The import of teak from Myanmar continues despite European sanctions

This research story consists of a diptych. Read also: How teak from Myanmar illegally ends up with Dutch superyacht builders

In Myanmar, on February 1, 2021, years of fragile democratic reforms came to an end. The army, called the Tatmadaw, seized power again and placed democratic leader Aung San Suu Kyi under house arrest. The population, which had previously lived under military rule for decades, took to the streets en masse. The army brutally suppressed the protests and killed at least 1,000 civilians in six months. Since then, a battle has raged between the army and numerous armed resistance groups, resulting in many deaths. Because journalists are not allowed to work freely in Myanmar, the true scale of human rights violations is unknown.

A few months after the coup, both the EU and the United States imposed sanctions against the new regime. Among others, the state forest company Myanma Timber Enterprise (MTE) ended up on the sanctions list. Since the coup, the military has had full control over MTE, which has a monopoly on the production of Myanmar teak. This wood is known as the best teak in the world and is mainly used in luxury yacht building. MTE is an important source of government revenue, revenue that has directly benefited the junta since the coup. As of June 21, 2021, European companies are no longer allowed to do business with MTE.

How difficult it is for some European wood importers to say goodbye to teak from Myanmar, will become clear in November 2022, for example, when yacht builders from all over the world will gather in the Amsterdam RAI for one of the largest trade fairs in their field. For three days, the conference floors are filled with everything you need for a luxury yacht: anchors, radar systems, clothing for the ship’s crew, punching bags and fitness equipment for the onboard gym. And ship decks.

Stiff and weather resistant

Because of its strength, natural skid resistance and weather resistance, Myanmar teak is the “king, emperor, admiral” to decklayers. However, it has been difficult to obtain since sanctions were introduced.

But if you look carefully, you will find companies that offer teak from Myanmar among the cheese cubes, bitterballen and goodie bags in the RAI. There is an Italian trader who says he has “the right papers” to import teak from Myanmar despite the sanctions. There is an Indian trader who others say buys timber from Myanmar and then resells it as “Indian” teak. The man himself denies that.

Dutch traders all say that they can no longer import teak from Myanmar. A few complain that the Netherlands has become “the country of Greenpeace” where nothing is allowed anymore. And they all point out that imports to the Netherlands have stopped completely, but that they are continuing smoothly via Italy.

Last year, Italy imported more than 14 million euros worth of teak directly from Myanmar

Customs figures confirm this: Italy imported more than 14 million euros worth of teak directly from Myanmar last year, despite the sanctions. In other European countries, imports have fallen to almost zero, with the exception of Poland (1.8 million euros) and Spain (1.3 million euros).

Documents in the hands of NRC show that part of the wood that arrives in Italy goes on to the Netherlands. In 2022, the Italian teak trader Comilegno bought over 29 cubic meters of teak from Myanmar. That consignment arrived in the port of Trieste, after which part was transported to a timber merchant in the Netherlands. “Burma teak” is written on the invoice, referring to the former name of Myanmar.

The accompanying documents show that the batch of wood originates from MTE, the state-owned forest company that is on the European sanctions list. Some of the logs have been cut down in Gangaw district. There have been fierce battles in that area between resistance fighters and the Myanmar army. According to Japanese broadcaster NHK, the army killed at least 57 people and burned hundreds of houses in the year after the coup in Gangaw. Local residents describe the practices as “scorched earth tactics.” According to the US State Department, there are also signs of abuse and torture in Gangaw.

Bought before the coup

How is it possible that Italy allows these kinds of parties through, despite the sanctions? The wood that comes to Europe is accompanied by a pack of paper full of stamps and signatures to prove its legality. The Singaporean inspection company Double Helix states that the batch was ‘legally transported, purchased, processed and exported’.

The papers state that the wood was cut between 2015 and 2018, well before the coup. In a response, Comilegno says that international jurists have determined that the sanctions do not apply to logs that MTE sold to the sawmills in Myanmar before the sanctions took effect on June 21, 2021. Lieutenant Colonel Claudio Marrucci of the Carabinieri Forestali in Rome confirms this to ICIJ partner IRPIMedia. Wood purchased before the coup is still allowed in Italy.

According to the action group Justice for Myanmar, which uses research to draw attention to abuses in that country, importers cannot rely on these types of documents. “It is nonsense to rely on junta documents to justify importing teak from Myanmar,” said Justice for Myanmar spokesman Yadanar Maung.

The Dutch timber trader, whose name is not mentioned by NRC for privacy reasons, did not buy the timber directly from Myanmar’s MTE. He bought it from the stock of the Italian Comilegno, which bought it back from the Myanmar sawmill Win Enterprise, which bought the wood back from MTE. How much can the Dutch timber trader be blamed? The Public Prosecution Service provides little clarity in a response. After a description of the case, the OM says that it depends on “the concrete facts and circumstances of the case” to determine whether there has been a violation of sanctions.

New weak link

At the yacht fair in the RAI, various traders say that import via Italy is also becoming increasingly difficult. The longer the sanctions are in place, the less wood purchased before the coup is available.

But timber merchants have found a new weak link. In 2022, a small 190 tons of teak will pass through Polish customs directly from Myanmar. Part of this is destined for the Austrian timber company JAF. The Polish investigating officers do nothing. They have a different argument than the Italian one: according to Polish customs, the import of teak from Myanmar is legal as long as it is not purchased directly from MTE. This while MTE has a monopoly on the production and export of teak in Myanmar. JAF writes in response to questions from Austrian and German journalists that the imported timber was probably cut after the sanctions and says it made a “mistake”.

Traders say that importing via Italy is becoming increasingly difficult, but they have already found a new weak link

In response to questions from NRC, the Dutch Public Prosecution Service writes precisely that “the sanction provision prohibits both direct and indirect [aan MTE] to be made available”. And also the Italian Ministry of Agriculture, Food Security and Forests, says to Italian ICIJ partners that it can intervene in case of both direct and indirect involvement of MTE.

These differences in interpretation between Member States are too great for the sanctions to be really effective. “These differences can only disappear once there is jurisprudence,” says Cedric Ryngaert, professor of international law at Utrecht University. “Only the Court of Justice in Luxembourg can provide an authoritative assessment of the precise scope of the sanctions.”

Ryngaert has comments on both the Italian and Polish interpretation of the sanctions. According to the professor, Myanmar teak may only enter Europe if a European company has paid that party before the start date of the sanctions. And not if the wood was bought from a Myanmar sawmill after the sanctions came into effect. About the Polish statement that the sanctions do not apply as long as the wood is not purchased directly from MTE, he says: “That really sounds like avoiding sanctions. You pretend to be blind.”

There are also plenty of options outside Europe to avoid the sanctions. There are several traders in India who buy wood from neighboring Myanmar and resell it to European companies as ‘Indian teak’. In a WhatsApp message from July 2022 that NRC has seen, an Indian timber trader offers teak from Myanmar that he can enter the books as “Cameroonian teak”. “Easy to sell in Europe or the US,” writes the trader. “All necessary documents will be provided. A container has already been cleared in Italy with the same documents.”