If you are looking for EIA UK, it's overhere.

Russian Supplier to Lumber Liquidators Convicted of Organized Crime

The evidence against Lumber Liquidators, the U.S. wood products company currently under investigation by U.S. federal authorities for alleged violations of the U.S. Lacey Act, continues to accumulate. 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.

As detailed in the Environmental Investigation Agency’s (EIA) 2013 report Liquidating the Forests, Beryozoviy was a key supplier of valuable timber to a Chinese flooring manufacturer called Xingjia, the primary manufacturer of U.S. flooring retailer Lumber Liquidators’ Virginia Millworks line of solid oak and birch hand-scraped flooring. During EIA’s multi-year investigation tracking oak illegally cut in the Russian Far East to Chinese flooring manufacturers and onward to store shelves around the world, Lumber Liquidators emerged as the main buyer of flooring from the Chinese timber importer and flooring manufacturer Xingjia. Since the Lacey Act became law, Lumber Liquidators has imported millions of square feet of illegally sourced hardwood flooring from Xingjia.

In September 2013, the Department of Justice initiated a federal investigation of Lumber Liquidators for alleged violations of the U.S. Lacey Act, which prohibits import of illegally sourced timber, regarding imports of oak flooring illegally sourced from key Siberian tiger habitat in eastern Russia. The sentencing of one of Lumber Liquidator’s key suppliers for illegal logging appears to provide new evidence in the ongoing investigation.

With this conviction, the Russian government has taken decisive action against a documented Lumber Liquidators’ supplier. In its conviction, the court stated that the logging company Beryozoviy was a front created by an organized criminal group for the express purpose of illegal logging. Russian courts found that Beryozoviy conducted at least 15 separate instances of illegal logging between 2010-2012, a time period for which Russian customs records show that Beryozoviy was a supplier to Xingjia, and during which U.S. import records show that Xingjia was a supplier to Lumber Liquidators.

The Russian court also found that Beryozoviy was responsible illegal logging both within and outside of the company’s logging concession, located approximately 200 km north of the regional capital, Khabarovsk. Russian forest authorities estimated that over 1,500 cubic meters (m3) of valuable timber was stolen, which resulted in 66 million rubles (approximately $2 million USD) of associated damage to the economy and the environment. In one instance, the loggers strayed out of the forest lease and stole 327 m3 of valuable hardwoods from within Khoso Natural Park (Map 1), a protected area that contains the northernmost breeding grounds of the endangered Siberian tiger in Khabarovsky Province.

Map 1

The court sentenced the director of this criminal group to 15 years imprisonment in a penal colony, and handed down similarly strong punishments to the other four leaders. This verdict concluded a four-year investigation by Russian federal prosecutors into Beryozoviy, initiated as part of a nation-wide federal crackdown in response to what President Putin and other senior officials have recognized as wide-spread illegal logging and corruption. This is the first known conviction of illegal loggers under Russia’s strict anti-organized crime laws.

In multiple meetings with undercover EIA investigators, Xingjia officials described their practices of illegally harvesting high value timber in and around their own concessions (Figure 1) and sourcing the vast majority of their stocks from trading companies throughout the Russian Far East that provide no documentation for proof of origin or evidence of legality. In response to EIA’s request for documents that verify the origin of the timber Xingjia was selling, Xingjia provided undercover EIA investigators with copies of permits for a concession belonging to a company called “Beryozoviy LLC,” located in Khabarovsky Province. Russian customs records show that 100 percent of Beryozoviy’s listed timber exports in 2011 were purchased by Xingjia.

Figure 1: Document provided by Xingjia officials to EIA investigators as proof of their legal harvesting. The document is a concession permit by Beryozoviy, a Russian company recently convicted of organized crime and illegal logging.

The investigation by Russian law enforcement officials also reveals a close connection between Xingjia and Beryozoviy. In one instance, Russian law enforcement officials were able to identify the log yards to which illegal timber was trucked. One yard is located on Tsellinaya Street, a short street in an industrial suburb of Khabarovsk. During a visit in 2012, EIA investigators were escorted by Xingjia officials to the largest of the sawmills, at number 8b Tselinnaya Street (Figure 2).

