Thirty-one Romania timber companies were fined a total of 26.6 million Euros by the Romanian Competition Council.

See: U.S. imports of softwood lumber from Romania

Line chart of US imports of Romanian timber

As Europa FM reports, the fines are unprecedented, not just for Romania, but for most countries. One company faced a fine of about 10.6 million Euros. That’s nearly equal to the largest fine ever issued in the United States to a wood products company.

The Council investigated tenders by various forest managers and owners during the period 2011-2016 and found that, in 45 of the cases, competition laws were violated.

See: Idaho timber sales bidder collusion may have cost the state $43 million

According to the Council, companies coordinated their behavior with regards to their intent to bid on certain lots of timber.

Romsilva tenders are generally attended by small companies, which then supply the wood with large companies with wood processing plants.

The big companies organized the participation in the auctions, they told the smaller ones which auctions to go to, at what prices they can participate in the auctions, in order to prevent a competition at the level of the auctions, which would have led to the increase of the prices received by Romsilva.

President of the Competition Council, Bogdan Chirițoiu. Source: Europa FM

As a result, the Council claims that the companies eliminated competition between them to procure timber at the lowest possible price. This caused the state to collect less money.

See: Is wood distribution from rigged timber sales illegal under the Lacey Act?

Thirteen of the 31 companies admitted to “infringing” on the competition law. As a result, they received reduced fines.

Interestingly, at the time of this publication, six of these 13 companies appear to hold FSC-certificates according to an FSC database search.

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