The commerce in banned teak from Myanmar fines a German firm with a effective of USD four million

  • The German company WOB Timber was fined $ 4 million by a Hamburg court for illegally trading teak from Myanmar.
  • Although there is a regulation banning the importation of Myanmar wood into the EU, companies are using legal loopholes to evade it, according to the Environmental Investigation Agency (EIA).
  • According to the EIA, the demand for Myanmar teak contributed to the fact that the Southeast Asian country lost a Belgian forest area between 2001 and 2018

WOB Timber, a timber company based in Hamburg, has been fined $ 4 million by a court for illegally trading Myanmar timber. The April 27 decision was one of the highest financial sanctions for this type of crime in the European Union.

The Hamburg district court found that WOB Timber had escaped EU sanctions by importing 31 different teak shipments from Myanmar worth several million dollars between 2008 and 2011. For many shipments, wood was processed in Taiwan and declared as originating from this country. rather than Myanmar to circumvent the sanctions.

The court sentenced the company’s director, Stephan Bührich, to 21 months’ imprisonment and a fine of $ 243,000. Several attempts have been made to email WOB Timber about this matter but no response has been received.

The court’s decision comes as part of an investigation by the Environmental Investigation Agency (EIA) in connection with the EU Timber Regulation (EUTR), a law introduced in 2013 to combat illegal timber imports into the EU.

The EIA is a London-based organization that investigates and combats environmental crimes and abuse. The undercover investigations uncover cross-border wildlife crime, with a focus on elephants, psoriasis and tigers, as well as forest crimes such as illegal logging and deforestation of crops such as palm oil.

According to the EIA, the EUTR was necessary because a much smaller set of instruments to combat the illegal timber trade was previously available.

One of these instruments was sanctions; Between 2008 and 2011 there were sanctions for timber imports from Myanmar into the EU. The ruling against WOB Timber relates to violations of these sanctions.

According to EIA, Myanmar teak is used in Europe for the luxury yacht market owned by some of the richest people in the world. This demand is helping to destroy Myanmar’s forests at an almost unprecedented rate. According to the EIA, a larger area of ​​forest was lost than Belgium in the period 2001-2018.

Natural Burmese teak on a deck at the London Boat Show. Photo by Sophie Cohen / Mongabay.

“This is having a devastating impact on people’s livelihoods, driving climate change through deforestation and destroying the country’s abundant biodiversity,” the EIA said in a May 2020 report.

“WOB Timber continues to import wood from Myanmar, although there has been a common position among EU authorities for years that according to the EU Timber Regulation it is not possible to import wood from Myanmar into the EU. In fact, it is illegal to import wood from Myanmar to the EU, ”said Alec Dawson, EIA Forest Camp Director, in an email.

The EIA also said, “WOB Timber has recently exploited loopholes to trade in illegal timber.” For example, EIA studies have shown that WOB Timber has started using an intermediary in Croatia to avoid prosecution in Germany.

Through a request for freedom of information, the EIA received documents from the Croatian Ministry of Agriculture showing that a group of European companies, including WOB Timber, paid a Croatian company to land Myanmar teak in Croatia to circumvent the EUTR.

Fresh teak logs in Nongdao, Myanmar. Image courtesy of EIA.

“The information received from the EIA shows that many companies are doing this despite the previous warnings, in other words because they know the law is being broken,” says the EIA.

It adds that exporting companies in Myanmar have evaded taxes by trading timber with WOB Timber, “which would raise further legal problems under the EUTR,” added Dawson.

In an EIA report from March 17th, documents from 10 teak wood deliveries imported to Croatia were examined and the trade data of the wood exports reported from Myanmar to several countries were analyzed. From this, the EIA identified a pattern of apparent tax evasion by companies exporting wood products from Myanmar.

“We believe that private companies that export timber purchased by the state-owned Myanma Timber Enterprise (MTE) have exaggerated the processing of their timber to avoid paying special goods tax (SGT) and paying a reduced duty for Myanmar (MCT ) to avoid in relation to shipping teak boards, ”says the EIA.

The documents examined by the EIA also raise concerns about other illegal activities. The EIA found that four companies in the EU – ABC in Slovenia, HF Italia in Italy, Houthandel Boogaerdt in the Netherlands and WOB Timber in Germany – received this illegally harvested timber and benefited from a reduced price for its timber.

“The court’s conviction is welcome and timing is important,” said Faith Doherty, EIA director of forest campaigns. “Since the military coup on February 1, 2021, we have been calling on the international community to respond by sanctioning the export of Myanmar timber to its markets. Profits from timber exports benefit the military junta and criminal syndicates operating in an even more brutal and chaotic Myanmar. “

The EIA said it has conducted further investigations into other issues related to Myanmar’s wood, particularly since the coup and the brutal military crackdown on demonstrators in that country.

According to the EIA, investigations into illegal timber traders are continuing: “Much of the timber in Myanmar that enters the EU flows through Italy. We recently found a company that trades in Italy and is reporting the trade on social media despite the coup, ”says Dawson.

Mongabay tried to contact BLE, the EUTR’s competent authority in Germany, but received no response.

Banner image: Wood that was cut for charcoal production near Katha in northern Myanmar. Photo by Nathan Siegel for Mongabay.

Forests, governance, illegal timber trade, illegal trade, international trade, rainforests, supply chain, timber, timber laws, timber trade, tropical forests