Despite sanctions, US companies continue to import teak from Myanmar, report says

  • According to a new report, US logging companies circumvented sanctions to import nearly 1,600 tonnes of teak from Myanmar last year.
  • Advocacy group Justice for Myanmar said in its report that companies were buying timber from private companies acting as brokers in Myanmar, instead of directly from the state-owned Myanma Timber Enterprise, which is subject to sanctions. American.
  • With MTE under military control, Myanmar’s timber auctions have become more opaque, making it difficult to take action against companies that circumvent sanctions.

US logging companies imported nearly 1,600 tonnes of teak from Myanmar last year, bypassing sanctions and funneling millions of dollars in revenue to the country’s junta, according to a new report.

As violent crackdowns rocked Myanmar in the wake of its February 2021 coup, the United States imposed sanctions on the military-controlled Myanma Timber Enterprise (MTE) in April. The state-owned enterprise, which regulates all Myanmar timber harvests and sales, including exports to international markets where it takes a percentage of the revenue, is one of the “key economic resources of the repressive Burmese military regime. violent demonstrations in favor of democracy. “, said officials at the time.

Sanctions against MTE make it illegal for US companies to import timber from Myanmar. Yet the new report, released by advocacy group Justice for Myanmar, counted 82 shipments of timber from Myanmar to the United States between February and November 2021, “in line” with previous years.

“The evidence shows that the sanctions have not stopped the flow of teak to the United States, and therefore have not stopped the flow of timber trade funds to the illegal military junta,” said the report, which relied on world trade shipping records. Panjiva database.

Despite the sanctions, there were 82 shipments of timber from Myanmar to the United States between February and November 2021, consistent with previous years. Image courtesy of Justice for Myanmar.
A Myanmar Timber Enterprise log depot in the Sagaing division holds timber stocks. Photo courtesy of the Environmental Investigation Agency

The shipments, made up largely of Burmese teak (Tectona grandis) boards and samples used for shipbuilding, outdoor decks and furniture amounted to 1,565 tonnes of teak. By far the largest importer was East Teak Fine Hardwoods (ETFH), which accounted for half of imports, according to the report. South Carolina-based ETFH, specializing in hardwood decking, imported 765 metric tonnes of teak planks and made 44 shipments during the 10-month period, according to the report. ETFH did not immediately respond to a request for comment.

To circumvent the sanctions, US companies bought timber from private companies acting as brokers in Myanmar instead of directly from MTE, the report added. Once these brokers win bids at MTE auctions, they export their lumber to the United States either directly or through intermediary countries like China.

“Although the data analyzed for this feature only captured teak exports directly from Myanmar to the United States, it is likely that even more teak will be exported to the United States via third countries such as the United States. China, “the researchers wrote.

Burmese teak has long been prized by yacht builders for its high silicon and resin content, which makes it more durable in humid environments. As the wealthy seek to get away from their pandemic worries, the superyacht industry has boomed in recent years, increasing demand for tropical hardwood.

A sailboat with teak deck. Image by larsen9236 via Pixabay.

In the United States, the international timber trade is regulated by the Lacey Act, which requires companies to ensure that the timber they purchase, including from foreign sources, has been legally harvested. The law, aimed at curbing illegal logging, does not prohibit funding for illegitimate military leaders, but requires transparency in the supply chain and disclosures which, if properly enforced, should prevent companies from importing fuel. Myanmar timber, the researchers said.

“In Myanmar, all legally harvested timber for export goes through MTE. Thus, compliance with the Lacey Act should – even inadvertently – lead companies to the MTE. And that should lead to the conclusion that the lumber should not be legally imported into the United States due to the current sanctions against MTE, ”they wrote.

With MTE now under military control, timber auctions have become more opaque, making it difficult to take action against companies that circumvent sanctions, the report adds. Prior to the coup, MTE used to announce details of upcoming timber auctions and disclose auction results; now that information is no longer publicly available, he said.

According to the Extractive Industries Transparency Initiative, a global watchdog, Myanmar collected nearly $ 100 million in revenue from taxes and fees on the timber trade in fiscal year 2017-18.

Since the coup, the military has killed more than 1,400 civilians and jailed 11,000 others, according to the report.

“Companies that aid the Burmese military and do business with the entities it controls are complicit in crimes committed by the Burmese military,” the researchers said.

Banner image of fresh teak logs in Nongdao, Myanmar. Image courtesy of EIA.

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