• Earthsight analysis exposes the Russian oligarchs with past and present links to President Vladimir Putin who are making a killing off a multibillion-dollar wood trade with Western firms
• The list includes powerful industry figures hit with Western sanctions in response to the Russian invasion of Ukraine, which was launched in part from Belarus
• Human rights and environmental groups have urged further action to boycott Russia and Belarus's lucrative exports, but most major importers of Russian wood in the US and Europe are ignoring their calls
• Big brands, retail chains and construction projects in the West use goods from Putin's cronies' companies

Russia is the world’s largest wood exporter. Though they pale in comparison with oil and gas, the value of these exports is significant. Europe, the US and Japan are all important markets, and the money flowing from them into Russia has been growing. EU imports fell in the aftermath of Russia’s annexation of Ukraine in 2014, but have since recovered. Last year saw them hit new highs. Imports jumped 50 per cent in 2021 alone, to reach €3.7 billion. The UK's largest imports from Russia, after precious metals and fossil fuels, are of wood products. In 2021 the UK imported 883,000 tonnes of wood, paper and furniture from Russia, worth £295m. US consumption has also been growing. Earthsight analysis reveals that five of the top fifteen largest importers (by tonnage) from Russia in the three weeks prior to the invasion were timber firms. Though China is the largest market for Russian wood, much of that also eventually finds its way to Europe and the US as furniture and other finished goods.

In the wake of Russia’s invasion of Ukraine, there have been growing calls from civil society, led by Ukrainian NGOs, for boycotts and sanctions to be levied on Russian and Belarusian wood exports. Earthsight has been researching and investigating the timber industry in both countries for some years. In support of the calls by our Ukrainian friends and colleagues, we have conducted a rapid analysis of the largest US and European importers of Russian wood, and also sought evidence of links between their suppliers and the Kremlin.

What we found is that Russian oligarchs with close historic ties with Vladimir Putin are behind the country’s largest logging companies and wood products exporters. These companies, in turn, are among the largest exporters of Russian wood to Europe, the US and Japan. Their lumber, plywood and paper are being sold at major retail chains such as Leroy Merlin, in high-profile construction projects such as the London Olympics and Trump Tower Toronto, and in the packaging of Mars and Kitkat sweets. Together these oligarch-linked firms control Russian forests with a combined area as large as France, forests home to precious wildlife including Siberian tigers, lynx and brown bear. Many of the suppliers and buyers profiled here have previously been exposed for involvement in illegal or destructive logging of high value forests in Russia or purchase of illegal Russian wood. This despite nearly all of their logging being ‘certified’ as legal and sustainable by leading global green labels.

Of the top 15 importers of Russian wood identified by Earthsight, whose names were shared with the press at the time the civil society boycott call was published, four have now committed to halting all imports from the country: the three Finnish global timber giants UPM, Stora Enso and Metsa, along with the retail chain IKEA. Many other major buyers have yet to take the same step, however.

The largest of these is US-based International Paper, the world’s largest paper company, which booked $1.6bn in profits in 2021.  Earthsight’s analysis indicates that the company is the second largest importer of Russian timber or wood products in the US or Europe. The firm has been importing $50m a year of pulp to feed its mill in Poland. It recently sold that mill but is still heavily engaged in Russia. It holds a 50 per cent stake in Russian logging and paper giant Ilim, the rest being owned by two of the Russian wood oligarchs Earthsight has identified. International Paper received dividends worth over a quarter of a billion dollars from Ilim in 2019.

The next largest firm still importing wood from Russia is Mondi, another multinational paper giant which supplies many household name retailers and brands in the West. Mondi, which had profits of €0.9bn in 2020, imported €130m of paper into the EU in 2020, mostly to Germany, Italy and Belgium. Mondi has suspended operations at its plant in Ukraine, but its Russian pulp and paper facilities continue to operate and produce tax revenues for the Russian state. It has not yet committed to halt those operations or imports from Russia.

Both International Paper and Mondi have featured in illegal timber exposés published by Earthsight in recent years. In 2018, we found that the two companies had sourced suspect wood from Ukraine for years, including wood connected to high-level corruption. International Paper’s joint venture Ilim in Russia was one of the buyers of wood from timber baron Evgeny Bakurov, whose massive Siberian illegal logging operation we documented last year.

