Dodging taxes and funding the military – the truth about Myanmar’s tainted timber
LONDON: With grave concern that the profits from Myanmar timber exports are going into the pockets of the military junta responsible for the country’s ongoing violent coup, new analysis has now identified a pattern of timber tax evasion by exporting companies.
It is currently impossible to import timber from Myanmar into the European Union without contravening the EU Timber Regulation (EUTR), which requires due diligence to trace imported timber back to the very point of felling – a requirement that cannot be met due to the opaque nature of Myanmar’s forestry sector.
In its new briefing Taxing Questions, the London-based Environmental Investigation Agency (EIA) argues that the identified pattern of tax evasion puts Myanmar timber – including high-value species such as teak, used in the luxury yacht sector – even further beyond legitimacy under the EUTR.
EIA believes this systemic tax evasion has likely deprived the previous Government of Myanmar, overthrown by the coup of 1 February this year, of millions of dollars in tax revenue.
Faith Doherty, EIA Forests Campaign Leader, said: “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.”
The tax evasion concerns shipments of timber arriving in Croatia, as revealed by EIA in its 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 in a more processed state 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.
There is evidence suggesting similar tax evasion violations may have occurred for timber supplied in the renovation the prestigious Gorch Fock tall ship of the German Navy, a refit which eventually cost €135 million.
To date, EIA has identified four companies in the EU which have received this illegally harvested timber and benefitted from having paid reduced prices for it – ABC in Slovenia, HF Italy in Italy, Houthandel Boogaerdt in the Netherlands and WOB Timber in Germany.
All timber exported from Myanmar goes through the State-run Myanmar Timber Enterprise (MTE) – and the military is now in control of all its revenues.
EIA is publishing Taxing Questions as part of a new online Myanmar timber resource, which presents details of tax evasion and the EUTR as well as new information about the connections between timber and the Myanmar military. The page will be regularly updated with new information and analysis from EIA campaigners.
CONTACTS FOR MEDIA
- Faith Doherty, EIA Forests Campaign Leader, via faithdoherty[at]eia-international.org
- Paul Newman, EIA Senior Press & Communications Officer, via press[at]eia-international.org
- The Environmental Investigation Agency (EIA) investigates and campaigns against environmental crime and abuses. Our undercover investigations expose transnational wildlife crime, with a focus on elephants, pangolins and tigers, and forest crimes such as illegal logging and deforestation for cash crops such as palm oil; we work to safeguard global marine ecosystems by tackling plastic pollution, exposing illegal fishing and seeking an end to all whaling; and we address the threat of global warming by campaigning to curtail powerful refrigerant greenhouse gases and exposing related criminal trade.
- Read and download Taxing Questions at https://eia-international.org/wp-content/uploads/2021-Taxing-Questions-spreads.pdf
- Visit EIA’s Myanmar timber information page at https://eia-international.org/myanmars-tainted-timber-and-the-military-coup/
Environmental Investigation Agency
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Tel: +44 (0) 20 7354 7960