U.S. traders flouting sanctions on buying Myanmar teak, report says

U.S. traders flouting sanctions on buying Myanmar teak, report says

A new report shows that U.S.-based timber traders continued to import thousands of metric tons of Myanmar timber, despite sanctions imposed following the February 2021 military coup and brutal crackdown on citizens.More than 3,000 metric tons of teak, a material highly prized in the manufacture of luxury furniture and yachts, were imported into the U.S. since February 2021, the report says.Claims that imported timber is coming from stockpiles harvested and set aside prior to the 2021 coup are dubious, the report says, and the accuracy of timber tracing technology to verify legality in this time of conflict in Myanmar is highly questionable.The report calls on U.S. authorities to do more to regulate the timber trade and enforce sanctions to make sure companies and the public are not unwittingly financing the “brutal” military regime. Vast quantities of timber from Myanmar continue to enter the United States despite sanctions on the country’s state-controlled timber monopoly, according to a new report from U.K.-based watchdog group the Environmental Investigation Agency (EIA).

Following the February 2021 military coup and violent crackdowns on citizens, countries including the U.S., Canada, the European Union, Switzerland, and the United Kingdom placed sanctions on Myanmar’s junta leaders and military-run enterprises from the forestry, mining, and oil and gas sectors in an effort to curb the regime’s access to natural resource revenues.

However, according to the new report, U.S. timber traders imported more than 3,000 metric tons of Myanmar teak into the U.S. over the past two years.

The sanctions have had “no major impact on the trade of Myanmar teak into the US,” according to the report. “Instead, trade has continued at the same levels as before the coup, with the fourth quarter of 2022 seeing some of the biggest monthly imports since the time leading up to and after February 2021.”

Figure from the recent Environmental Investigation Agency report showing statistics for key ports of teak entering the U.S. Data from April 21, 2021 to March 30, 2023 compiled and analyzed by EIA.
Teak (Tectona grandis) possesses natural water resistance and is much sought-after for high-end furniture, flooring and for fitting out luxury yachts owned by some of the richest people in the world.

Given that Myanmar or Burmese teak is considered among the highest quality in the world, international demand for the timber is a major driver of deforestation in the country. With a Belgium-size area of forest lost between 2001 and 2018, the EIA predicts that Myanmar’s forests will disappear by 2035 if the current trend continues.

This would be a serious blow for biodiversity. Myanmar’s remaining tracts of intact forest include some of mainland Southeast Asia’s most biologically rich landscapes. They’re home to charismatic species like the Asiatic black bear (Ursus thibetanus), the sun bear (Helarctos malayanus), several gibbon species and critically endangered Sunda pangolins (Manis javanica). Moreover, species that occur nowhere else on the planet cling to existence in remaining forest refuges. Fewer than 260 Popa langurs (Trachypithecus popa) are thought to remain in the world, for instance, all of them residing in four isolated patches of forest in Myanmar’s central plains.

The 2021 sanctions were levied on state-controlled company Myanma Timber Enterprise (MTE), which effectively holds a monopoly over the entire forestry sector. MTE regulates all harvesting and sales of timber in Myanmar and draws a percentage of all timber export revenue, thereby representing a key source of income for the military regime.

The Popa langur, a species only described by scientists in 2020, is staring extinction in the face in isolated patches of Myanmar’s forests. Image by Thaung Win via Creative Commons (CC BY-SA 4.0)
Secrecy stymies sanctions
The report identifies the top 12 U.S.-based companies that have imported Myanmar teak since the 2021 coup. Two companies, East Teak Fine Hardwoods and J. Gibson McIlvain, account for 88% of all teak imports during that period, trading a combined 1,600 metric tons of teakwood. Neither company responded immediately to Mongabay’s requests for comment.

The EIA says it provided all 12 company identities to U.S. authorities in December 2022 to give them an opportunity to investigate and act. At that time, the dozen firms had imported 2,760.46 metric tons of teakwood since sanctions were imposed. In the intervening period, up until May 2023, the EIA says a further 308.24 metric tons of Myanmar teak have entered the U.S.

U.S. traders continuing to import timber in defiance of the sanctions aren’t only acting beyond the law — they’re also essentially supporting a regime consistently committing human rights abuses, the EIA says. Since the coup, violent crackdowns on pro-democracy protesters and deadly airstrikes on civilian targets have been widely reported. According to the Assistance Association for Political Prisoners (AAPPB), the military regime has killed 3,558 civilians and arrested more than 22,531 people since the coup.

“By closing their eyes to the brutality of the military regime, both traders and those consuming teak for their yachts and floors are supplying much needed hard currency to a junta bankrupting the nation, supporting ever-increasing criminality within the country and enabling corruption,” the EIA report says.

Further to the sanctions imposed in response to the 2021 coup, Myanmar teak also cannot be traded in compliance with the U.S. Lacey Act, which requires that imports of wildlife, fish or plants must be legally harvested under the exporting country’s laws. This should in theory prevent imports of illegally sourced timber into the U.S.

A barge transports teak logs from forests in northern Myanmar via the Irrawaddy River to markets in Mandalay or Yangon. Photo by Terry Feuerborn via Creative Commons (CC BY-NC 2.0)
The report says that some timber trading companies claim their teak was harvested and stockpiled prior to the coup. However, with the MTE under military control, Myanmar’s timber auctions have become more opaque, making it difficult to trace the provenance and legality of timber, the report warns. The military junta rarely disclose revenues generated from timber sales, or make clear where timber traded at auctions is sourced from.

The lack of transparency essentially renders it impossible to tell whether exported timber came from stockpiles purchased before the coup and whether it was legally harvested. The likelihood that any legal timber is mixed with illegal timber “is extremely high,” the report says. It adds that the military is also unlikely to be following national laws that ban exports of raw timber and that any third-party verification of lumber via DNA testing is dubious due to the challenges of accessing trees and timber in Myanmar during the current unrest.

The continued trade highlights the challenges of tracing timber and enforcing sanctions and regulations. The EIA report is the latest in a string of investigations documenting the failure of sanctions to stem the flow of Myanmar timber into North America and Europe.

In 2021, advocacy group Justice for Myanmar (JFM) found that U.S. firms were circumventing sanctions by buying timber from private brokers, instead of directly from MTE, many of whom were shipping timber via intermediate countries like China.

Also in 2021, Forest Trends reported that almost one-fifth of Myanmar’s total timber exports reported between February and November 2021 went to countries with active sanctions on MTE. According to the Forest Trends report, the overall number of companies importing sawn teakwood into the U.S.  » …
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