Russia also exports large volumes of lumber, plywood and wood pellets for electricity production. Major buyers of these identified by Earthsight have also yet to commit to halting sourcing. These same firms have been exposed in the past for suspect wood sourcing practices. Leading German lumber importer Jacob Jurgensen, for example, has been repeatedly fingered by Earthsight for buying wood linked to Russia’s largest illegal logging case this century. The firm imported €59m of Russian wood products in the year to February 2021, including from companies owned by Vladimir Krupchak, one of the Russian timber oligarchs we identified, and whose £15m mansion in Buckinghamshire we have now identified.

Most of the wood Russia sells to the US is birch plywood. The biggest importer there is a mysterious firm whose true beneficial owners are hidden through shell firms, called RPL International. RPL has been buying wood from firms owned by two of the timber oligarchs we identified, including Russia’s richest man Alexei Mordashov, whose yacht was recently seized in Italy, and Vladimir Yevtushenkov, who has visited Russian-occupied Crimea with Vladimir Putin, lending credibility to its annexation.

Three of the firms on Earthsight’s list are importers of wood pellets for electricity production. Though two of the biggest power firms burning biomass have announced boycotts of Russian and Belarusian wood, none of the importers have. One of these is French energy giant Engie (€58bn annual revenues) which uses Russian pellets to feed its power station in Ghent, Belgium.

Many of the Russian timber oligarchs hide the true buyers of their wood by shipping it to Europe via shell companies there. But Earthsight has been able to identify some of the retailers stocking their products. Nestle and Mars, for example, have been using Russian paper from Vladimir Krupchak’s company in their packaging, while retail chain Leroy Merlin (the third largest DIY chain in the world) sells plywood made by Alexei Mordashov’s firm, plywood which has also been used in the past to build the London Olympic Stadium and Trump Tower in Toronto.

Earthsight has written to the big importers to ask what action they intend to take. Only Mondi responded. It did not commit to ending imports. As timber industry federations express increasing concern about the reputational risk concerned, and global green labels refuse to keep rubberstamping Russian wood, one wonders how long these companies can get away with failing to act. If they don’t, we expect their customers will.

The Timber Oligarchs

Alexei Mordashov

• On EU sanctions list. Alleged to have run 'personal bank' for top Kremlin officials
  
• Company under his control supplies DIY chain Leroy Merlin; products used in Trump Tower Toronto
  

Russia's richest man and the subject of recent EU sanctions. His mega-yacht was recently seized by Italian authorities. Though better known for his stakes in mining and steel firms, Mordashov also controls Russia’s second largest wood product exporter, Sveza. Sveza controls 0.7 million hectares of forest leases, around half of which is FSC-certified, and exports $0.7bn of wood a year, mostly birch plywood. Fifteen per cent of its exports are to the USA, 42% to the EU, 2% to the UK. Sveza's plywood was used in the construction of the Olympic stadium in London, and for Trump Tower in Toronto. Birch plywood produced by the company with a retail value of an estimated $0.5bn is sold in the USA each year. Large US buyers include Delaware-registered RPL International and US lumber giant Boise Cascade. The most recent shipments (including for RPL) were offloaded in California on 1^st March. In 2020 Sveza inked a deal to supply birch plywood to Leroy Merlin, a giant European DIY chain, ultimately owned by the super-rich Mulliez family of France.

Vladimir Krupchak

• Previously Russian Duma member for Putin’s political party
• His logging firms supply paper used by Mars and Nestle

Krupchak, little known in the west, was previously a member of the Russian Parliament for Putin’s party. Earthsight has confirmed that he is the ultimate beneficial owner of a group of companies in Arkhangelsk, a vast Russian province in the North West of the country, which produce pulp, paper and sawn lumber, mostly for export, and had combined revenues of $1.2bn in 2019. His logging firms control 2.6 million hectares of forest, all FSC-certified. Paper from these companies is being used in Nestle and Mars packaging. Krupchak is based in the UK, and Earthsight has located his £15m mansion there. ISB Group (€233m turnover), the largest distributor of wood to retail chains in France, is one of the biggest buyers in the world of spruce lumber from Krupchak’s Sawmill25. Van Leer, a leading EU importer/distributor of both lumber and pellets for bioenergy, imported $100m from Krupchak in the year to Feb 2021. Forty per cent of the paper exported by Krupchak’s firm is destined for Europe, but traded via an Austrian shell company so its true buyers disguised. One identifiable buyer is German wood/paper trader Jacob Jurgensen, which has in the past been a formal partner in Krupchak’s firms, and has also been repeatedly exposed by Earthsight for sourcing wood linked to illegal logging in Russia. Krupchak’s firms have previously been exposed by Greenpeace for logging ‘Intact Forest Landscape’, and in 2019 breached an agreement to halt such cutting.

