Trade data: Myanmar teak exports help fund military rule

Teak is one of the most valuable hardwoods and is used in yachts, home floors, doors, window frames and furniture. Myanmar is the largest timber producer, although its natural forests are shrinking.

Despite sanctions imposed in April, U.S. importers continued to receive teak cargoes from the Southeast Asian nation until December, data from Panjiva’s global trade database showed. Similar trends have been reported in Europe.

Myanmar human rights group Justice Group compiled the data. It urged the US and other governments to crack down on the teak trade under sanctions against the country’s military leadership.

Sanctions announced by the U.S. Treasury Department on April 21, 2021 prohibit transactions with Myanmar Timber Enterprises, a state-owned company under Myanmar’s Ministry of Natural Resources and Environmental Protection. It alone oversees the export of timber and sells it to private companies through auctions.

Sanctions prohibit U.S. individuals and companies from conducting all transactions with that company or those associated with it. It also imposed sanctions on the military-appointed minister of natural resources and environmental protection.

The EU imposed similar sanctions in June. It also banned transactions with Myanmar’s forest products joint ventures.

However, sales and shipments of teak and other valuable hardwoods to the United States continue. The timber arrived in 82 shipments between February 1 and November 30, 2021, mainly teak boards and other wood products used in boat building, outdoor decks, construction and furniture.

By buying through middlemen, importers are circumventing sanctions, the report said.

“Considering that the sanctions were designed to stop trade with the MTE, and timber exports from Myanmar were originally auctioned by the MTE,” the report said, the military still gets money from the trade, “regardless of who is officially exporting the timber,” the report said. .

It urged the U.S. government to enforce sanctions and investigate possible violations of restrictions.

It is unclear exactly where the teak wood ends up, as it is imported by construction lumber suppliers and other manufacturers. But teak is often used in patio furniture, decks and yachts for its flexibility and durability.

On February 1, 2021, Myanmar’s military, led by General Min Aung Hlaing, ousted the democratically elected government of Aung San Suu Kyi’s National League for Democracy. Aung San Suu Kyi was arrested and charged with some 12 crimes. On Monday, the 76-year-old Nobel Peace Prize winner was sentenced to four years in prison on top of his two-year sentence.

The military takeover sparked nonviolent demonstrations across the country that security forces have crushed with deadly force, killing more than 1,400 civilians, according to a detailed list compiled by the Political Prisoner Aid Society.

Peaceful protests have continued, but armed resistance to the crackdown has been building so much that UN experts have warned the country could plunge into civil war.

Timber is one of the most valuable industries in resource-rich Myanmar, bringing in millions of dollars in tax and export revenue each year. Local news reports said an auction in June brought in about 10,300 tonnes of illegally harvested timber confiscated by Aung San Suu Kyi’s government, bringing in $5 million.

The Myanmar military sold the timber from a stockpile of about 200,000 tonnes of illegal timber, the report said.

Myanmar began allowing private companies to build teak and other timber plantations in 2006, ending a state monopoly on the industry. In 2014, the government banned all log exports, lifted the ban on timber from state-run and private plantations, but kept the ban on natural forest timber.

Teak exports are subject to special approval procedures.

But a significant portion of the teak shipped out of the country is smuggled overland. Panjiva’s data only includes teak shipped directly from Myanmar, excluding other exports through intermediate destinations such as Eastern Europe, Taiwan and Thailand.

Given that teak and some other species are at risk of extinction in the wild, the coup-related sanctions overlaid other restrictions on imports of teak, designed to protect dwindling tropical forests.

The EU has strict requirements for documenting the origin of each log or plank. Reports from environmental groups and the European Union show that Myanmar suppliers often do not provide such clear evidence that the timber being exported is legally harvested.