Primpanel fined SEK 360,000 ($43,000) last month for buying Ukrainian timber in violation of the European Union Timber Regulation in 2019 and 2020. The company had continued to import the timber in direct violation of an official order, and sought to hoodwink Swedish authorities by routing the fresh shipments via subsidiaries and intermediaries.
The administrative court in Jonkoping uphled the Swedish Forestry Agency's ruling against Primpanel
This blog can be read in Ukrainian here.
In 2019, an Earthsight investigation revealed
that Swedish and
Italian firms had been importing timber from a Ukrainian company connected to
Viktor Sivets, who was known to be the primary architect of the present-day
system of corruption in Ukraine’s forestry agency. Sivets, who led that agency
from 2011 to 2014 and his wife, Marina Zhuravleva, are at the centre of an
ongoing £30 million criminal case for allegedly accepting bribes from foreign
companies in exchange for access to timber.
reportedly hand-picked for the top job at the SAFR by the kleptocratic
Ukrainian President Yanukovych – who was deposed in 2014 - and the two were
known to be close associates and tennis and hunting buddies. He is alleged by
prosecutors to have orchestrated a system of kickbacks, where foreign companies
were asked to pay a ‘’marketing fee’’ to companies controlled by him and his
wife in return for preferential access to timber. A subsidiary of one of the
largest timber companies in the world, Austrian firm Holzindustrie Schweighofer
is also caught up in the scandal and is named by prosecutors as one of the companies that allegedly bribed Sivets.
2019 investigation detailed how for at least three years since the criminal
case against the couple was opened - the largest corruption case involving
Ukrainian forestry officials to date - four Italian companies, Co Mo Las,
Sangiorgi Legnami, Basso Legnami and LP Wood SRL, and one Swedish firm,
Primpanel AB, had received shipments of wood panels from firms controlled by
the couple, with a total value of $500,000.
the publication of Earthsight’s story in June 2019, the Swedish Forestry Agency
(which functions as the Competent Authority for the EUTR in Sweden) imposed a
ban in September 2019 which forbade Primpanel from placing any timber covered
by the EUTR on the EU market (whether from Ukraine or elsewhere) until such a
time as it had an appropriate due diligence system in place.
was informed of the ban on 1 October 2019. But instead of complying, it chose
to try to hoodwink the Swedish authorities.
2019 and June 2020, the company received nine shipments from Ukraine in
contravention of the ban. The company attempted to disguise its involvement by changing
the recipient name for some of the shipments from itself to a subsidiary.
questioned the Swedish Forestry Agency’s handling of the case and stated that
it should have been approached to "find a solution" first. It also claimed
that it had not imported anything from outside the EU since the ban in 2019 and
that customs records that indicated the contrary were incorrect.
In May 2021,
however, an administrative court in Jonkoping ruled in favour of the Swedish
Government in the case and fined Primpanel a total of SEK 360,000 ($43,000).
of the Swedish competent authority which brought the case told Earthsight: “The
operator continued to import during 2020, despite [the] prohibition. They also
shifted imports first to a daughter company, that lacked a due diligence system
as well, then tried to use a transport company as consignee. The ban had said
breaches would be punished with fines of 40,000 SEK per case, thus a
total fine of 360 000 SEK has now been decided by the administrative court
who sided in our favour.”
The fines only relate to the period up to June 2020, but Earthsight has obtained Ukrainian export records indicating that Primpanel was continuing to flout the ban at least as recently as January this year, when the records indicate it received a shipment of 135kg of wooden boards from a Ukrainian company. Later records are not yet available. It seems the court’s decision may not be the end of this saga. Earthsight has shared its findings with the Swedish authorities.
The reaction of the
competent authority authorities stands in apparently stark contrast to their counterparts
in Italy. Though four of the five firms named by Earthsight in our report are
Italian, we are not aware of any action having been taken there. Despite
repeated attempts we have been unable to reach the Italian authorities for