Birch plywood suppliers likely face heightened legal risk when buying Birch from Russia. Watch dogs that scrutinize supply chains for illegal wood flows could turn their sights on Birch plywood originating from Russian forests, if they haven’t already. If Birch plywood supply chains are found to involve Lacey Act violations, or even just alleged to, this could lead to long-term Birch plywood supply constraints.
Birch plywood from Russia
As of 2019, 10% of U.S. hardwood plywood was directly supplied by Russia. Indirectly, it’s possible that Russia accounts for 20% of U.S. hardwood plywood consumption considering that plywood from other major countries like Vietnam and Indonesia can originate from logs harvested in Russian forests.
Most of the hardwood plywood from Russia is Birch. Often sold as Baltic Birch, Russian Birch or just Birch, plywood made from species of the Betula genera is in high demand by manufacturers for its technical properties. Because of this, Birch plywood is common in cabinets, furniture, flooring (cores), and even RVs and skateboards.
The supply of Birch plywood to make these products could become a long-term problem as suppliers of Birch plywood could suddenly face heightened legal risk.
The crime of selling products made from illegal wood
Under the Lacey Act, penalties for selling a product in the United States made from illegally harvested wood can involve 5 years in jail, and a personal fine of $250,000. It can also lead to the forfeiture of the merchandise and smuggling and money laundering charges.
The Lacey Act is rarely enforced on wood supply chains in the United States despite illegal timber harvests being frequent and evidence that it exists on a large scale.
When the Lacey Act is enforced, it seems to be done in an effort to target supply chains originating outside of the United States.
In fact, there’s evidence that the wood amendment to the Lacey Act was developed as a means to lever trade influence, and give U.S. forest product producers an advantage over foreign ones.
Using the Lacey Act to target country-specific supply chains
Enforcement of the Lacey Act within the wood products industry has been largely orchestrated by the environmental watch dog known as the Environmental Investigation Agency (EIA).
In the mid 2010’s, the EIA investigated forest product supply chains in Peru which lead to the forfeiture of wood shipments in the port of Houston. During this time period, the U.S. government was funding efforts to reform Peruvian forest governance to the tune of about US$ 90 Million over a decade.
More recently, the EIA has targeted Teak supply chains originating in Myanmar for funding a government which was installed by a military coup in February 2020.
And, the EIA has already investigated U.S. companies importing forest products from Russia like Lumber Liquidators…
Senior executives of the Russian timber company “Beryozoviy,” which supplied high value timber to Lumber Liquidators, were found guilty by a Russian court in December 2014 of 15 counts of illegal logging occurring between 2010-2012 and of participation in a criminal network.“Russian supplier to Lumber Liquidators convicted of organized crime” – EIA
Birch plywood suppliers under the microscope
Importers of products originating in Russian forests could find themselves increasingly under the microscope of the EIA and other timber trade watch dogs.
Illegal logging in Russia happens frequently and on a large scale. Even supply chains “certified” by well known international forest monitoring organizations are alleged to be tainted with illegal wood.
And under the Lacey Act, it’s not just importers that could be liable for illegal Russian timber allegations, but anyone in the supply chain. This includes name-brand cabinet manufacturers, RV makers, and even the big box retailers.
While Russian foreign policy, and much of the world’s response, seems to point to short-term supply constraints of Birch plywood, this could become a long-term problem if legal action under the Lacey Act is taken against US plywood supply chains originating in Russia.
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