Despite sanctions put in place against the brutal military junta in Myanmar, US traders continue to source precious teak from the country for luxury yachts and flooring.
The allegations are made in the new EIA report Acts of Defiance – How US traders are ignoring sanctions to import conflict teak from Myanmar, released today (1 December).
Full details of the companies accused are being provided to the US Department of State.
EIA Forests Campaign Leader Faith Doherty said: “After the military seized power in Myanmar in February last year, it sought to ransack the country’s natural resources in a desperate grab for hard currency to keep itself afloat.
“Sanctions put in place by the US – and others around the world – are meant to halt the flow of conflict resources such as teak, but we’ve identified several major traders who continue their lucrative teak imports – so far, with impunity.”
Teak imports into the US are strictly prohibited under formal sanctions and also under the US Lacey Act, which bans imports of goods in violation of any law of the US or of any foreign law protecting or regulating plant species.
However, EIA investigators have found that many of the US timber importers have been seeking to get around the law by using the ‘stockpile narrative’, a sleight-of-hand in which they claim their teak was purchased from Myanmar stockpiles and paid for before sanctions were imposed in April 2021.
Teak traders have continued to use this false narrative as a means to circumvent sanctions by effectively stating that no funds were transferred to the State-owned Myanmar Timber Enterprise (MTE) after that date.
Our research reveals an alarming number of teak shipments into the US since the coup – and the numbers continue to rise.
Between 1 February 2021 and 10 November 2022, a total of 2,561 tonnes of teak were imported directly from Myanmar into the US. In October 2022 alone, 263 tonnes of teak were imported into the US via 14 shipments.
Doherty added: “Essentially, what the importers are claiming is that they’ve already paid for the teak before sanctions were put in place and have then, for some inexplicable reason, waited more than 18 months in some cases for the timber shipments to actually arrive. It’s simply not credible.
“What this tactic is ultimately achieving, apart from providing the traders with highly lucrative shipments of Burmese teak, is to directly help the junta to maintain its illegal regime and continue to crush dissent in the country.”
Acts of Defiance recommends the US Government to use a number of measures to clamp down on these rogue teak imports.
It further urges the swift implementation of enhanced due diligence checks by financial institutions for all transactions linked with Myanmar, as recommended by the Financial Action Task Force – an inter-governmental body that sets global standards for curbing money laundering and terrorist financing – in its recent blacklisting of Myanmar, effectively cutting the country off from the global financial system.
Finally, the report calls on the Singapore Government to rigorously investigate any flow of funds to and from Myanmar, given the reliance on Singapore’s banking system to facilitate transactions for the trade in teak.