February 24, 2023 – America’s continued trade in Russian ‘conflict timber’ – valued at more than a billion dollars - is aiding terror in Ukraine and further enriching ultrawealthy Russians close to Putin, an investigation can reveal.
London-based environmental group Earthsight’s report – released on the first anniversary of Russia’s invasion of Ukraine - found:
- US ports are still receiving vast volumes of Russian plywood, including from oligarch-linked firms.
- Memphis-based International Paper, the world’s largest pulp and paper maker, reaped profits from a Siberian venture co-owned with two Putin allies for nearly a year after the invasion began.
Following the invasion, the EU and UK both imposed sanctions banning imports of wood and wood products from Russia – goods international timber certification schemes call “conflict timber”. The United States set punitive tariffs covering similar products.
Now, an Earthsight analysis shows Washington failed to halt the trade. As a result, plywood is now one of the largest remaining trading relationships America has with Russia, accounting for more than half of all Russian goods shipments landing on American shores between 10 November 2022 and 21 January this year.
More than 260,000 cubic metres of Russian birch plywood - with an estimated value of $1.2bn - has arrived in the US since the invasion began, customs records show. The expensive hardwood panels are in high demand for construction and furniture making.
Shipment records obtained and analysed by Earthsight name one supplier as a subsidiary of Russia’s largest logging firm, Segezha, which Earthsight previously linked to the billionaire Kremlin crony Vladimir Yevtushenkov. Drawing on company accounts, Earthsight estimates he has earned $44m from his stake in the company since the invasion began.
Yevtushenkov was among a select group of oligarchs who met with Putin on the day of the invasion in February 2022. Also at this meeting was Russia’s richest man Alexei Mordashov - sanctioned by the US in June 2022 along with companies under his control at the time, including timber firm Sveza.
Mordashov gave up his controlling stake in Sveza but retains a 49 per cent stake. Russian customs records obtained by Earthsight show two plywood shipments from Sveza to the US in early August, destined for North American Plywood Corporation (NAPC). ‘North American’ brand plywood supplied by NAPC is being sold by Menards, the US’s third-largest home improvement retail chain.
Meanwhile, International Paper made $203m in the 10 months following the invasion from its Siberian paper mill Ilim Group, co-owned with two billionaire oligarchs. Though it recently announced a deal to sell its stake, this has yet to be completed.
Fresh Earthsight research reveals Ilim has continued in recent months to buy logs from firms embroiled in one of Russia’s largest illegal logging scandals. The suppliers, connected to a wealthy regional politician known for his vocal support of Putin’s invasion, have received fines totalling $26 million for their actions.
Earthsight Director Sam Lawson said: “US consumers will be horrified to discover they could be purchasing products bought from Russian oligarchs who are key allies of Putin and whose cash helps prop up his regime.
“Unlike the EU and UK, the US has yet to press sanctions on imports of Russian timber. It is vital that the US government acts swiftly to do so, to remove US complicity in this conflict timber trade, which destroys precious forests and helps fuel Russia’s war on Ukraine.”
Earthsight can also reveal that the Russian military owns an area of forest more than twice the size of New Jersey, from which over a million cubic metres of logs are sourced annually. With the withdrawal of independent inspectors and with green labels exiting the country since the Russian invasion, it is impossible for US buyers of Russian timber to be sure this wood isn’t finding its way into their products.
Responding to Earthsight’s findings, Ukrainian activists reiterated calls for the US to ban wood imports from Russia.
Yehor Hrynyk, a forest conservationist with the Ukrainian Nature Conservation Group, said: “Buying Russian wood provides funds for Putin’s war and lines the pockets of super-rich oligarchs. America must follow the EU and Britain in stamping out the conflict timber trade. How many times must we shout this before Washington takes action?”
He said of International Paper’s decision to sell Ilim Group: “It’s the right decision but it came far too late. Month after month, International Paper earned millions from Ilim Group while Ukraine suffered appalling devastation and horror. It’s blood money.”
Ends
Notes to editors:
- Earthsight is a UK-based non-profit organisation that uses in-depth investigations to expose environmental and social crime, injustice and the links to global consumption.
- The report can be read here. It includes company responses to Earthsight’s findings.
- European Union officials say it is impossible to check whether wood from Russia is legal and sustainable after international timber certification bodies either scaled back or ended operations in the country following Putin’s aggression. Ethical label PEFC considers wood emanating from Russia and occupied Ukrainian territory to be ‘conflict timber’ – as does America’s largest woodworkers’ union.
For more information please contact: Clare Sterling at claresterling@earthsight.org.uk
