Forested hills in Myanmar

Myanmar under the junta – why do sanctions matter and why are the EU and UK dragging their feet?

The US Department of the Treasury announced on Wednesday it had issued sanctions against key commercial interests in Myanmar in response to the military’s increasingly bloody coup.

The key target was the Myanmar Timber Enterprise (MTE), a State entity which regulates timber exports and is a key economic resource for the military regime.

For the past decade, EIA has been at the forefront in combating illegal logging and the associated illegal timber trade from Myanmar to international markets; teak is especially sought-after for use as high-end yacht decking and furniture.

Trucks carrying stolen timber, Myanmar (c) EIA

Our exposés of the methods, key players and criminal syndicates profiting from Myanmar’s forests have been used in major and disruptive enforcement actions from China and the EU.

Recently, our report The Croatian Connection Exposed revealed the backdoor trade in teak through Croatia; the Dutch authorities are now prosecuting some of those we investigated. And just days ago we revealed how the military is still shipping lorryloads of timber across Myanmar’s land border with China

The MTE has been at the heart of many of the problems with the timber trade in Myanmar, including being responsible for the devastating overlogging of forests in the previous military regime, subcontracting logging rights in shady deals with private companies and lacking transparency in the use of its revenues, much of which ended up in a mysterious “other account” separate from its declared income.

Under the EU Timber Regulation (EUTR), Member States have acted against unscrupulous traders and middle-men out to make a quick buck by circumventing the law and have adopted the common position across the bloc that Myanmar is unable to comply with the EUTR under current conditions.

However, some traders have still been importing Myanmar teak to the EU, with EIA exposing many of these in recent months.

And that was before the coup of 1 February – so why are the EU and UK dragging their feet in when it comes to sanctions against a well-known corrupt state operation which is supporting the current military regime with much-needed hard currency?

Myanmar teak seized in the Netherlands for being in breach of EU law

As major geopolitical entities, the EU and UK sanctioning the MTE and targeting those individuals who directly profit from Myanmar’s timber and trade would only add weight to the international community’s attempts to choke off the funds enabling more violence and brutality.

It is especially galling when we are seeing companies such as Gold Teak Holding boasting of trading in Myanmar teak while the junta is murdering people on the streets for participating in the civil disobedience movement to stop the coup.

And it is no exaggeration to state that Myanmar is teetering on the precipice of a major humanitarian crisis which has been put in motion by General Min Aung Hlaing and his military, leaving the abused citizens to face even more hardship. According to the UN, up to 3.4 million more people in Myanmar will struggle to afford food in the next few months. It is also estimated that there are now more than 250,000 displaced people as a direct result of the military and its brutal response to the Civil Disobedience Movement.

While sanctioning the MTE is no magical ‘silver bullet’ solution to Myanmar’s crisis, it is nevertheless a valid and important step to minimise profits from the country’s plundered natural resources.

Civil servants from both the Forest Department and the MTE are on strike and so face losing their homes and livelihoods, security not just for them but for their families too.

Log yard in Myanmar (c) EIA

Log yard in Myanmar (c) EIA

Make no mistake, sanctioning the timber sector will not add to the misery of the Burmese and ethnic nationalities – those who profit are the regime, unscrupulous certifiers paid to verify legal timber, middle-men and brokers.

With sanctions in place, enforcement is able to act with clarity and banks will be able to check the flow of US dollars and take meaningful action against those who continue to seek opportunities to exploit some of the world’s last remaining teak and hardwoods.

Working closely on the ground with partners and civil society in Myanmar during the past decade, we have seen communities take huge risks to monitor and safeguard their forests.

The very least the EU and UK can do is sanction a corrupt enterprise enabling the regime – and the time to do it right now.