "rebrand" sanctioned timber as products from friendly countries, including Kazakhstan, Turkey and China.
The Estonian company Puidukoda exports timber to around 30 countries. Its manager, Eveli Opmann, told TVP World that during a visit to a timber supplier she was offered a product that had obviously been made in Russia: "I don't want to name the country, but it happened like this: you go to the warehouse, [they] tell you this is a very good and very cheap product. I take a look and, although I'm not a great expert, I can recognise timber of Russian origin. If I'm told it's from Turkey, everything becomes clear." Opmann noted that the timber is usually offered at prices 20-30% below the market rate, creating competition problems for other businesses. The head of Puidukoda concludes: "Who does this affect? The Russians lower their prices, the customer asks me: 'What can you do about your prices?' There's nothing I can do!"
The scale of the problem has been noticed
Laboratory studies published last year found that almost half of the birch timber samples in the United Kingdom and the United States were incorrectly labelled, giving well-founded grounds to suspect that the timber in fact came from Russia or Belarus.
The Earthsight investigation calculated that 1.5 billion euros' worth of sanctioned birch plywood has been imported into the European Union since sanctions came into force. According to Earthsight data, Poland was identified as one of the largest buyers of suspect (illegal) birch plywood between July 2022 and October 2024; next on the list, in terms of volumes purchased, come Spain, Portugal, Italy, Germany and Estonia.
Manufacturers have noticed the scale of the problem. During a visit to Estonia, representatives told TVP World that, despite considerable efforts by the Estonian authorities to stamp out the problem, sanctioned timber is still reaching the European market. The ban applies to timber and timber products exported from Russia and Belarus. But if sanctioned timber is processed and transformed in some third country, that country "becomes" the official place of origin of the timber, which in turn allows it to be brought into the European Union and British markets.
Jaak Nigul, board member of the Estonian furniture manufacturer Tarmeko Group and director of the Estonian Forest and Wood Industries Association (EFWIA), assesses the situation: "The so-called banned imports from Russia are of course continuing via Kazakhstan, Turkey and China," citing a specific example of the price differences. "A few days ago we sent a quote to a packaging manufacturer that makes plywood boxes. We were told that in Europe plywood costs at least 800 euros, but they had bought it from Kazakhstan for 550 euros." EFWIA works closely with the Estonian customs authorities to eradicate such practices. Nigul believes that the volume of timber brought into the Baltic state, which has a land border with Russia, is "much smaller than before", although "it is hard to prevent".
The shift away from Russian and Belarusian supplies over the past four years has substantially changed the timber trade across much of Europe. Puidukoda has two factories in Estonia; it previously bought half of its timber from Russia, but was forced to switch rapidly to Nordic suppliers. "We completed the transition within six months. It was quite a difficult period - we had to change most of our suppliers," says Opmann, who believes that Estonia and the Baltic region as a whole are currently "fairly clean of Russian timber", even though market prices are still affected by wood products legalised elsewhere. Puidukoda has previously sent wood samples for independent laboratory testing to confirm the reliability of its supply chain. Opmann judges that traders in countries geographically far from Russia seem "more willing" to trade in sanctioned timber than the Baltic states, whose proximity to the war in Ukraine has increased awareness and responsibility. "We are close to the Ukrainians, they are fighting for us too. Buying timber from a country that wants to conquer them is not ethical, and our customers wouldn't accept it either," stresses the head of Puidukoda.
Prove it or don't export!
Through 2024 and into 2025, the Estonian Tax and Customs Board (ETCB) stepped up controls on plywood imports from Kazakhstan and China, which immediately led to a considerable drop in volumes. The Board reports that in August last year it opened more than 100 inspection cases into origin fraud in connection with timber imports from Kazakhstan, finding in many instances that the processing carried out there was not sufficient to confer Kazakh origin on the wood product in question. "We are aware that the risk of circumvention schemes remains high," the head of the ETCB's Customs Compliance Division, V. Rauam, told TVP World, noting that the agency has asked the European Commission to consider introducing a new clause that would require timber exporters to prove that the raw materials are not of Russian origin. These requirements should form part of a future sanctions package.
Recent reports indicate that the Polish authorities have also been pressing for a similar decision at European Union level, which suggests growing pressure for more coordinated action across the EU. For honest manufacturers such as Estonia's Puidukoda and Tarmeko, the view is clear: the sanctions regime is effective, but without far stricter checks at the European Union's external borders, illegally imported timber will continue to threaten the competitiveness of honest European businesses, reduce their profits and strengthen the economies of aggressor states.