Zakhar Smushkin / Boris Zingarevich

• Putin crony and ex-PM Medvedev helped found their pulp firm
• Pair run joint venture with US paper giant International Paper

Billionaire partners Smushkin and Zingarevich control pulp and paper giant Ilim Group, Russia’s largest wood processing company and biggest wood product exporter ($2bn revenues 2019) until it was overtaken by another oligarch-linked company last year (see Segezha below). Ilim controls an area of almost 9 million hectares of forest, mostly in Siberia in eastern Russia. Its 6.8 million hectares of FSC-certified forest produced 10.9 million cubic metres of logs in 2019. The company also sources wood from many third party suppliers, including leases controlled by Irkutsk logging baron Evgeny Bakurov, whose giant illegal logging operation Earthsight exposed in 2021. Most of Ilim Group’s exports are to Asia, but buyers in Europe include Arctic Paper, whose past customers have included the publishing group Random House. Since 2007, a 50% share in Ilim Group has been held by US firm International Paper, the world’s largest paper company. International Paper received dividends worth over a quarter of a billion dollars from Ilim in 2019.

Vladimir Yevtushenkov

• Visited occupied Crimea with Putin in 2016
• Sent €120m plywood to EU and $20m to US in 2020

Better known for his ownership of Russia’s biggest mobile telecommunications firm, Yevtushenkov (net worth $3.4bn as of April 2021) also owns the country’s largest logging firm, Segezha. Following a recent acquisition, Segezha now controls 16 million hectares of forest in Siberia and NW Russia – making it one of the biggest logging firms on the planet. Its allowable cut is almost 23 million cubic metres, dwarfing its nearest rival, Ilim (see above). Nearly all this forest is FSC-certified. The European Union is Segezha’s largest market: it sold wood and paper worth in excess of €190m to the bloc in 2020, with the biggest destinations being Germany, Finland, Denmark, Italy and France. It sold £14m to the UK and $20m to the US that year. US buyers of Segezha’s birch plywood include RPL International Inc. Because most of Segezha’s exports are to shell companies in the countries of destination, the identities of the true buyers are hard to ascertain. James Latham, one of the UK’s largest timber dealers, stocks Segezha’s plywood. Leading institutional investors in Europe, the UK and USA bought shares in Segezha when it went public in April 2021. Yetushenkov fell out with Putin in 2014 but quickly got back in his good books, and reportedly was among a select group of oligarchs who joined him on a tour to Crimea shortly after the Russian annexation. In September 2021 the Financial Times quoted him saying about Putin that “we have always done what the president said, without fail”.

Roman Abramovich

• On UK sanctions list. Has stakes in steel giant Evraz and Norilsk Nickel
• Once close confidant of Putin. Refuses to condemn Russia's invasion
• Partnered with Japan's largest housebuilder

Until recently held the single largest stake in RFP Group, the largest timber firm in the Russian Far East, and the second largest in all of Russia. Sold most of his stake in January 2022 for an estimated $154m, but still holds a 9% interest in the company. RFP has logging rights covering more than 4 million hectares. Its exports are principally to China, South Korea and Japan, including to Tokyo-stock-exhange listed IIDA, which is responsible for 30% of wooden house construction in Japan. Earthsight traced 3142 cubic metres of Dahurian larch lumber shipped by the company to the EU during 2020, with the largest buyers IWT Seesen in Germany and Van Hoorebeke Timber in Belgium. Both firms have been previously exposed by Earthsight as buying wood from a firm at the centre of Russia’s largest illegal timber case this century. RFP’s forests had been ‘certified’ as legal and sustainable by PEFC, though in the wake of the Ukraine invasion and in response to NGO calls the green label has now classed all Russian wood as conflict timber and excluded it from carrying the PEFC logo.