News  |  22.04.2022

Conflict in Ukraine and sanctions against Russia: the consequences on the timber market

As relayed by Le Commerce du Bois, the European Union has decided on new sanctions against Russia. Although these measures do not impact the tropical timber trade for the moment, it is likely that the situation will have repercussions on the tropical sector in the weeks and months to come.

Conflict in Ukraine and sanctions against Russia: the consequences on the timber market

On April 8, the Council of the EU adopted a fifth set of sanctions against Russia due to Russia's continuing war against Ukraine.

In summary, all timber is now banned for import and timber exports are restricted. In addition, the new bans do not apply to the execution until 10.07.2022, of contracts concluded before 09.04.2022. With regard to maritime transport, vessels flying the Russian flag can no longer access EU ports since 16 April 2022. The same applies to ships that changed their Russian flag after 24 February 2022. Regarding land transport, freight forwarders established in Russia can no longer transport goods to the EU.

Some measures directly affect timber products and others indirectly with the ban on Russian ships entering EU ports or the ban on Russian or Belarusian road hauliers entering the EU.

The 5th set of sanctions includes a ban on :

  • the access of all Russian ships to EU ports
  • the entry of Russian and Belarusian road transporters into the EU
  • imports of goods including timber

For more information, you can read the LCB article dedicated to this subject.

In addition, regarding Belarus, the EU Council decided to go further, by introducing a new wave of sanctions, given its role in the invasion of Ukraine by Russia. In particular, the Council has introduced until June 2022 a ban on:

  • importing timber products from Belarus or exported from Belarus into the EU
  • transporting timber products if they are from Belarus or are exported from Belarus to any other country

What are the consequences for the timber market? Financial and logistical impacts can be expected, adding to the volatility of the markets. Indeed, the EU financial sanctions may complicate financial transactions and logistics for supplies. In addition, certification schemes are also affected by this situation: timber produced in Russia and Belarus is considered as "conflict timber" and therefore cannot be FSC (see FSC note on this subject) or PEFC (see PEFC note) certified.

To be followed according to the evolution of the situation.