BLOOD-STAINED BIRCH
Recommendations for policymakers in the EU
Recommendations for the EU
1. The European Commission must urgently strengthen the enforcement of existing sanctions on Russian and Belarusian timber
a. The Financial Stability directorate (DG FISMA) in the European Commission should convene a birch plywood task force to coordinate enforcement of sanctions on Russian birch ply. The taskforce should include members from the Environment Directorate, the European External Action Service, Europol, the European Anti-Fraud Office and the office of the EU Sanctions Envoy. This taskforce should coordinate information sharing among EU bodies and Member States, coordinate joint actions to enforce sanctions, monitor plywood imports to identify new laundering routes as they emerge, and initiate action against Member States that fail to enforce sanctions laws.
b. The EU Commission should produce guidance for customs authorities and EUTR Competent Authorities recommending measures to detect illegal imports of sanctioned plywood. This guidance should highlight how Certificates of Origin, harvest documents and third-party certification documents are not sufficient proof of legal origin, and direct customs authorities to ask for additional evidence – including where necessary seizing internal documentation or tapping phones. It should also instruct customs authorities to hold all shipments of birch plywood until EUTR checks are completed.
c. The EU Sanctions Envoy and EU External Action Service should strengthen bilateral and multilateral cooperation on sanctions enforcement with third countries, including China, through diplomatic engagement and the provision of increased technical assistance.
2. The Council of the EU should pass stronger sanctions on Russian or Belarusian timber in the next sanctions package.
a. The EU’s next sanctions package should include a broader prohibition on products using Russian or Belarusian wood. The sanctions regulation (Council Regulation (EU) No 833/2014) should specifically prohibit the import or purchase of wood products processed in a third country incorporating wood originating in Russia or Belarus. This approach has already been taken in relation to products using Russian steel.1 This would go further than the current regulation, which is based on ‘country of origin’ and thus does not prohibit imports of wood products made from Russian wood where they have been processed in a third country. Extending sanctions in this way would close the loophole that allows Russian timber to be laundered by processing it in a third country (or pretending to do so). It would also aid enforcement, as stable isotope and trace element technology is increasingly capable of showing where wood is harvested.
b. The EU should also adopt sanctions against individuals and companies involved in laundering birch plywood in third countries, including listing individual company owners named in Earthsight’s report, and others identified through further investigations, as designated persons.2 This should extend to designating companies and individuals in third countries who are closely involved in facilitating sanctions circumvention.
Recommendations for Member States
3. Member states must urgently take steps to investigate violations of the EU’s Russian wood sanctions: In particular, customs and other relevant agencies must:
a. Dedicate sufficient resources to investigating and prosecuting sanctions violations.
b. Target investigations at the birch plywood sector as a whole (customs code 44123310) rather than individual firms, which can re-emerge under different names.
c. Investigate birch plywood imports from all third countries, with China a particular focus given the strong evidence of sanctioned timber being imported using Chinese documents.
d. Require supplementary evidence for all birch ply shipments, beyond certificates of origin, harvest documents and third-party certification documents.
e. Where necessary, use investigative mechanisms such as seizing internal documentation or tapping phones to identify sanctions violations – particularly where identified red flags are present, such as transactions involving shell companies, transit through countries or territories known as ‘circumvention hubs’ or recently established companies.3
4. Member states should implement and enforce new EU rules criminalising sanctions: In May 2024, a new EU Directive to criminalise sanctions violations came into effect. The Directive sets minimum penalties for those found in violation of sanctions and requires more coordination between authorities within and across countries. Member States must urgently transpose this directive into national law, where they have not already done so, and ensure enforcement agencies are equipped to utilise this law to issue criminal penalties for firms found guilty of violating sanctions.
5. Member states should strengthen coordination between customs, sanctions and EU Timber Regulation (EUTR) authorities: EUTR Competent Authorities are authorised to block shipments that are not at ‘negligible risk’ of containing Russian wood and ask firms for documentation showing what due diligence they have conducted on these imports. In 2022, Competent Authorities declared it ‘impossible’ to legally import Russian and Belarusian wood as well as any products containing this wood, irrespective of origin, whether sanctioned or not. As a result, all birch ply imports into the EU exceed the ‘negligible risk’ threshold. Customs authorities should hold all shipments of birch plywood until EUTR checks are completed. These checks should follow guidance raised in point 6 above.
6. Member States, as well as EU and other funding bodies, should fund the expansion of Russian wood sample databases for isotopic testing. Further investment in sampling would enable more accurate testing of wood products for Russian origin.
1 Initially steel, like wood, was only banned if it was manufactured in Russia. In October 2022, however, as part of the 8th package of sanctions, Council Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine was amended with the addition of Article 3g, which further prohibited the import of steel products “when processed in a third country incorporating iron and steel products originating in Russia”. In October 2022, the steel import sanctions were further tightened through a requirement for importers to provide proof of origin of their steel products. See https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02014R0833-20241029
2 This is provided for by Council Regulation (EI) 2023/1214.
3 For more information on red flags, see: European Commission, Guidance for EU operators; Implementing enhanced due diligence to shield against Russia sanctions circumvention, available: https://finance.ec.europa.eu/system/files/2023-12/guidance-eu-operators-russia-sanctions-circumvention_en.pdf
