On 1 February, the Myanmar military (also known as the Tatmadaw) overthrew the Government of the country and arrested its leadership, events which radically altered the context for addressing the problem of illegal timber sourced from the country.
The military now has control of the Government, including the profits from the Myanmar Timber Enterprise (MTE), the State-owned body from which exporting companies must buy teak.
Today, EIA’s publishes its latest findings related to tainted timber exported from Myanmar to the European Union.
- timber shipments from a company called Myanmar Rice Trading, part of a conglomerate called the International Group of Entrepeneurs (IGE). IGE has been identified as providing financial donations to the military which are being used, according to the UN Human Rights Council, to support military operations in Rakhine against the Rohingya;
- shipments exported from Ahlone Port, which is owned by Myanmar Economic Corporation (MEC), in turn owned and run by the military;
- other timber shipments use another port, Asia World Port Terminal, which is owned by the Asia World Conglomerate. The US Government has accused the Managing Director of this conglomerate of laundering money for the military, while the company has also made financial donations to the military and has been linked to clearing of land owned by Rohingya communities in Rakhine.
EIA is further aware of several additional ways by which the military may now be profiting from the timber trade.
As the military is now in control of the revenues of the MTE, timber obtained through formal mechanisms in Myanmar is purchased at significant risk of financing the military.
This is further compounded by the MTE’s stake in the Forest Products Joint Venture Company, which can direct further profits to the military.
The military has had significant involvement in seizures of illegal timber during the past few years but reports do not indicate where illegal timber goes when it is seized nor who profits from it.
Prior to the 1 February coup, EIA had also prepared an analysis showing evidence of tax evasion in timber exports to the EU between 2017-19, featured in the new briefing Taxing Questions – Evidence of tax evasion in teak exports from Myanmar.
This tax evasion would render the timber illegal for the purposes of the EU Timber Regulation (EUTR) and mean that the Croatian company Viator Pula, the importer of the timber into Europe, has violated the ban on illegal timber imports into the EU.
This timber has been further received and traded by various companies in Belgium, Germany, Italy, the Netherlands and Slovenia.
The tax evasion concerns the shipments of timber arriving in Croatia, as revealed by EIA in our 2020 report The Croatian Connection Exposed. EIA has found significant differences in how the timber was declared when exported from Myanmar compared to when it was imported into Croatia.
These differences include the product descriptions for the timber, which attempt to say it was more processed when it left Myanmar than when it arrived in Croatia, and in some instances the value and weight of the timber.
Misdeclaring the timber on export from Myanmar appears to have resulted in significant underpayment of customs taxes applied to timber exports from Myanmar.
EIA has further analysed general customs information about shipments of timber exported from Myanmar which indicates there is a pattern of tax evasion, which may have deprived the previous Government of Myanmar of millions of dollars in tax revenue.
The recent events in Myanmar, and the likelihood of the military’s abuses being funded by the timber sector, make it imperative that the EU takes action on the findings of this briefing and that all governments target the military junta and its entities profiting from the sale of timber from Myanmar.
We are publishing this information as part of a new Myanmar timber online resource, which presents information about tax evasion and the EUTR as well as new information about the connections between timber and the Myanmar military.
This page will be regularly updated with new information and analysis from EIA campaigners.