Figure 2: Xingjia's log yard in Khabarovsk, at 8b Tselinnaya St. Xingjia owns at least 4 of the 5 sawmills on this short street, identified as the intended destination for some of the illegal timber seized from Beryozoviy.

The Russian government is taking aggressive action to curtail the criminal forces that continue to decimate its unique and valuable forces. However, these efforts are unlikely to deliver significant impact for the forests of the Far East if cheap, illegal wood products are still welcomed by the international market. The United States, which remains a key export destination for timber from Russia, must take action to hold accountable those which are found to be sourcing illegally harvested timber, in violation of U.S. law.

To read in Chinese: Click Here

View all Blog Posts

Recent Blog Posts

Perú: Juzgado podría anular resolución que benefició a Tamshi SAC tras deforestar sin autorización
Un juez está evaluando anular una cuestionada resolución del Ministerio de Desarrollo Agrario y Riego del Perú (MIDAGRI) que intentó regularizar la deforestación no autorizada de 2,196.44 hectáreas de bosque natural Amazónico realizada por la empresa Tamshi SAC entre los años 2013 y 2016.
While the coronavirus pandemic rages on, ravaging Zambia’s economy and crippling its citizens' lives, new findings by the Environmental Investigation Agency (EIA) show that illegal exploitation and trade in mukula (Pterocarpus tinctorius) persists unabated, benefitting a small number of well-connected and wealthy individuals. A probing undercover investigation into illegal mukula logging and trade sheds light on the apparent theft of more than 10,000 trees and unveils information connecting the Zambia Agency For Persons With Disabilities (ZAPD), the Ministry of Community and Social Services, the Ministry of Tourism and Arts, and the office of the vice president. Nearly two years after EIA’s exposé on the institutional looting of Zambian forests, it appears that the more things have changed with the pandemic, when it comes to mukula, the more they’ve stayed the same.

Recent Reports

How U.S. Imports of Agricultural Commodities Contribute to Deforestation and Why it Matters
A significant proportion of agricultural commodities produced on illegally deforested land enter global supply chains, exposing major markets such as the U.S. to environmental and human rights abuses, corruption, and organized crime through imports of raw materials and related manufactured goods, while undercutting companies trying to source legally and responsibly.
The Lie Behind the Ply
In an unprecedented investigation that connects threatened forests of Solomon Islands, China’s timber manufacturing hubs, and European importers, our new report The Lie Behind the Ply reveals how European consumers of tropical plywood have been the unwitting drivers of forest degradation. Our findings show that European companies appear to have imported thousands of tons of tropical-faced plywood, at high risk of containing illegal wood and in apparent violation of European law.

Recent Press Releases

US Company Pleads Guilty to Importing Illegal Timber from Peru
A United States timber importer, Global Plywood and Lumber Trading LLC, has pleaded guilty to importing illegal timber from Peru in violation of the US Lacey Act, which prohibits trade of illegal timber products into the country. A six-year investigation conducted by Homeland Security Investigations, Customs and Border Protection, and the Department of Justice, proved that at least 92% of the Global Plywood timber in this shipment had been illegally logged in the Amazon rainforest
Empresa norteamericana se declara culpable de importar madera ilegal del Perú
Este mes, un importador de madera de los Estados Unidos, Global Plywood and Lumber Trading LLC, se declaró culpable de importar madera ilegal del Perú en violación de la Ley Lacey de los Estados Unidos, que prohíbe el comercio de productos madereros ilegales en dicho país. Una investigación de seis años llevada a cabo por las autoridades del gobierno norteamericano Homeland Security Investigations, Customs and Border Protection y el Departamento de Justicia, demostró que al menos el 92% de la madera de Global Plywood en este envío había sido talada ilegalmente en la selva amazónica.
Follow us @eiaenvironment on twitter for the latest updates!