Has Poland become a European timber hub that avoids sanctions?

Disturbing data comes from the Polish building materials market. There are many indications that we have no reason to rejoice at the falling prices of wood products, because it is very likely that they come to us from Russia and Belarus, with countries such as Kazakhstan, Turkey or China as intermediaries

The PSB Handel SA Group follows the prices of leading materials for construction and home and garden. Prices in May 2023 increased on average by 5% compared to May 2022. At the same time, wood and OSB boards became cheaper by 24%. All this is happening in a situation where before the outbreak of a full-scale war in Ukraine, both Russia and Belarus were major import destinations. Now it is theoretically banned due to European sanctions, but the practice turns out to be very different.

Lithuania has already taken action against rogue entrepreneurs who work indirectly for the benefit of Putin’s regime. There are known examples of pile companies that officially imported significant quantities of timber from Kazakhstan to this country, and previously had nothing to do with such trade. Lithuanian government authorities have launched several procedures to verify the true origin of wood-based materials. Everything indicates that Russia and Belarus are the countries of origin of these products.

Do such control activities also take place in Poland? There are many indications that the public administration is slowly recognizing the problem. The question remains when we will see the effects of any specific actions. The National Revenue Administration confirms to us that Kazakhstan, Ukraine and China are currently the main import directions for wood and derived materials. The press section also notes “that the problem of timber imports from Kazakhstan is a challenge faced by all EU member states. The problem is known to the customs authorities, we diagnose the risk of evasion of sanctions when importing these goods, we carry out analyzes and take appropriate measures. However, at this stage we cannot disclose KAS’ activities in this area.

Unfortunately, the knowledge on which KAS operates is not new. Already at the beginning of the year, the sector analysis team of the Economic Analysis Department of Bank PKO BP informed with regard to wood products that “there were also deliveries from directions from which Poland had not previously imported wood raw materials, e.g. from Vietnam or Kazakhstan, which on October 22 became the main supplier of plywood and veneered boards Kazakhstan, unlike Vietnam, was not a major producer or exporter of plywood until 2021. Kazakhstan also became the main supplier of these products to Lithuania – in October ’22 it accounted for nearly 40 % of deliveries while until 22 July imports from this direction were nil.” And finally, a comment that should set all the warning lights on: “it can be assumed with high probability that plywood imported into the European Union from Kazakhstan does not come from this market”.

If that wasn’t enough, you can collect even more clues on the plywood example. According to export data from Kazakhstan, 23 thousand cubic meters of plywood went to Poland in the first quarter of 2023. With 34 thousand cubic meters of total production! Suddenly almost 70 percent of the exported goods from a country that was not a significant exporter to Poland comes to Poland. production. Case?

It is also surprising where such volumes come from in Kazakhstan. The total annual production of plywood before 2022 did not exceed 20,000 cubic meters. Now we’re talking about higher volumes in a quarter. It must be assumed that these amounts will only grow in the Polish direction, as other countries on the list of importers, such as Lithuania, are actively fighting this practice.

In the event that illegal Ukrainian grain appears on our market, KAS is constantly taking measures to protect Polish farmers. In June, agents searched 222 importers and customs agencies. Accounting documentation and details regarding imports and contractors were secured. All alarming signals are being dealt with by the Public Prosecutor’s Office in Rzeszów, so you can count on systematic actions.

Verification of the Polish distribution network for wood materials may be necessary as it is worrying that none of the major distributors operating in Poland were willing to answer our questions about their own procedures to ensure that the products they put on the market do not come from sanctions. They hid behind trade secrets and the complexity of the processes. During conversations with KAS agents, this may not be enough.

Source: Do Rzeczy