Traders are paying to ship illicit Myanmar teak into Europe via the back door.
The move skirts EU import rules to let them get their hands on the valuable timber for high-paying clients to use for luxury products in the marine sector, such as superyacht decking.
The scheme is revealed in documents obtained by EIA through a Freedom of Information request to Croatia’s Ministry of Agriculture and in a new report released today, The Croatian Connection Exposed: Importing illicit Myanmar teak through Europe’s back door, we name the European firms involved.
Invoices put the total value at nearly $1 million, although when supplied to the yacht-building industry the value would likely be substantially higher.
One shipment, from 2017, did not specify a final destination; the other nine went to companies in other parts of the EU: ABC Net (Slovenia), Crown Holdings (Belgium), HF Italy (Italy), Houthandel Boogaerdt (the Netherlands), Vandecasteele Houtimport (Belgium) and WOB Timber (Germany).
Three of them – Crown, Boogaerdt and Vandecasteele – have previously been found trading Myanmar teak which did not comply with the European Union Timber Regulation (EUTR), a mechanism intended to lock illegal timber out of EU markets.
At the centre of the scheme is the Croatian company Viator Pula and its sole director and shareholder, a man named Igor Popovič.
Both maintain a low profile and are being used by timber importers as a focal point to circumvent the EUTR, which requires rigorous due diligence to trace the legitimacy of timber back to the place it was cut.
However, only the “first placer” of timber on the EU market, known as the ‘operator’, – in this case the importer Viator Pula – is responsible for supplying all the legal documentation, the chain of custody covering the initial felling of a tree to the importation of the timber before it can be sold on to other parties who bear no responsibility for its origins.
There has not been a single instance to date where Myanmar teak was imported into the EU without breaching the EUTR because the opaque nature of its origins within Myanmar has been ruled on several occasions to prevent appropriate due diligence from being carried out.
There is now a ‘common position’ among EU authorities that it is not currently possible for timber operators to conduct adequate due diligence for Myanmar teak.
But when EIA investigators posing as potential timber buyers contacted Mr Popovič, he boasted: “… because of EUTR regulations, it is quite [an] advantage of importing through Croatia”.
Alec Dawson, EIA Forests Campaigner, said: “These importers evidently saw Croatia as a weak link and thought to exploit it, with Viator taking all the risks but Croatia hasn’t turned out to be the soft touch some thought it would be.
“Although this inspection by the Ministry of Agriculture is welcome, roughly 1,000 tonnes of Myanmar timber landed in Croatia in 2018 and 2019. This leaves large amounts of potentially illegal imports of timber unaccounted for.”
Faith Doherty, EIA Forests Campaign Leader, added: “To support Myanmar’s efforts to reform its forestry sector, these traders should abide by the laws in place here, in the EU.”