Concorrena

EU extends anti-dumping duties on wood to Kazakhstan and Turkey

A Commission investigation has established the import of Russian birch through these two countries. Azzi (Fla): 'First step in the right direction'

EPA/KIMMO BRANDT

4' min read

4' min read

A first step that marks a clear direction and - despite the slowdown in activity due to the European elections - should soon see further developments. In fact, the European Commission has recently extended the anti-dumping duty on the import of birch plywood from Russia to Kazakhstan and Turkey as well, after eight months of investigations that revealed the Russian origin of the plywood itself or of the wood used by four Kazakh and Turkish suppliers to produce the semi-finished products to be sold later in Europe and by 31 companies from nine member countries (Poland, Germany, Romania, Bulgaria, Latvia, Hungary, Lithuania, the Netherlands and Greece) that imported more than 43 million euros worth of plywood from these producers.

Business satisfaction

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This decision was warmly welcomed not only by European birch plywood producers, directly affected by the circumvention of anti-dumping regulations imposed in 2021 by the EU against Russia, but also by the European timber system as a whole, explains Nicoletta Azzi, councillor of Assopannelli of FederlegnoArredo, one of the European associations in the sector, united in EPF, which together with the Woodstock Consortium denounced possible circumvention activities (see also Il Sole 24 Ore of 31 December 2022), triggering the Commission's investigation.

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"Following the Covid-19 pandemic and Russia's invasion of Ukraine, the cost differential between European and Russian birch plywood became enormous and this also affected the price of plywood made from other types of wood, e.g. poplar or hardwoods, so the damage affected many companies.

Investigation details

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According to Earthsight (a non-profit social and environmental crime investigation association that supported the Commission in this investigation), the 31 European companies involved allegedly imported - in the last three months of last year alone - more than 10,000 cubic metres of plywood, worth around EUR 43 million. The EU's investigation found that Russian plywood, logs and birch veneer began arriving in Kazakhstan, for the first time, only in 2022. Between July 2022 and June 2023, imports of Russian plywood from this country increased sevenfold and imports of logs and veneer increased fourfold. A similar dynamic affected Turkey's imports of birch plywood from Russia, which tripled between 2021 and 2022, and those of veneer, which increased more than 10-fold between 2019 and June 2023.

The Commission also pointed out that the volume of imports from Kazakhstan and Turkey by the EU in 2022 and 2023 exceeded the production of these products in both countries. Hence the suspicion that these products could not all have a Kazakh or Turkish origin. Confirmation came from numerous e-mails and price offers that proved the passage of Russian timber through the two suspected countries.

The extension of the duties (set in 2021 up to 15.8 per cent) is also retroactive, so the companies involved will have to pay the tariff not only with immediate effect, but also for the period from October 2023 until the new anti-dumping regulation enters into force, with a total value, paid by the importers, estimated at around EUR 10 million.

The EU's next steps

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"The start of the investigation by the Commission last August and now the decision to extend anti-dumping duties also to Kazakhstan and Turkey shows that the European Union has taken a very precise direction, which we entrepreneurs hope will also be confirmed by the new Commission,' Nicoletta Azzi comments. An excellent job has been done, at the urging of the production world, but we are only at the beginning. More steps remain to be taken, because duty avoidance also implies the violation of other European regulations'.

The reference is in particular to the sanctions imposed by Brussels on Russia after the invasion of Ukraine, which also included a ban on the import (as of July 2022) of birch plywood. At the moment, the European investigation has reportedly failed to prove this circumvention unequivocally, but further investigations are underway. Furthermore, and here we are in the realm of fraud, there is the issue of Eutr, the European Timber Regulation (now merged into Eudr, on deforestation), which provides for the verification and certification by importers of the origin of timber and semi-finished wood products, in order to minimise the entry of illegal timber into Europe.

"There are other Commission offices, such as Olaf, the anti-fraud office, which are at work,' explains Azzi. 'On Epf's initiative, for example, the Commission has also started investigating other countries where there are well-founded suspicions of dumping or circumvention of EU rules, including China, in particular with regard to parquet imports. We only ask that the battle with our competitors be on equal terms: the rules that apply to us, and which often entail bureaucratic difficulties and significant administrative costs for companies, should also apply to them'. This is the case with the Eudr: 'It is a complex rule, but we hope that it will at least be an opportunity to prevent fraud of this kind'.

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